For a not-for-profit entity, what are the issues (advantages/disavantages)to be considered when choosing between a 401(k) and a 403(B) Plan?

For a not-for-profit entity, what are the issues (advantages/disavantages)to be considered when choosing between a 401(k) and a 403(B) Plan

A 401(k) plan participant and his wife died due to a car accident. The participant died immediately. The wife died about 2 weeks later from injuries sustained in the accident. Is the money paid to the secondary beneficiary named in the participant's beneficiary designation? Is the money paid to the wife's estate and then controlled by the wife's will? Is this another case where it would be best for the plan to file an interpleader action?

We are looking for Retention Tools, preferably no cost or little cost to company, that will help us keep our valuable employees from jumping ship...keep them happy and motivated.

Nonqualified deferred compensation plan permits distributions in form of either lump sum or installment payments over period of a maximum of 10 years. What issues arise if plan is amended to permit distributions in installments of amounts selected by participant (i.e. 10,000 the first distribution year, $5,000 the next two years, and none the fourth year, etc.)?

What are the rules for the earliest one can take distributions from an IRA? Cites?

The administrator of a 401(k) plan failed to notify some eligible employees that they were eligible to participate in the plan. We're in the same plan year, but the 3 month de minimis period has expired. We'll notify the excluded employees of their eligibility, but is there a way to fix the period of exclusion before we calculate ADP/ACP at the end of the year? We'd rather clear this up now since these are generally short term employees and will likely be gone by the end of the year. Then we'll have to find them just to give them a very small plan distribution. Any ideas?

Has the fine/penalty for failure to provide a summary plan decription been increased from $100/day?.

We have a 401(k) plan that was established back in '95. We have always tested on a current year basis. This year is the first year they have failed the adp testing (no match is made). I have heard it is possible to use prior year numbers for testing the '99 and then it is still ok to flip back to current year for the 2000 year if we so desire. Is that true?

Thank you.

My client acquired 100% of stock of a competitor. The transaction closed 1/4/1999. All eligible employees of acquired firm were let into my client's plan.

For purposes of defining HCE for 1999 plan year (which is calendar), is former owner of acquired business an HCE due to ownership interest or compensation (well in excess of $80,000 in 1998) from acquired firm?

Does anyone know what discrimination testing is required for TSA plans? Are both ADP and ACP tests required?

I have a client who is looking for a institutional trustee for its ESOP. The company is closely-held with approximately 140 participants in the ESOP. Currently, the president of the company is acting as trustee. The ESOP is not leveraged (though it was leveraged in the past - the loan has been repaid). There are approximately 100 participants.

If anyone has any recommendations, please let me know. We have some preference for a southeastern-based trustee, though this is not a requirement.

Can a very small company still have a top hat group? An employer with 4 full time employees (increasing seasonally to approx. 8) wants to put in a NQ deferred comp. plan for the key employees - the salesperson and the fulfillment person - who essentially run the company and earn more than the rest. However as a percentage of total employees this group is no where near the 5% safe harbor. Seeking any comments from persons with experience in similar matters.

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I'm looking for some guidance on the calculations involved to determine the lump sum value due a participant in a frozen contributory DB plan that is finally terminating & paying out next month ( using the Feb.2000 30-year Treasury Rate & 50/50 83GAM) ; the employee is withdrawing (i.e. electing lump sum) their entire account including the EE portion; here are the facts: employee terminates employment in '92 with a fully vested accrued benefit (AB) -life annuity normal form-and a mandatory contribution account balance of (EEC); the lump sum basis was PBGC until last year when GATT was adopted;in order to determine the accrued benefit due to EE contributions, do I first (1) accumulate EEC from '92 to today using 120% AFR and from today to NRD at 30-year Treasury or (2)accumulate EEC from '92 to last year at PBGC and then use 30-year Treasury to NRD ;and then convert the accumulated amount at NRD to an annuity using GATT assumptions ?? ; the employer portion of the accrued benefit at NRD would then seem to be AB minus the annuitized EEC account; I would then convert this employer portion to a lump sum using GATT again; my questions : which of the accumulations noted above are correct,i.e. (1) or (2) ? would a current SPD or the plan document give guidance? what would be the lump sum amount based on the EE portion of the benefit that is due to the employee at plan termination ? has the IRS provided more recent guidance since Rev. Ruling 89-60 ?

Can an ESOP delay distributions to terminated employees (e.g., until after 5 one-year breaks-in-service), but convert the terminated employees' accounts to cash upon termination of the employees' employment, i.e., buy back the stock for cash (which would then be invested at the direction of the former employee)?

The ESOP is nearing the end of its loan repayment and this method would enable it to acquire additional shares to allocate to active employee/participants.

Thanks.

[This message has been edited by EMC (edited 03-05-2000).]

[This message has been edited by EMC (edited 03-05-2000).]

My Excess contribution was made in Nov. 99. Although, the Roth IRA Account contained other funds purchased earlier in '99, the excess contribution remained in the cash fund(money market). To calculate the gains due to the excess, would I consider gains in the cash fund only and exclude gains for that year from my other mutual funds?

Thanks for any help,

CN

A third party provider (financial services firm) proposes to an employer that it provide financial planning services to soon to be retiring employees on issues ranging from 401(k) rollover to IRA and other distribution options and rules relating thereto, health care insurance options, and other issues encountered in retirement. The third party provider would not provide recommendations regarding investments inside the 401(k). What liability would the employer (401(k) sponsor) possess, if any, under ERISA, if the employee-specific advice proved erroneous?

In 1998 I exercised the option to rollover some TIAA/CREF annuity accumulations into a traditional (or "classic") IRA, then converted those assets to a Roth IRA. In 1999 I took initial minimum distributions from remaining TIAA/CREF annuity contracts and had those funds "credited" to the Roth (as permitted by TIAA/CREF forms). I am retired and do not have earned income. Is this action treated as a conversion (rather than a contribution) and shown on 8606?

Early in 1999 I opened a Roth acount with a broker in the amount $1100. Funds were invested in mututal funds. Later that same year I forwarded funds in the amount of $900 to the same broker, to meet my allowable $2000 limit. After the funds were received and deposited in a money market, but before any equity purchase, I realized (too late) that the broker had a $1000 minimum for any equity investment. Now I was stuck with $900 in a low earnings money market. I called the broker asking what to do and they advised me to write a letter explaining and asking for the funds back. I did and they returned the funds. I subsequently opened a Roth count in the amount of $900 at a different broker with lower investment minimums. Just recently I received a 1099 on the $900 at the first broker, showing a distribution. My concern is not a tax issue, as the earnings were only $1.13, but how will the IRS view all these deposits?

Are my total Roth contributions for 1998 $2000 or $2900 (higher than allowed)? How does the IRS view contributions and withdrawls from the same aco**** in the same tax year?

Thanks for your advice.

dan

I have a couple questions about Roth Iras that I hope someone can help me on.

I am 21 and want to start saving for retirement but I dont want to go to a financial planner or on-line broker. I'm going to try and see if I can research everything by myself. So where can I set up an Roth IRA on my own? Also, for 1999, I was a full-time student and didnt have any "taxed income" but I do have some money saved up over the years that I want to contribute before 4/15 for the 1999 IRA. Can I do that even though I had no taxed income. I had heard that you can only contribute the same or above ($2000) the amount of taxed income you had that year.

I'm planning to buy buy 1-2 Mutual Funds to put in my IRA and many people have told me that Vanguard is the best. Specifically Vanguard Total Stock Market Fund and Vanguard Growth and Income. But I had read that Vanguard mostly deals with index funds and I had wanted to stay away from those because I feel at my age I can be a little more aggressive and index funds arent managed very much. Are the above Funds index funds?

Well, thanks for listening!

Lisa

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"Does they leave it there during the game?"-Bill Lee on the Green Monster