Do you include employee rollovers on your SAR? If yes, under which category do you put it?

Taxpayer has tangible personal property (a promissory note to an unrelated third party) in his IRA. Assume that the fair market value of the note is $100K. If he withdraws the note from the IRA, can he roll over (within 60 days) $100K in cash to a new IRA (he would then hold the note personally). Or, is he required to roll over the note (that is, the actual property that was distributed to him out of his IRA)? Code section 408(d)(3) seems to require that he roll over the actual property received. Any thoughts??? Thanks.

Does anyone know of a source to start searching for a daily recordkeeper for DC plans?

I know that pre-tax contributions to the Thrift Savings Plan (TSP) are subject to the elective deferral limit ($10,500 for 2000). Does the 401(a)(17) compensation limit ($170,000 for 2000) apply to the TSP? The FERS employees are entitled to an automatic 1% employer contribution and I am wondering whether the comp limit applies. Further, can someone educate me as to whether these employees are entitled to social security. I thought social security only applied to the private sector but after reading something on TSP it sounds like FERS employees are entitled to social security and CSRS employees are not. (As you may have guessed from my questions, I normally do not deal with plans outside of qualified plans in the private sector arena.)

We are looking at a takeover situation that has used the standard 6 year vesting schedule since plan inception. In 1996, the plan was restated onto a volumne submitter document (for cross testing purposes)and received an approval letter. The drafter incorrectly checked 100% immediate vesting. The plan has continued to operate as if the vesting schedule is 6 years. I spoke with the drafter, and he admitted it was a drafting error.

Is there a way to correct without fully vesting everyone since 1996? Does the intent of the plan sponsor and apparently the participants count? Thanks.

I would appreciate opinions on reliance on failsafe provisions for cross tested plans which do not pass 401(a)(4) without failsafe allocations.

I am aware than the IRS is often requiring failsafe provisions to be removed upon application for FDLs, but many are approved.

Lets assume that a plan is established in 1997, has failsafe provisions, and passes by a reasonable margin. Then several NHCEs terminate, and it fails for two years, and does not appear likely to pass in the future. Is it an option to continue using failsafe allocations, which typically are much cheaper for the client than redesign?

Would there be grounds for disqualification if it is no longer designed so that it projects to pass?

Opinions?

[This message has been edited by AndyH (edited 02-09-2000).]

[This message has been edited by AndyH (edited 02-09-2000).]

If a qualified plan offers a LSD, isn't there some disclosure requirement to tell departing employees they have that option? (Ignore that in the real world there's probably no 'er motivation to "hide" the LSD option. This is theoretical.) Thanks.

What is the correction for granting a higher match than what is specified in the plan document (document specifies matching 50% of deferrals up to 5% of compensation, plan sponsor mistakenly granted 50% of deferrals up to 8% of compensation)? If the excess matching contributions are treated as forfeitures, would associated interest also be treated as forfeitures? Would associated interest be required to be calculated in any specific way? Would the correction fit under APRSC? Does the IRS guidance under Rev. Proc. 2000-16 cover this in any way?

I have a plan with an 11/30/99 plan year end.

It is top heavy for this year but will not be for next year. Top heavy minimums only go to non-key participants. Can I use the entire match to the non-keys and use prior year testing to pass this years ACP test and still use current year testing for the plan year ending 11/30/00?

I am hoping to get some advice from anyone who has survived a DOL audit. Firm is a TPA, servicing self-funded and insured product employee health and welfare benefits plans. We have been told that DOL will arrive in about 5 weeks, subpoena in hand. Will we receive more information before the audit as to what specifically they want us to produce? If not, is there a reasonable time we may ask for in order to produce the documents? We have no idea yet whether they are auditing firm as a supplier of services to plans or if they are auditing a specific plan. Personal experience or reference to guidelines would be extremely appreciated.

Can a plan provide a definition of a "1-year break in service" as a plan year during which the participant has not completed more than 250 hours of service instead of 500?

I am dealing with a 401(k) plan that has failed to deposit participant salary deferrals into the trust on a timely basis (i.e, 15 day rule). The plan will remit the deferral amounts to the trust immediately along with lost earnings. Must a 5330 also be filed as a result of the prohibited transaction?

Assume that a 403(B) plan includes matching contributions subject to 401(m) testing. May the plan sponsor freely switch from the current year NHCE average contribution percentage to the prior year method because we're still in the Small Business Job Protection Act remedial amendment period? (I know that other exceptions potentially could work, but they don't in my client's situation.)

CON

Notice 98-1, Section VII allows this switch during the remedial amendment period. However, for 403(B) plans, that remedial amendment period ended 1/1/1998 and hence is over. Therefore one can't switch.

PRO

Code Section 403(B)(12)(A)(i) says that 401(m) applies as if the 403(B) plan were described in Code Section 401(a). In that case, when one reads Notice 98-1, one uses the remedial amendment period for 401(a) plans, which doesn't expire until 12/31/2000 for calendar year plans. Hence, one could switch.

The 403(B) examiniation guidelines issued last year don't help resolve whether the Pro or Con argument is the correct one.

Has anyone else resolved this issue? Has the IRS taken a position on it?

A self-funded medical plan has payroll deductions for dependent coverage and the employer pays 100% for employees. Premiums are paid for claims as they are incurred from the employer's general assets. There is a stop-loss policy for claims over a set dollar amount. The plan also has fully insured dental, std and ltd. Two questions-is an independent audit required and must separate 5500's be filed.

A self-funded medical plan has payroll deductions for dependent coverage and the employer pays 100% for employees. Premiums are paid for claims as they are incurred from the employer's general assets. There is a stop-loss policy for claims over a set dollar amount. The plan also has fully insured dental, std and ltd. Two questions- is an independent audit required and must separate 5500's be filed.

What web site has a downloadable 1999 Form 5500 that can be typed on. All of the sites I have found have the revised form that says for information purposes only, do not use for filing. I just need to prepare a simple 5500 for educational tuition reimbursement.

Should beginning of year participant account match up to end of prior year participant count? If so, we are not including participants who became eligible at beginning of current year. Is that correct? Does this also mean that we are to pur down 0 participants at the beginning of year for a new plan? The reason I ask is I have heard conflicting answers form various administrators. Thanks to anyone willing to help.

10 Employees transfer employment from Company A to Company B.

Company A and B have 401 (k) Plans with employer match. The same

desk rule applies, and trustees agree to transfer the account

balances to Company B's plan.

The vesting schedules of the employer match is different in each

plan. Company A's plan provides full and immediate vesting.

Company B has a 5 year cliff schedule.

Since the new contributions now made for these 10 employees are

subject to a longer vesting schedule (assume each employee has less

than 5 years of service and past service is credited), has a deemed

amendment of the vesting schedule occurred? In other words, are

the 10 participants entitled to make an election pursuant to

1.411(a)-8 and vest under the old or new schedule, if they have at

least 3 years or service? I understand that the transferred

account balances are not affected, and remain 100% vested.

Thanks to all that answer.

A client has 2 403B accts..they calculate RMD for both and take it from one acct..then transfer both to an IRA..however they fill out paperwork wrong and get an RMD check from the other 403b acct...can they simply roll this money into the ira within 60 days or since it was coded as an rmd do they have to take the distribution?

In a string starting in early Dec 1999 titled,"Loan default due to death of participant - who is liable for the taxes?", the view was that the beneficiary would be liable for the loan as an offset amount. I have a non-spousal beneficiary who will leave the money in the plan as long as possible. However, our recordkeeping process is to deem a loan if payments are not made for 90 days. How would I handle the loan after 90 days, would it be a deemed loan or an offset payment? If the loan is taxable income with the tax year for the participant, what category would be used on the 1099r. All help is greatly appreciated.