The U.S. Chamber of Commerce is currently seeking volunteers to participate in its survey of employee benefit expenditures. The 2002 Employee Benefits Study provides valuable information on the total cost of employee compensation, including average costs by company size, industry, and geographic region. The survey is only five pages and is simple to complete with your 2001 year-end figures at hand.

Each participating company will receive as a “thank you” a FREE copy (a $75.00 value) of the published survey results, which can be used to evaluate your company’s benefit offerings. Companies may volunteer to participate in the survey by visiting www.benefitstudy.com to download the survey form or by calling toll-free 1-877-212-4535 to receive the survey automatically via fax.

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Last year I inadvertantly had a minimum distribution from a mutual fund transferred into my Roth IRA, even though I'm not eligible to make a Roth contribution. What is the procedure for undoing this mistake?

http://clubs.yahoo.com/clubs/stockoptionsandespp

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David Wight

Stock Plan Anaylst

http://clubs.yahoo.com/clubs/stockoptionsandespp

Every option is an opportunity

An S Corp. that has sold all of its assets and no longer has any employees except for the owner and his wife (ages 60 and 55). The corporation has been approached about setting up a DB Plan for its owners and funding it in the year of the sale to avoid c.g. tax on the sale. Thee owners are planning on looking into other ventures for the corporation, but have no definite plans at the moment. The owners plan to work only for a few more years in any event. I have a number of questions on whether this can work. Among these are:

1) The permanency and subterfuge provisions in 1.401(1)(B)(2) and (3),

2) Whether an S Corp. can offset an ordinary expese against capital gains?

3) Whether there is a method to fund the DB entirely in a single year and still take the deduction?

4) The effect of the phase in of the $130,000 Section 415 limit based on years of participation?

5) The general advisability of converting c.g. into ordinary income through use of a pension plan.

Any thoughts, articles or cites would be appreciated.

A friend transferred the balance of her 401k plan (begun while working for a former employer) to a Roth IRA in 1998. Was this rollover taxable? Would the same transaction be taxable today?

My employer claims it is changing insurance companies for workman's comp. They want us to sign a form and provide our driver's license number to allow them to review our driver records anytime they want. They claim the insurance company needs this to determine if each of us is insurable. If we don't sign the form, they say they can deny us workman's compensation coverage.

I have never encountered this before. It sounds like a violation of my privacy to require me to give them anytime access to my driving records.

Any comments.

Is anyone aware of any reason that would prevent a life insurance company from insisting that beneficiary designations be in writing? Client wants to do "everything" online, insurance company is balking, and client is insisting that the insurance company cannot require a writing. Seems unlikely to me.

Employer is converting from balance fwd valation to daily valuation. They have several CD's with prepayment penalties that will not come due until 12 months from now. Are the CD's considered Securities for purposes of the prohibitive transaction rules? If not, could the employer purchase them @ FMV from the Plan so that the Plan could be fully invested at date of transfer.

Is this form subject to public disclosure? I don't see anything to indicate it would not be, but what about when individual participant loans are reported on this schedule? It hardly seems logical that other participants should be privy to that information.

Under the instructions for 27a (assets held for investment purposes) it states that participant loans secured soley by participant account balances may be aggregated as "participant loans" rather than listed individually, but the instructions for 27b don't indicate this.

The auditor prepared the schedule listing each participant. Would it be acceptable to prepare a schedule for participant disclosure that aggregated these loans into one participant loan number?

Any thoughts are apprecited?

If an ADP test fails due to an employee being incorrectly classified as an HCE, can any corrective measures be taken to restore distributions already made to HCE's?

Husband is self-employed schedule C and has a SEP, there are no employees and he is the only participant. Wife is self-employed and a separate schedule C (different business) and currently does not have a plan. She does not have employees either. Can Wife adopt a SIMPLE? Or will it be thrown out because of having another qualified plan due to ownership attribution rules?

A client died December 1999. He was age 45, no spouse, and his father, age 74, is his beneficiary of his 401(k) account. What are the father's options? Can he leave money in 401(k) until 2004? Can he take 20% out of plan per year for five years? Also, since the father is 74, does he need to take out minimum distributions from the son's 401(k) account? Can the father now name a beneficiary of the account if he decides to leave the money in the 401(k) plan for five years?

I am in the process of researching a variety of employee assistance programs in order to offer this benefit to the employees at my company. By posting this message, I am hoping to generate some ideas, words of wisdom, and suggestions from others who have implemented an EAP. Please do advise me on where to start, what obstacles you encountered, what worked, what did not, and any other advice you can provide.

On my company's records, we have an account registered as a non-retirement account. However, it appears that the account should have been registered as a Traditional IRA. It was started with a transfer from another custodian 12 years ago. The client has been the recipient of 1099-DIVs each year and one 1099-B tax form. Does anyone know if we can correct this situation with the IRS? Since this client has been taxed on the dividends (which were reinvested into the account), could we consider them as cost basis in the IRA? Thanks for your help.

Do dependents have separate and independent continuation election rights under USERRA, like they do under COBRA?

Plan is subject to spousal consent rules, but failed to get spousal consent to several lump sum distributions. It looks like the accepted fix is to go to affected participants & spouses to ask for their consent, and give them the option of repaying the $ to the plan and receiving a QJSA. What if the spouse doesn't consent? The SVP correction method (in Appendix A of Rev Proc 2000-16) indicates that the employer must cough up the $ to pay the QJSA to the spouse, if the participant refuses to return the $ and the spouse refuses to consent. Seems to me there is little incentive for the spouse to consent, which could get expensive for the employer. Anyone have any ideas on how to handle spouses in this situation?

What percentage increase would be considered "significant" to allow for a change in a cafeteria plan? The Plan Document states only that a change can be made if there is a signficant change in premium but does not give any guidelines as to what amount qualifies as significant. Would a 10 - 12% increase be considered significant?

Is it LEGAL to advertise that a company has employee-paid medical, 100% paid dental and vision? Our company pays for the insurance premiums on these plans. We do not pay the co-pays or the deductibles. We are questioning the legality.

Employer failed to provide top-heavy minimum for past years. Plan is a 401(k) plan and employer makes matching contributions on a payroll period basis. In correcting the past failures, we have calculated the contribution amount, but are undecided as to the starting point for the earnings calculation. Does anyone have any thoughts? The regs appear to be silent and I cannot find any IRS guidance on this issue. Thanks.

Just took over a Plan that has been TH since 1996 and there has been no Employer contributions. Is CAP the only method of correction available?