What issues/notice requirements for plan change that now excludes a group of employees (co-op ees) from a DB plan? What about this same excluded group that terminates and then is rehired shortly afterwards?

I was scanning this message board recently and ran across a discussion about registering Section 401(k) plans which offered employer stock as an investment alternative as a security under the 1933 Act. While I am aware of the registration of such plans, I was wondering if anyone can elaborate on how the SEC's position taken in SEC Release No. 33-6281 concerning Section 401(k) plans affect such registration reqruiements. I was under the impression that the SEC had taken the position that 401(k) plans were not contributory on the part of employees and thus, if such a plan permitted employer stock as an investment alternative, it would not be subjec to the 1933 Act.

Company A sold some assets, but the sale did not constitute a sale of "substantially all of the assets in a trade or business" so as to allow for a 401(k) distribution to the employees affected by the sale. As a result, the employees, who now work for the purchaser, still have accounts in Company A's 401(k) plan. Some of the employees had loans under Company A's plan and are paying the loans with checks.

Can these former employees of Company A take new loans from their accounts in Company A's plan? The plan does not appear to specifically prohibit such a practice. Would there be any reason Company A would not want to permit this if it is otherwise allowable?

[This message has been edited by Scott (edited 02-11-2000).]

A plan is thinking about having an investment option in which only "qualified investors" pursuant to SEC law may invest. A QE must meet certain net worth requirements which are fairly subst'l.

Investment options are a benefit right or feature (BRF) as determined by the discrimination rules. If this investment option was offered would it be discriminatory, even though it is actual SEC law that is creating the restriction? The regulations, -4, seem to indicate it probably is discriminatory as to a BRF.

A Roth IRA contribution today(2/11/2000) results in a 5 year waiting period start date of 1/1/1999. If I then make IRA conversions to this Roth IRA will all conversions have the same start date of 1/1/1999 and therefore the same 5 year waiting period end date of 12/31/2003?

Furthermore if I continue to convert from an IRA to this Roth IRA after 12/31/2003 will these conversions have a 5 year year end date of 12/31/2003 and therefore be immediately withdrawable without penalty?

Does anyone have an alternate link to Notice 2000-11? I'm having some difficulties with the .pdf file on www.irs.ustreas.gov/prod/tax_regs/txts/irs-regs.htm Notice 2000-11 contains a “Safe Harbor Explanation” that plan administrators may provide the recipients of eligible rollover distributions from qualified plans in order to satisfy section 402(f). Thanks.

I have a client that became gravely ill recently. His 401(k) plan is a spin-off of a larger plan that broke up 2 years ago as a result of the divestiture of a large dental practice into 4 smaller ones. My client never completed a new Beneficiary Designation under the new plan and now is hospitalized with what may be a terminal illness. He is unconscious and in no position to complete a form now.

His former office manager found a copy of his beneficiary designation under the original, pre-spinoff, 401(k) plan. Can anyone confirm that this designation would be valid under the current plan since it is essentially a continuation of the original plan?

I'm still confused as to whether an additional payment can be made after year end, and applied retroactively.

I have a calendar year 1999 ESOP, where all the scheduled payments have been made during 1999. I can calculate the release based upn the P & I method which is in place. Scheduled payments have been made in January and February 2000 which will be applied toward the 2000 release formula. The client wants to know if they can make the scheduled payment on 3/1/2000, and an additional payment on 3/1/2000. (The loan allows extra principal payments.) They want the extra 3/1/2000 payment to be applied against the 1999 release, and deducted on the 1999 tax return.

Is it possible?

I know the extra payment falls within the 404 time period, but I don't see how I'd release the extra shares.

It seems that the extra payment for 1999 shoould have been made prior to 2/1/00.

thanks

What are average fees TPA's charge for claims processing?

Must match forfeiture allocated to salary of deferrees be included in the ACP test? The document lists a discretionary match, no set formula such as 35% up to 6%; it just says discretionary up to 6%. So the formula is OK, BUT, must you use the match forf? What are the pros/cons? If the document did say 35% up to 6%, being a specific % limit, then you couldn't, correct?

Emloyed by two employers and two different plans in one year. Can compensation for both employers and plans be counted to exceed the $30,000 limit and 160,000 limit for 1999 due to two employers, two plans?

Example: Dr. is employed by Emergency Services for 8 months. Compensation was $200,000. He is now a partner in a partnership for the balance of 4 months of 1999. Compensation was $60,000. Question?

He has contributed $30,000 in the original employer plan. Can he contribute addition funds on the $60,000 in compensation from the partnership?

Any thoughts on the duty of care which an employer must exercise when 457 plan uses a custodial account and/or annuity contracts?

The employer is not a trustee and therefore does not have fiduciary responsibilities but does that get them completely off the hook for anything that might happen?

The plan is entirely voluntary and all investment decisions are made by the employee. What if the employer picks a bad company to administer the program and there are excessive fees charged or other problems. The employer is not making the investment decisions but it picked the companies with which employee must use if he elects to participate.

We are being asked to take over as trustee on a nonqualified deferred comp. plan that allows loans and currently has loans outstanding. I have never seen a NQDC plan with a loan provision, but cannot find where they are specifically excluded. Does anyone know of codes where loans are allowed or dis-allowed?

Any good articles seen relating to fully insured (412(i)) defined benefit plans that I can get my hands on.

Do you have to use a VEBA (or some other trust) with a Section 401(h) account? Let’s say retiree health benefits are self funded and the retirees pay a portion of the cost of their coverage (obviously on an after tax basis). The 401(h) disbursements and the retirees’ contributions can be pooled in a VEBA pending payment of claims. But, is there a way to do this without a VEBA (or other trust)?

I have a client who is asking whether the "substantially equal" repayment requirement, means exactly equal and to what extent the Regs. allow these payments to not be the same. Is anyone aware of how this has been interpreted in the past?

A client of mine wants to know whether the "substantially level" repayment requirement in IRC section 72(p) means exactly equal. My thinking is that it means payments must be very close to the same but I am wondering if anyone knows how "substantially level" has been interpreted by the IRS.

Can restructuring for eligibility be done for ACP testing purposes or is it restricted to ADP testing?

Cites from formal or informal guidance would be appreciated.

I posted this same question under long term care, but thought I might get more respose under miscellaneous benefits...

We're a large retailer with a fairly young demographic and are currently looking at adding a vol. package which would include long term care. My concern is whether or not our employees would really perceive this as a benefit, whether or not it's considered an affordable benefit by most, etc. Any feedback/opinion/experience would be appreciated.

I work for a large retailer with about 30,000 eligible employees and a fairly 'young' demographic. We're looking at a single source billing voluntary package and have thought about including Long Term Care (in addition to Pre-paid legal and financial planning) to start off. My concern is whether or not the Long Term Care insurance would be beneficial or 'worth it' to our employees. Any opinions/feedback/experience would be appreciated.