Does anyone have a good checklist of things to ask the client for when taking over an existing plan?

May distributions from DB plans be made only on account of separation from service or plan termination? Where in the Code is this requirement? (I only see this for 401(k) plans). Thanks.

I am designing a small 401(k)profit sharing plan, calendar year 1999, of which for '99 there will be no 401(k) contributions. The employer wants to include all employees for the first yeat then have 21, 12 months for future years.

Problem is, may employees were hired after 1/1/99, some as late as 12/1/99.

I've thought as far as 1/1/99 effective date, double entry dates of 6/30 and 12/31 and the amending as of 1/1/200 for 1/1 and 7/1, but I don't think that will solve the problem of bringing in the people hired in December '99.

We're not talking of a huge contribution, the annualized % is around 7%, but I don't even want to think of a short plan year of 12/1/99 to 12/31/99.

The also want to go 401(k) for 2000.

Any ideas??

My employer (22 employees) has contracted with an employee leasing firm (over 4000 employees), and will begin using the service Jan.1. We have been participating in a SIMPLE IRA with our employer since Aug. 1, 1998. This plan will not be available to us from the employee leasing firm. They will be offering a 401K, but I have not seen any details of this so far. They also mention something about a Section 125 plan, which I've never heard of. Currently I have a Roth IRA. What are my options (and tax consequences thereof) for the SIMPLE IRA should I wish to move the funds? Are there any rollover options available, either into the 401K, Roth IRA, or a new regular IRA?

My concern is more with the tax consequences rather than the fees imposed by the existing plan for withdrawing from the SIMPLE plan.

Carl C.

A company found out that it overpaid someone by the tune of $40,000 w/r to his lump sum. Can a company require the individual to pay back this amount? WHat can the participant do? Any thoughts.

How long is a plan sponsor required to keep data records of an employee afer they terminate and receive their pension? Either in form of life annuity or lump sum. It appears from ERISA 209(a)(1) that records must be retained indefinitely. i.e. as long as there is a chance that the data to calculate the benefit is ever potentially needed. Are there any thoughts w/r to this or to other factors affecting this point?

If a sub S corporation leases all of its employees, including its owners, can the owners participate in the leasing company's 401(k) plan and borrow against their contributions? The leasing company uses a Multiple Employer Plan, and the sub S corporation has signed an adoption agreement specifying particulars of the plan that is applicable to them. (The adoption agreement still meets the qualified status). The leasing agreement does all the payroll for the sub S corporation and many others, so the leasing company could claim the sub S owners as their employees. Can these employees loan from the plan?

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I opened a Roth IRA in February, 1999 with $4,000 (for 1998 & 1999). Due to bad investments my account balance is now at $1,000. I would think that I could close this account and show a short term loss of $3,000. If this is correct, how do I go about claiming it on my tax return?

Can a Self-funded welfare benefit plan exclude breast reduction as an eligible benefit even if medically necesary? Would such an exclusion be considered discriminatory? Such an exlcusion would not be applied to mastectomies, only breast reductions.

Employer maintains a medical expense reimbursement plan. Under the plan, Employer contributes money each year to each employee's account, and the employee can get reimbursements for medical expenses incurred by the employee and the employee's spouse and dependents. Question: Are spouses and dependents Qualified Beneficiaries under the plan, and thus entitled to elect to have an account set up on their behalf if there is a qualfication event?

Has anyone heard from the IRS National Office about a possible extension of the restatement deadline beyond the 2000 plan year?

My employer terminated our 401(k) plan as part of a being acquired by another firm. Plan assets (mutual fund investments) were liquidated at the end of Sep. 1999 and rollover checks mailed at the end of Nov. 1999. Questions:

1. Do regulations specify how plan proceeds must be held during period between asset liquidation and disbursement? Can the employer, for exapmle, place the money in an interest bearing account?

2. If income was earned on plan monies during this timeframe, which party (employer vs. participants) should benefit?

3. Are there any regulatory guidelines dealing with timeliness of distribution of funds after termination, IRS approval, or liquidation of assets?

Thanks in advance.

We're considering ordering 2 of the resources authored by Q&A columnists:

1. The 401(k) Plans Manual by Stuart C. Harris and Kut E. Linsemayer.

2. Retirement Plan Distribution Book by Martin Silfen, Esq.

Has anyone used either of these? If so, would you be willing to share any comments about them?

Thanks.

In an asset deal seller terminates its plans. All employees are hired by a successor employer. However, successor employer has a 3 month waiting period for new hires. Are these employees M&A beneficiaries? It seems under the proposed regs that they may be left without coverage and with no COBRA rights for these 3 months.

Our client sponsors a 401(k) Plan. As they are a construction firm handling several Davis-Bacon jobs they recently joined a multi-employer Prevailing Wage plan where the contributions seem to be classified as QNECs. If this is indeed the case, can we use these QNEC contributions to satisfy ADP test for 401(k) Plan (aggregate plans for testing purposes)?

Employer wants to put plan in place whereby e/ee's can choose between year-end bonus or medical/dental expense reimbursement. First, employer will need to adopt 1)a cafeteria plan and 2) a medical/dental expense reimbursement plan(FSA?), correct?

Second, is it as simple as providing in the cafeteria plan document that the employer will make discretionary contributions only (i.e., bonuses)and that e/ee's can elect to either receive said bonuses or direct that said amount go towards an FSA in their name?

Third, despite the fact that the bonus will be entirely discretionary are there any constructive receipt issues since the bonus will be based on services performed previously?

I mainly deal with profit sharing and pension plans so any help would be greatly appreciated.

Merry Christmas!

I recently ran across Reg. 1.105-11(b)(1) which indicates that the reimbursement plan would need to be a separate written document from the cafeteria plan document. My main question deals with the drafting of the specific provision re: bonus or med/dental exp reimbursement.

Thanks again...

[This message has been edited by chris (edited 12-17-1999).]

I have a client with a 401k plan with self-directed accounts. One of the participants wants covered call writing as an investment option. The only investments specifically excluded under plan's investment policy are collectibles under section 408(m).

Does anyone have experience with this type of investment? Is it okay to allow in qualified plan? Thanks.

Can anyone suggest a good tickler program? Could be network or single-user. We had one but it was dos-based and wasn't y2k compliant. Thanks!

My wife and I have a Roth IRA account and together we were under the income threshold to establish a Roth IRA. I was laid off a month ago and started trading stocks for myself and did better than I ever expected - and I have realized some gains that would put us beyond the Roth threshold. Does stock trading income in the last month of the working year count towards my regular income or do I not have anything to worry about if it is simply short term gains? My regular job before was an analyst and not a trader. Thanks for any advice!

Seeking advice/experience on handling participant loans in accounts that are subject to QDROs - e.g. plan provisions treating the loan as in default to the extent necessary to make a distribution to an alternate payee under a QDRO.

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