We have an employee who elected to pass on signing up for medical and dental coverage under our 125 plan. He is currently covered under his military retirement medical plan. He has been transfered to Ireland where there are no military medical facilities. He wants to change is election to cover himself, spouse and child for medical and dental under our plan. Is this acceptable?

Two County Offices of Education and several public school districts in California are forming a Joint Powers Agency (JPA) to provide maintenance, operations, food service, transportation, printing, ans warehouse/delivery services. The JPA is being formed by public education organizations to provides services to public education organizations. Is the JPA 403(B) eligible organization? Is it necessary to seek a Letter of Determination from the IRS?

An employer who sponsors a SEP with a three year service requirement, also wishes to add a 401(k) plan to give all employees a salary deferral mechanism that will not trigger a mandatory employer contribution (assuming plan is not top heavy). Is this possible?

I recently resigned from a University where I worked as a faculty member. Prior to termination, the University adopted a defined contribution plan. I switched from the state sponsored defined benefit plan. At the time I switched, a plan comparison was distributed by the University. This brochure stated a lump-sum distribution was permissible under both plans. I have since requested a distribution, and am being denied because the "actual" plan does not allow a lump-sum distribution. Is the University bound by the summary info provided?

I'm very new to investing, and know basically nothing. I'm 24, and I'd like to get started early. I have about $1,400 in a 401K from my previous employer. I have a friend that would like me to give him this money to put into a Roth IRA. I'm a little concerned, because there is a large annual cost to hire his services. ($150-$200). This seems excessive for my small initial investment. Can I get started in a Roth IRA for less money than this? Should I just leave my money where it is? I don't think they are charging me much to invest my money in Mutual Funds.

What do members of this group think about a

top hat plan funded by a rabbi trust that

permits participants to make daily investment

selections among a family of funds selected

by the trustee? While the trust document

contains language that these are only

"deemed" investment elections, in reality

the trustee will never evaluate these

decisions and, in fact, will never even know

what decisions have been made because the

participants contact the custodian of the

assets directly, i.e., there is no procedure

by which the trustee reviews the decisions.

Doesn't such a plan constitute a "funded"

plan for purposes of ERISA? If not, why not?

Thank you very much for your comments.

It seems 414(q) sends you back to the 415 compensation definition and the 415 regs state that you only aggregate compensation if an employee works for members of a controlled group or affilated service group. Also for purposes of 415 limits, the "default" option for multiemployer plans is to disaggregate employers if an employee works for more than one employer. [1.415-1(e)(2)]

On the other hand, most multiemployer plans "aggregate" all employers and bargaining units for purposes of running the ADP test. If you aggregate employers for purposes of defining the Plan to be tested must you aggregate compensation from employers for purposes of identifying HCEs?

Say a plan terminates and purchases annuities from an insurance company and later on a plan participant has begun to receive his annuity. A couple of years later on it is discovered that the participant should have received a larger pension, is there any recourse when the plan no longer exists? Anyone have any knowledge on this situation or a similar one?

Is it permissable to exclude HCEs from the Employer nonelective or match in a safe harbor plan, but allow them to defer?

Is is permissable to exclude one of several HCEs by name or classification?

A problem can arise with young HCEs in a cross tested plan, which raises these questions. Opinions?

Our valuation systems is calcuating interest for full funding limit for OBRA and RPA at the OBRA|RPA interest rate to bring the values forward to the end of the year but is increasing assets at the valuation rate. Is this correct? Is there a cite? I understand it may be part of an IRS announcement but I can not locate it.

I am looking for a good flexible nonqualified recordkeeping system. Is anyone currently using a program that they are happy with? I would like to know the program name and the supplier's contact information. Thanks.

Assume you use a January 1, 2000 valuation date for a calendar year plan year.

If there is a plan amendment adopted July 1, 2000 retroactive to January 1, 2000, do you reflect it in full, in part, or not at all for the 2000 valuation?

If there is a plan amendment adopted March 1, 2001 retroactive to January 1, 2000, do you reflect it in full, in part, or not at all for the 2000 valuation?

Same pair of questions except assume you are using a December 31, 2000 valuation date for the 2000 valuation.

(I vaguely remember there was an old Revenue Ruling that dealt with this -- something like Rev. Rul. 77-2 or so.)

Adoption agreement of prototype document was checked off defining compensation as to W2 plus 401k deferrals plus Cafeteria plan deferrals. Plan year end is 9/30.

1. In determining the denominator in the ADP (and ACP) test, must we use W2 plus 401k deferrals plus Cafeteria plan deferrals? If we want to use simply W2, can we? Or, what, if anything can be done to allow W2 to be used in the denominator?

2. An employee had a W2 compensation slightly under $80,000 for the PYE 9/30/99. But, his W2 plus 401k deferrals plus Cafeteria plan deferrals were over $80,000. Is he an HCE for PYE 9/30/00? Can anything be done at this time to avoid him from being an HCE for PYE 9/30/00?

Thanks

The instructions to the IRS form 1098 says that a 1098 form must be filed to report home mortgage interest received, but only if the person or entity receiving the mortgage interest is received in the course of your trade or business.

Is the trustee of a tax qualified 401(k) trust requried to file a 1098 form if at least $600 of mortgage interest is received during the year? Is there any cite on this?

Thanks.

I want to establish a Roth IRA soon. I am wanting to know if i can covert a portion of my traditional IRA into a pre-existing Roth later this year.

My wife was laid off in March 1999, she had been in their 401K plan. Now she is stay at home mom, obviously not in a 401K plan.

We file jointly and would fall below the AGI phaseout. Would we still be able to claim the $2000 deposit into her IRA for 199 as fully deductible since she is no longer an "active participant" in a 401K plan, even though she was at one point in the year?

Where a participant owns part of the primary residence the participant is living in, will a loan to the participant to purchase a greater share in the residence count as a loan to acquire a primary residence? 2 people bought a house together and both count it as their primary residence. One now wants to purchase the interest of the other. Can this plan participant get a loan from the plan and amortize it for more than 5 years due to being a loan for a primary residence?

At first, I thought no. Now, I'm thinking this is sort of analogous to paying off a loan from a third party that was used to purchase a primary residence. So now I'm thinking this would be o.k.

I'd appreciate other opinions. Thanks.

I am looking for a sample plan doc for a qualified transportion fringe benefit set up to work like an FSA account. Can anyone help me out? My e-mail address is parejam@hro.com and my phone number is (303) 866-0279. Thanks!!

I've read previous e-mails in which you state that "any amendment that is inconsistant with the notice (previously given for the year) does not become effective until the following year". Therefore, the plan cannot be amended or terminated during the year. Where does it say this?-- in the guidance or the model form? I need to show it to a client and can't track it down.

Thanks.

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DLevine

I have an employee that has been off work under a workers' compensation ijury. Our workers' comp. carrier recently decided to deny any future claims and discontinue salary payments based upon a physician's recommendation that the employee is able to return to work. The employee still feels that she should stay off work based upon the opinion of her personal physician. Since she is no longer eligible for benefits under workers' compensation can she receive benefits under short-term disability? Before she was not able to access her disability because they will not pay out because of a workers' comp. claim. Now that she was been deemed by the workers' comp. doctor as "able to work" can she receive benefits?