My sisters and I inherited our father's IRA as his named beneficiaries. However, the IRA was the main asset in his taxable estate, accounting for over 80% of it's value. Therefore, we will have to tap the IRA for a sizeable amount to pay estate taxes. Is any of this deductible?

I am in the process of winding down a DB plan. There was one investment in the plan that apparently the client, and others bought with plan funds for a third pary to invest. The funds were apparently absconded with. My client and others have sued to regain the funds.

The accountant has shown a $300,000 investment loss on the books and this is reflected in the final numbers, on the 5500s as well as what was filed with PBGC for the termination.

The 60 days have elapsed and all mothe funds are liquid at this point ready to be distributed. The group is comprised of 8 participants, 7 of which are family. The company has no active payroll but still exists.

The employer wants to know what happens if we rollover all available assets now, and close out the plan ASPA WHAT happens if the clients win the lawsuit and recoup the funds?

How can you distribute funds from a terminated DB when the plan has technically been closed out, everyone has received a 1099R and final 5500s have been filed.

OR should we leave the plan open until that time??

OR, should the asset be renamed as a Corporate asset and earmarked for the participants IF and WHEN anything transpires?

Lorraine, what would you do??

Thanks,

Steve

Payroll pays bi-weekly, the payroll ending 12/31/98 paid on 1/7/2000. Is the compensation and contributions for 1999 or 2000?

What is a typical "black-out period" to move qualified plan assets from one trustee to another (ie, to new investment options with the new trustee) in a quarterly-valued plan? I realize that this would vary depending on the investments that have to be liquidated to

accomodate the transfer to a new trustee. I am looking for what "typically" happens. I am interested in what typically happens.

Is it reasonable in a quarterly-valued plan for the terminated trustee to transfer the funds to the new trustee within two weeks, but not to provide the new trustee with data necessary to allocate the money for five months?

Any thoughts would be greatly appreciated.

I do not believe there exists a time limit to bring a QDRO. I know a party that divorced 20 years ago and no one said anything about the 10 years worth of pensions rights that accrued. Is it possible to still bring a QDRO on the defined benefit plan? If so, how do you start?

Currently our Law Frim pay 100% of the employee health insurance coverage, but dependent coverage is very expensive( over $500.00 for family coverage). How can I find information on what other companies are offering their employees? (ie, carriers, percentage paid by employer, etc.) How do I know if we are competive with other law firms and companies?

Our company sold in a stock sale. We thought we would get to roll our 401K over into a self directed qualified plan. Now the new company says we are required to keep our money in their plan. What could be going on here that would prohibit us from getting access to our money?

Boy is this cool!

http://www.freeerisa.com/customer/login.asp

[This message has been edited by david rigby (edited 12-21-1999).]

We have 5 plans with a newly formed healthcare system, one of which is an electing church plan. The other 4 are non-electing church plans and we are considering merging the 5 plans. In a discussion with IRS National Office, we were advised that they were not aware of any request for a private letter ruling to merge an electing plan with a non-electing plan. The reason for no requests they believe is because of the irrevocability of the 410(d) election.However, we were encouraged to submit a request stating our case and see what happens. I believe it is worth a shot, since we can withdraw the application if it doesn't look as if we will get a favorable ruling.Any thoughts?

Also, it has been suggested that we merge the 4 non-electing plans and set up a trust to hold the assets of the merged plan as well as the assets of the electing plan. I'm not certain of the advantages here other than may be cost savings. Any comments would be welcomed.

The IRS suggested we terminate the electing plan and transfer the assets to the newly merged non-electing plans. I believe we would have to offer participants the opportunity to take distribution which is not what the client wishes. Any thoughts here? THANK YOU!!

401(k) plan has been in existence for 6+ years and the intention and participant communications is to have a 7 year vesting schedule. The plan as adopted reflects a 6 year vesting schedule. Curently tha plan is going through a conversion to another TPA. Do all prior forfeitures need to be re-calculated with interest? Does the IRS need to be involved? I am not of the amounts or number of affected participants.

just so no one else spends time spinning wheels on this one:

1099 link with hypeprep was not working (our ystem was 'hanging'. supposedly others have encountered similar problems. I was told there would be a fix shortly. In fact, the link was supposedly fixed, but another issue was also being addressed.

also having them investigate another issue with a plan that some distributions run at 4.0 and others distributions at 5.0. The distribution amounts were not showing under Utilities-->distributions. and the names of ees run at 4.0 don't show at all, only soc sec numbers.

hopefully I will know more shortly.

was also told you now need to run Processing-->Distribution Data, which will be a change from 4.0.

I have a case of an S-corp owner who just told us that he switched to an S from a C-Corp several years ago. This is in spite of the fact that we ask each year in our census! Anyway, he has a loan that he will pay off immediately. Can this be corrected through APRSC by repayment, deeming the distribution in the year the conversion was made and amending the owner's tax return for that year? Alternatively, must this corrected through VCR? Thanks.

Our company is trying to address the

regulations not allowing retroactive pre-tax

deductions for benefits. Because our employee's elections are often made past their normal eligibility date (1st of month after date of hire; date of event with family status changes) we often run into situations

where retroactive deductions would be necessary. I understand some companies have allowed after-tax deductions in these cases.

Because of the administrative burdens involved, we do not want to go this route. It is been proposed internally that we look at setting effective dates for benefits coverage for employees to tie to "when paperwork is received" if it is past the eligibility date, to avoid any retroactive deductions. However, in speaking with medical plan reps., they do not appear to be able to accomodate dates that are not tied to a particular "event date" such as "date of hire". How are others handling this retro-deduction issue?

For a one ee company, is it inappropriate to install a plan for 1 year and take deduction, knowing that in yr 2 the plan will terminate? ie. company will terminate.

Do split dollar plans for a top hat group need ERISA claims procedure language or any other specific language? It says at the beginning of Seciton 401 "This part. . ." doesn't apply to top hat plans, but I can't tell if part means section 503 also.

Do split dollar plans for a top hat group need ERISA claims procedure language or any other specific language? It says at the beginning of Seciton 401 "This part. . ." doesn't apply to top hat plans, but I can't tell if part means section 503 also.

Do NQDC plans need ERISA claims procedure language or any other specific language? It says at the beginning of Seciton 401 "This part. . ." doesn't apply to top hat plans, but I can't tell if part means section 503 also.

A plan terminated and there will be no further employer contributions to the plan. There is still money left in a forfeiture account. The plan document calls for using the forfeitures to reduce employer matching contribuitons. Our first thought is that the forfeitures should be used to offset plan expenses and we believe the plan document does allow this. But what happens to any forfeitures if there is still something left after offsetting all expenses? Can or must it be reallocated to participants?

I am employed by an educational institution. Earlier this year TIAA-CREF had calculated the max. monthly amount I could defer for 1999 under my 403(B) salary reduction agreement. I have currently been deferring that amount. I also have self-employment income from consulting work and have set up a SIMPLE IRA. Is there as maximum combined amount I can defer in a given year when I combine both the my 403(B) salary reduction and my SIMPLE? My calculations currently show that if I fund the max. $6000 allowable in my SIMPLE IRA I would by above 25% of my total net earned income for the year.

Can the safe harbor and facts-and-circumstances tests for determining whether a hardship exists and for determining whether a distribution is necessary to meet the hardship be mixed in the following ways (that is, can a plan document be written to allow for the following):

1) The hardship is for funeral expenses (a facts-and-circumstances hardship) but the safe harbor is used for determining whether or not the hardship is necessary (that is, the sponsor does not check other resources of the participant, but does suspend deferrals for 12 months, etc.)

2) The hardship is post-secondary school tuition (a safe-harbor hardship) but the plan sponsor checks the resources of the participants to determine if the distribution is necessary to meet the hardship (that is, does not suspend deferrals, etc.)

I am confused as to whether there is one set of safe-harbor rules which must always work together, or whether there is a separate set of safe-harbor rules for each of the 2 tests that can be used separately.

Any cites would be greatly appreciated.