When a sponsor establishes a plan with a mandatory 414(h) provision, I know that an employee can make a one-time irrevocable waiver not to participate and the regs regarding 401(k) plans state that such a one-time election will not be treated a a cash or deferred election. Treas. Reg. 1.401(k)-1(a)(3)(iv). However, in this reg, it states that, amoung other requirements, the waiver must apply to "contributions....... made by the employer on the employee's behalf to the plan and to any other plan of the employer (including plans not yet established) for the duration of the employee's employment with the employer....."

What if the employer adopted a plan in the future requiring no employee contributions? What if the employer amended the original plan to abolish the 414(h) provision?

Am I reading too much into the reg. or is the employee just out of luck for good with that employer?

Does the reg. only apply to future plans with employee contributions?

Thanks to all for the feedback.

When a fiscal year plan is amends to a calendar year plan is the top heavy test applied correctly in this example?

Year 1: 9/98 - 8/99

Year 2: 9/99 - 12/99

Year 3: 1/00 - 12/00

Determ Date yr 1 = 8/99

Determ Date yr 2 = 8/99

Determ Date yr 3 = 12/99

Our firm has developed IVR/internet software that interfaces with HR systems and benefits vendors systems so that employees can enroll for all of their benefits using touch tone telephones or the internet. We collect the enrollment information electronically and send a file extract to the HR system or vendor so they can update benefits elections electronically. We also help employers create internet or intranet employee benefit self-service malls where we post summary plan documents, policy manuals, benefits overviews, personalized benefits statements, benefits & HR forms, provider networks, and a host of other benefits related information. The forms can be customized to be either down-loadable or interactive with a link back to HR systems and/or carriers' databases so that when changes are made databases are automatically re-populated. Our system runs on our hardware and software and we make it available to employers as a service bureau which is the best way to make the service cost effective. This is a production system so we won't be learning our business at your expense. We are a firm that has been in business for twenty years with great references. We are interested in meeting with mid size employers (500 - 25,000 employees) that would like to automate their annual benefits enrollments using telephones or the internet. Please call me 800-477-7822 x219 or e-mail me wdg@ipi-ivr.com if you are interested in learning more about our service. You can also find me speaking at IFEBP functions in Lake Tahoe, Orlando, and Palm Springs.

I am a 26year old us citizen (with dual nationality). I'm working in the US at the moment but am planning to work abroad in the future. Can anyone tell me if I am eligible to establish a Roth IRA and contribute to it from my overseas earnings?

Thanks

I have a plan that for the plan year ending 12/31/99 there are no highly compensated employees, however next year there will probably be one. How do you go about determining how much that individual can put in the for the PYE 2000, so that there test will still pass. I know there is someway to calculate it, but I'm just not real familiar with how to go about doing it. Any help would be appreciated.

I am working with the city of Kalamazoo on a poverty reduction plan. With this we are working on a living wage campaign. What legal documents could help us form an all inclusive plan to address homelessness, welfare reciepiants, and the working poor?

Please help with ANY leads that you know of

I have a leased employee covered by the leasing organization's DB plan. IRC 414(n)(1)(B) states that benefits provided by the leasing organization are treated as provided by the recipient organization. Is there a way to offset the benefits of a profit sharing plan with a DB plan?

My wife, age 32, has $11,600 in retirement fund and $7,600 in 457 deferred comp plan with previous employer who's asking her to rollover. She is now homemaker and has no plan to rejoin workforce. Please help with advise on what to do with all moneys. Very interested in Roth IRA, but don't know where/how to start. ALso, any recomendations on best institution with which to start Roth IRA?

Thank you.

[This message has been edited by Peter Truong (edited 02-16-2000).]

In the near future I will be leaving one job for a new position. I have a small amount in a 401K and would like to roll these funds into my Roth IRA account. Is this acceptable? I've seen quite a bit of discussion about rolling to a traditional IRA and converting from a traditional to a Roth but no mention of a direct rollover to a Roth. I understand I will have to pay taxes on the rolled amount and that another option may be to transfer this $ to my new employer's 401 plan but prefer the flexibility of a self directed Roth IRA.

I have a 401k DC plan which allows for deferrals and a profit sharing contribution. The sponsor is a not-for-profit entity. They would like to make a profit sharing contribution which would exceed the 15% threshold under 404. They are arguing that the 15% does not apply to them as they do not pay taxes as a NFP organization.

I am not aware of exemptions from the 404 limit due to an entity's IRS filing status. Does anyone know of such an exemption? If so, can I have a citation?

Can participants be allowed to change their elections mid-year if new benefits are added to the plan at that time?

Our company (less than 100 employees) has a cafeteria plan which includes a medical flexible spending account, insurance premiums, and DCAP. Besides the 5500 schedule F, do I need any other schedules (for example schedule I)?

If an employer has a discretionary match can he; 1. pre-fund his match as deferrals are made at different rates throughout the year?

2. if he plans on pre-funding the discretionary match as deferrals are made, does he have to state what the % will be at the beginning of the plan year?

It is my understanding that if an employer has a discretionary match, he can pre-fund as deferrals are made if he gives the matching formula before hand. To go along with that, it is also my understanding that once the ER starts to match during the year, the % can not be reduced only increased. The only way for an employer to have a true discretionary match is to wait until the end of the plan year. At that point he can state his match formula or state that a match will not be given. Am I correct in my thoughts? Thanks for the help.

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Bob Miller

[This message has been edited by Bob Miller (edited 02-16-2000).]

[This message has been edited by Bob Miller (edited 02-17-2000).]

We have a 401(k) plan that allows participant direction into a menu of investment funds as well as into employer stock (combinations allowed). Deferrals that are invested in the menu are matched 25%; deferrals that are invested in employer stock are matched 75%. The right to these investments is available to each participant; each may choose to invest in the menu and/or the stock. Employees are aware that the higher match is available if they invest in employer stock. We may even have the same employee investing in both, thus getting 25% match on some deferrals and 75% match on others.

QUESTION: Must these different matches be tested under 410(B) as a "benefit, right or feature"? We think not, and are hoping not, since this is not actually what is described in the 401(a)(4) regs for BRF. We are hoping to apply the rules under (k) that since an employee is eligible to defer (or in our case, designate investments), but chooses not to, 410(B) still passes.

Any thoughts? Any authority?

Thanks.

Employee terminated in ESOP and sold stock back to corporation electing put-option with 5 year note. A 1099-R was prepared reporting distribution under the ESOP. The corporation issued separate 1099-INT for interest paid on note in 1999. Was this correct? Employee contacted IRS and was told interest on note should be reported on 1099-R? I haven't found this issue specifically addressed here and would appreciate any guidance.

I am new to this but I want to start investing...

I am a 32 yr old single male whom right now rents.

any suggestions on which to get into?

In the event that a company divests a subsidiary and the sub creates a plan for that year, do we consider prior compensation with the prior employer when we determine who is an HCE? (i.e. Company A spins off Company B as of 1/1/99 and B creates a 401(k) plan for their employees. Do we only count 5% owners as HCE's for the 99 discrim test?)

I recently came into contact with a defined contribution plan that was established in the early 1990's. Due to several communication glitches, the plan sponsor was not aware until 1999 that the 5500 related to the plan had never been filed. The sponsor would like to "come clean" with the IRS/DOL.

I once heard of a program whereby a sponsor could anonymously call the IRS/DOL to determine the best avenue for correction. Can anyone provide the phone number for such a program? Or, is there is a better way to start the correction process?

The sponsor would prefer to be proactive in the correction process rather than filing the 1999 return and waiting for a ding letter to arrive.

A health insurer is raising its rates, but refuses to provide the employer with claims history. The insurer states that it only provides such information to employers with plans over 150 participants. Has anyone ever heard of this and is there an employer "right" to this information? I can't imagine the new proposed privacy regs would limit an employer's attempt at utilization review.

The first plan year end was 12/31/99. We needed to use the assumed 3% deferral for NHCE'S to pass the test. For the plan year ending 12/31/2000 can I use current year data for testing? Thanks for any help.

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