Employees are transferring from a taxable employer to a related tax exempt employer. Is it going to be possible to transfer the balances in their nonqualified deferred compensation plans to the "ineligible" 457(f) plans maintained by the tax exempt employer? If so, will the 457(f) rules for taxation apply to the funds, or are the taxation rules that apply to nonqualified amounts held under a taxable employer's plan grandfathered in some way?

This involves "single premium" purchases of annuities for plan participants (e.g., upon plan termination). I've heard that some insurance companies are providing additional compensation to agents brokering this business (e.g., 1% over and above normal agent commissions). While the commission is disclosed to the applicable plan fiduciary, the additional reimbursement is not. Basically, insurer position is that additional 1% isn't a commission payment so that it doesn't need to be disclosed to fiduciary (even though the plan is paying the additional amount). Any feelings on the propriety of this lack of disclosure. Should fiduciary be informed of this or is this something that must be disclosed to him. Also, is anyone aware of any current legislative/regulatory activity designed to require disclosure of the "reimbursement" in these situations. Thanks for any information.

Our document allows plan participants who have terminated and forfeited non-vested employer contributions to have these previous forfeited amounts restated upon being rehired only if the participant "repays" the amount that was previously distributed to him/her. My question is -- where does the money come from? If the part takes a cash distribution and spends the money can he buy in with non-qualified money? What source shoud the money be placed in? Same sources that it came from or a new source? One legal source says ANY money can be used to buy back in and it goes into a after-tax source. This does not seem true to me. This would allow participants to leave the firm roll over assets to an IRA come back to the firm and take their non-qualified money and place it into a tax-deferred account. Besides not all plans have after-tax source. Thanks for your help and if you have any references I would please reference them.

All things equal, should GUST amendment be made now or later? I have been waiting, hoping to get the last word/extension before amending plans.

What are others doing?

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We work in the Boston, MA. area. Last week

we had a big debate with potential client-we said Qualified Plans offer best creditor protection for assets. Far superior to IRAs

for ex. which can be attached in MA. He said

prove IRAs can attached in MA. Anyone know

cites in MA. that IRAs are vulnerable? Thank You for help.

A non-spouse beneficiary inherits an IRA where the owner had begun minimum distributions. The beneficiary continues distributions as rapidly as the owner was taking them.

Question: Can the beneficiary name her own new beneficiary to inherit the IRA upon the beneficiary's death? Or do the proceeds automatically go to the beneficiary's estate?

It would seem that some designation should be able to be made (leaving it to her trust or to another individual) but in all my research I cannot find an answer to this.

Thanks for any help.

I would like to know if there is anything we can do to help our company. I'm a chairman on our ESOP Advisory committee - and we've got a major problem at the office. Our President is driving the company into the ground, the retired owner wants nothing to do with the company, and all of the good employees are leaving - which means new employees coming in, higher expenses for training, and lower productivity. Our costs have been raised to our clients 2 times in 7 months becuase of the salaries being paid to administration now - yet when it comes time for a raise for production level people - they say there is no money. Our President is sucking us dry and I can't seem to find anything we can do about it. SOMEONE HELP!!!

client wants to set up a Profit Sharing or Money Purchase Plan for business owner only, no other employees work or will ever work 1000 hours, therefore, would never join Plan. Is there any way to permit these "non-eligible" Employees to make 401(k) deferrals without running into the top heavy requirement? These Employees would never be vested in the top heavy contribution...and it seems there should be a way to avoid it?

Can anyone shed some light on how the adoption assistance Section 127 works under a cafeteria plan. Is it a reimbursement type benefit? Help!

Since my spouse and I are taking advantage of the 4-year averaging on our $100,000 IRA Roth conversion we are faced with reportable income that bumps us up near the 28% tax rate. I currently contribute the maximum allowable under my salary reduction agreement with my employer's 403(B) plan. We also both have self-employment income which is expected to boost us up into the 28% bracket during the 1999 - 2001 period that we can spread out our conversion tax liability

We have both set up SIMPLE IRA's to provide the opportunity to tax defer enough of our self employment income to get us back down to 15% for at least the 1999 - 2001 period.

We are considering the following strategy for the next several years:

1) Divert enough of my 403(B) salary reduction funds into our SIMPLE IRAs to reach the maximum allowable (max. of $6,000/yr, or 100% of net self employment income).

2) In Jan. 2002 transfer funds in our SIMPLE IRA's to regular IRA's (which is permitted 2 years after initially setting up a SIMPLE IRA) then convert to a Roth IRA. By 2002 we will have significantly reduced our reportable income (by $25,000/yr) since we have finished the 4-year spread from the first conversion. We would project that we could still report the income resulting from the 2nd Roth conversion and still stay within the 15% marginal tax rate for that year.

I would see this as a way to expose additional tax-deferred funds to the Roth advantages yet still pay taxes at the minimum 15% rate during this time period.

Any weaknesses in this strategy that I should consider before I alter my 403(B) salary reduction agreement with my employer?

In a plan that does not allow in-service withdrawals, a participant with a 1998 Required Minimum Distribution of $190 received a $2,000 distribution during 1998. The 1999 Required Minimum Distribution (based on the actual 12/31/98 account balance) was $750.00. The participant was paid $3,000 during 1999.

What are the consequences and correction for this?

Should the 1999 Required Minimum Distribution have been based on the 12/31/98 account balance increased by the amount of the excess payment in 1998 (increased by $2,000- $190)?

Is this a Prohibited Transaction requiring the employer to file a Form 5330?

Is the proper correction to have the participant repay the amount of the excess?

If the participant refuses to repay the excess, may the plan sponsor reduce the year 2000 Required Minimum Distribution amount by the amount of the prior year excesses?

Can APRSC be used or is there another IRS correction program that would be more appropriate?

It is unclear if the definition of includible compensation in IRC 403(B)(3)would allow a disabled employee to use the rate of compensation described in 415©(3)©. It seems that for 415 compensation the answer would be that the disabled employee may use a projected compensation assuming that he/she was still working, but for calculating the exclusion allowance in 403(B)(2)(A)the employee could only use W-4 increased by any deferrals. Is this true?

If the disabled employee could use the compensation rate for the exclusion allowance, it there any non-Code explaination available?

Under the final regs, spouses and dependents of covered employees must be given an indepenent election to continue benefits under COBRA. Is this true for medical reimbursement plans? My thoughts were that COBRA elections should be limited to the employee-participant (who could then submit claims on behalf of spouses and dependents).

The before tax benefits were not available to spouses and dependents, and I'm not sure what benefit would be available for the remainder of the plan year to spouses and dependents.

Any thoughts? Also, do participants in premium conversion plans need an additional notice beyond that provided by the underlying health insurance plans. Seems to be duplicative.

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I have a client who sponsors a SEP and now wants to add a new 10% Money Purchase Plan. The SEP came first, the company uses a 5305-SEP, which cannot be used once the MPPPlan goes in. I cannot locate a prototype SEP from any vendors or other providers. Can anyone help me find a non-model SEP document?

If a plan terminates and purchases annuities with an insurance company, what is a participant's recourse if he believes that his benefits are incorrectly calculated? Would the insurance co. be on the hook? Or is it too late by then? Any thoughts out there? Any citing? Thank you.

Gary.

Is there any reason why a 5500 could legally not be filed (long or short form), such as less than a certain # of employee or participants. Thanks.

The IFEBP recently held a forum for multiemployer and public sector coalitions and some of the discussion focused on myths and misperceptions about coalitions that keep some funds or employers from joining. Among the myths and misperceptions identified were the idea that funds or employers lose some autonomy in joining a coalition and the thought that coalitions are no different from PPOs. Has anyone been confronted with these or other misperceptions and how did you address them?

I am researching what helps to retain employees, ex. what should be in the benefits package. this is a high tech. company, new, will grow rapidly. there is alot of competion for the best employees. what have people found helps to keep them. thanks

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LMP

I am researching what benefits are wanted and will help to retain employees. this is a technology company. any suggestions would be greatly appreciated.

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LMP

Does the following idea work (or what's wrong with what I have in mind?)

Company X sponsors a DB plan for its one employee. Both the business and the plan are 12/31. 1999 minimum required contribution is $60,000 and maximum deductible is $80,000, similar to prior years.

The business owner would like a small deduction for 1999, around $25,000, and then return to his "usual" deductions (60-80K) in future years.

Let's assume that changing the plan formula, assumptions, funding method, etc. are not options.

I propose that he make a $25,000 contribution on or before 3/15/00, NOT go on corporate tax extension for 1999, and make the remaining $35,000 contribution between 3/16/00 and 7/31/00. With this approach, he will have made his required 1999 minimum contribution by 7/31/00 (and met minimum funding standards), but only $25,000 would be deductible for 1999 (since the other $35,000 was made after the corporate tax deadline).

I think that works for 1999.

But what about 2000?

Assuming the min/max for 2000 is again 60-80K, I would suggest him contributing $45,000 on or before 3/15/01, NOT going on tax extension for 2000, and contributing the remaining $15,000 between 3/16/01 and 7/31/01. In this case, the minimum funding requirement of $60,000 would be met for 2000 (the $45,000 contribution and the $15,000 contribution). $80,000 would be deductible for 2000 (the $35,000 contributed in early 2000 for 1999 but not deducted because it was contributed after 3/15/00, plus the $45,000 contributed before 3/15/01 for 2000).

The $15,000 contributed before 7/31/01 (which was used to meet the 2000 minimum funding requirement) would be deducted for 2001.

2001 and later years would be treated similarly.

Did I miss anything?

[several points. I recognize that the contribution timing is extremely critical and must be coordinated carefully with the tax filing deadline. That's OK because the client is very sophisticated.

Also, I don't think there is a 10% excise tax for any nondeductible contributions as long as these contributions are made in the same year as the deduction. For example, there is no excise tax on the $35,000 contribution made in early 2000 that is used for 1999 minimum funding and is deductible for 2000.

Finally, I recognize that starting in 2000, we might have to do two actuarial valuations each year because there are different asset values (one for 412 minimum and one for 404 maximum).]

Thanks.

would like to deduct