A plan failed the ADP test and the plan document calls for forfeiting the match associated with the deferrals that will be returned to the one HCE causing the failure. The plan also failed the ACP test and will do a corrective distribution to pass the ACP test. Since the amount returned to pass the ACP test exceeds the amount of associated match, can the associated match provision be ignored in this case?

Would it be possible to use a qdro on a nqdc plan account?

Since S Corp dividends attributable to only unallocated ESOP shares can be used to pay off an ESOP loan, how does an ESOP sponsor avoid a situation where, due to level loan payments occurring over the years of the loan, the number of allocated shares in the ESOP get higher and higher as the debt is paid, leaving fewer and fewer unallocated shares? This reduction in unallocated shares also necessarily reduces the amount of any S Corp dividend distribution that can be used to repay the ESOP loan in the later years of the loan. This is especially problematic where the S Corp's 25%-of-payroll contribution may not be high enough, when combined with dividends allocated only to the shrinking number of unallocated shares, to support the debt service at the tail end of the loan. For an S Corp, owned 100% by an ESOP, with a stable and steady income stream, would it be possible to make minimal contributions (less than the 25%-of-payroll) to the ESOP for a number of years early on in the loan until such time as the company's steady and healthy income stream has allowed the S Corp to accumulate enough earnings (tax free) within the corporation to make one huge dividend distribution to the ESOP which would allow the entire loan to be paid off? Is this a risk with the possibility of some sort of UBTI tax looming out there?

Have a 10/1/99 effective date on a safe harbor 401(k). Min age 21, 12 months service. Employer tells me most of the employees are part time, work less than 16 hours per week, and were hired 5/98.

Problem is, I usually have effective dates of 1/1 on my plans, not 10/1.

Would the first 1000 hours for eligibilty run from 5/98 to 12/98 and if the hours were not met, they would not come into the plan on 10/1/99?

Or is the year measured from 5/98 to 5/99 and if they didnot have 1000 hours in that period, they would not come into the plan 10/1/99??

May an Employer that started business 8/1/99 make the effective date of a Plan 1/1/99?

Employee states that his daughter will start

counseling in '2000 for Depression. I've referred to the Publication 502 and I don't see anything that specifically states "Counseling". I've have read the Psychologist and Therapy sections. Is counseling considered an eligible expense? Thanks! Yvette

There are no rules on who can be a beneficiary other than what are in the plan document. There are certain rules when figuring out minimum required distributions for non-spouse or non-human beneficiaries. There shouldn't be a problem with this designation.

I have self-employment income and have set up a SIMPLE IRAin which I plan to direct both my "employee" contribution of up to $6000, and my 3% "employer" contribution. I understand that as an "employee" the amount that is available for my contribution would be after my 7.65% "employee" FICA amount is deducted.

My question is whether I need to also to deduct my "employer's" 7.65% FICA amount before I determine what amount is available to contribute.

If you sell stock in a company under a Roth IRA and that money goes into a money market account within the Roth IRA, how is the sale treated if it results in a loss?

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.