A terminating 401(k) plan does not want to amend to provide for prior year ADP testing and wants to keep the pre SBJPA ADP correction method (leveling). Do we have to provide an amendment with the termination that basically states that we are electing to use provisions already in the plan? This is pretty much what the IRS is asking for with their "sample" ADP amendment.

Does anyone know the 2000 adjusted dollar limit for officer's compensation for the key employee definition? (It was $65,000 in 1999 and 1998.)

Also, the excess distribution dollar limit for partial distributions and lump sum distributions was suspended through 1999. Does anyone know the status for 2000?

I am new to the Roth IRA's, so please forgive me for my ignorance. My question is about when you can make contributions to the IRA. Specifically can you make a contribution in the same calendar year (even back-to-back days) as long as a different tax year is indicated on the contribution.

For example:

Can I send in $2,000 on Jan 1st, 2000 for the 1999 tax year and send in $2,000 on Jan 2nd for the 2000 tax year.

Thanks for your time!

A question that has been probably been asked many times, but I need help/clarification:

Item 6 of Schedule F asks for total costs of the fringe benefit plan for the year. The instructions (note) then indicates to "enter the amount of the salary reductions and other employer contributions... Nonelective contributions...are the employer's portion of the cost or premium contributed as employer-provided coverage under a cafeteria plan arrangement."

Therefore, for the premium coverage under a cafeteria plan, do the costs include both the employee portion of the coverage (paid on a pre-tax basis), as well as the employer paid portion of the coverage? The rest of the costs (Reimbursement, Dependent care coverage) are not at issue here.

Thanks much!

A straight profit sharing plan that is currently integrated with SS (integration level=$15,000 and a maximum integration level percentage of 4.3%) is adding a traditional 401(k) feature effective 1/1/2k.

Will the fact that the plan is integrated have any bearing on the 401(k) addition?

If it will not have any negative impact on the plan, they want to continue integration.

How does one make a decision as to what tax base and integration percentage is best? Does anyone have any suggestions for me to help guide this client?

thanks in advance for any help.

Short answer is that stating that the maximum elective deferrals is the Section 402(g) limit ($10,000 in 1999; $10,500 in 2000) is permitted. One doesn't have to state a maximum contribution percentage

Some reasons why having a maximum contribution percentage might be a good idea:

- Your 401(k) recordkeeper might require that its plans state a maximium contribution percentage.

- To keep contributions (especially from nonhighly compensated employees) rising when employees' compensation rises, you might prefer employees to make elections in terms of percentages of compensation, not dollar amounts. Elections as a percentage of pay may be more consistent with your communications campaign.

- Elective deferrals in excess of the 415 limits may be refunded only for certain reasons. I'm paraphrasing the regulation very loosely, but in general one can only correct 415 amounts if the error wasn't reasonably foreseeable. This is the reason most plans set the maximum contribution percentage at no higher than 25% minus the percentage of pay of all other defined contribution plan contributions and forfeitures.

Can anyone assist me with information concering Multiple Employer 401(k) plans? Do Employee Leasing companies use them? How do they differ from single employer plans?

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An IRA owner must calculate the RMD on each IRA separately but is allowed to withdraw from all or any one. Can an heir who has more than one inherited IRA do the same?

When a nonspouse beneficiary inherits an IRA after the RBD (joint life expectancy, owner's life recalculated and beneficiary's term certain) what is the proper method of determining the RMD? Pub 590 page 25 under "If you die and your designated beneficiary is not your spouse" states that the heir must use his life expectancy as adjusted by the single table. (Start with the joint life expectancy in the year of 70.5, subtract the number of years that have elapsed, find the closest to, but less than figure in Table I). This is quite different than Section 1.401(a)(9)-1 Q & A E-8 Example 2. In the reg, you simply subtract the number of years that have elapsed from the intial joint life expectancy.

Also, has anyone noticed the error in this Example 2 of E-8?

"The calculation of the minimum payment for 1989 is as follows:

1) Life expectany of brother (DOB 7-20-1920) (using age as of birthday in calendar year 1988 from Table V of section 1.79-9) = 18.4"

1987 was the year of 70.5 in the example. 1988 was the year of death. The life expectancy of 7-20-1920 brother would be 17.6 when 68 years old not 18.4 as stated.

Do you agree that the error is in the year? 1988 should read 1987--the year of 70.5. Right?

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I have a client who has a 401(k) plan which is currently matching 50% of each participants deferrals. Matching contributions cannot exceed 6% of salary. Also, the plan is top-heavy. The client would like to adopt a safe harbor plan to avoid the ADP & ACP failures it consistently encounters as well as meet its top heavy contribution requirements. If the plan makes a safe harbor contribution via the 3% nonelective contribution, am I correct that the top heavy minimum contribution requirement as well as ADP safe harbor test would be satisfied? And, I believe the current matching provision would need to be amended to limit matching contributions on no more than 6% of salary to meet the ACP test safe harbor. Comments please...

I am trying to compile information for my understanding on worker's compensation (wc) insurance from an employer's standpoint.

I understand there are classification codes for different industry areas. What are they?

How much wc coverage does an employer have to carry? Is that their call or does some governing body determine that amount?

Am I correct in my understanding that interest on a participant loan to an HCE is never deductible - even if loan is secured by the HCE's home?

Sole-proprietor currently sponsors SEP (via model Form 5305-SEP). Wants to adopt paired MP & PS Plans for 1999. Glitch - has already partially funded SEP for 1999. Rather than transfer SEP to a prototype (to allow a companion QRP) and coordinate the "discretionary" contributionn between the SEP and the PSP for 1999, can client request a refund of his 1999 SEP contribution (plus income) in order to, in effect, "un-do" the SEP contribution?

I have a friend who is having money deducted for a savings plan. She has asked for a prospectus of the plan and has been denied. What are her options?

Are there any restrictions on owners pertaining to obtaining loans against their 401(k) if the plan allows such arrangements?

?

[This message has been edited by msearle (edited 11-07-1999).]

Can participants of a 401(k) plan roll over company stock after they have left the company and begin participating in a new company's 401(k)? In other words, the previous employer's stock is down, and the separated employees don't want to cash out or roll over to IRA because they want to be able to take a loan out against it.

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We originally filed a full Form 5500 without the required audit report, but we are eligible to file a 5500 C/R (with no audit requirement). Can we now file a Form 5500 C/R for that prior year to replace the full 5500 that was originally filed?

We originally filed a full Form 5500 without the required audit report, but we are eligible to file a 5500 C/R (with no audit requirement). Can we now file a Form 5500 C/R for that prior year to replace the full 5500 that was originally filed?

We originally filed a full Form 5500 without the required audit report, but we are eligible to file a 5500 C/R (with no audit requirement). Can we now file a Form 5500 C/R for that prior year to replace the full 5500 that was originally filed?