I am in need of a legal opinion as to whether or not spousal consent is required in California when an employee designates someone other than their spouse as primary beneficiary for their life insurance benefit. Since California is a community property state it seems as though it is implied but I can't find anything specific. I know it is required on retirement plans. I have gotten varying opinions on this issue and any help or references would be appreciated.

401(k) plan has ees who transfer to another company that has no plan. It's determined that the same desk rule applies and no distributions are permitted. If ees are not fully vested upon transfer, but they are not terminated from plan, will they continue to accrue vesting service? Does it depend on how plan it written?

Is it legal for a city government to require its non-union employees to submit their prescription slips for brand name drugs to a city employee for approval if the employee wants to have it covered for payment under the employer's prescription plan?

It sounds like a violation of confidentiality of employee medical records, but I'd like to be sure and need an answer by 12/4/99. Please let me know which laws it violates (i.e. HIPAA, ERISA, etc.). Thanks!

An IRA nonspouse beneficiary can cause a trustee-to-trustee from one IRA to another. A nonspouse beneficiary of a qualified plan cannot rollover to an IRA.

Both spouses maintain IRA accounts and both are beyond age 70 1/2 and receiving minimum distributions based on joint life expectancy (not recalculated). One spouse dies and the other wants to rollover into their account. Can the minimum distribution on the total account continue to be calculated under the joint life expectancy?

A 401(k) plan has grown and is required to file a regular 5500 for the first time this year. The sponsor is changing the year-end date and will have a 3-month plan year ending 12/31/99. I will not be filing audited financial statements for the first of the two years, as allowed by the DOL exception. I understand that I must still submit unaudited financial statements with the first 5500. Questions: 1. Must the unaudited financial statements (which I am sending with the first 5500) be comparative? and 2. When I file the second 5500 with comparative statements, how many years should be shown, two or three?

Employer XYZ has two owners; nobody else works for this company.

The two owners are paid through a "leasing organization" ABC; their W2's show the EIN of ABC. They show no W2 income from their own EIN. (I think this is how this is structured.)

Can XYZ sponsor a pension plan using this income?

What other questions are important in this situation?

Coverage for an active employee terminates 12/15/99. The employee is enrolled in flex(medical account) for 99, but has already withdrawn the entire annual election. Annual enrollment is 12/1 - 12/31 and effective 1/1/00. Can the employee elect COBRA for medical only (not flex) for the last 2 weeks of 1999, add flex through annual enrollment for 2000, withdrawl the entire annual amount, and then drop flex (but continue with medical coverage) after the January's contribution?

I apologize if this question has already been asked and answered, but I did not find it on this Message Board's history.

The Colorado Public Employees Retirement Association maintains a grandfathered 401(k) plan. Participation in the Association by cities is elective. May a city (which has not previously maintained a 401(k) plan) now join the association and allow its employees to participate in the 401(k) plan?

The following is an excerpt from the Association's description of the plan.

PERA's 401(k) Plan was established on July 1, 1985, to enhance the retirement savings opportunities of PERA members. The 401(k) Plan provides all Colorado PERA members with a vehicle they can use to voluntarily invest some of their income tax-deferred.

Any active and contributing member of PERA is eligible to contribute to the Plan from his or her PERA-covered earned income. Your 401(k) contributions are in addition to your mandatory PERA defined benefit contributions of 8% of salary State Troopers and employees of CBI contribute 10% of salary). You can choose to contribute from as little as 1 percent to as much as 23 percent of salary plus Section 125 plan deductions, or you may designate a dollar amount (a minimum of 1 percent of salary is required).

All comments will be appreciated.

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Has anyone found a way to provide access to participants to Quantech via the Internet other than through Quantech's own interface? Any assistance will be appreciated greatly.

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A participant dies with an outstanding loan balance. The beneficiary requests payment of the remaining account balance, the plan defaults the loan, thereby creating a deemed distribution. With respect to the taxes that are now due on the deemed distribution, who is liable for the taxes on the defaulted loan? The participant (his estate) or the beneficiary?

Seven months ago my previous employer deducted two months contributions from my paycheck but did not deposit it into my 401(k)account. Furthermore, when I requested that my account balance be transferred to a new account sponsored by my current employer, only my contributions were transferred. The employer match balance was not. I am fully vested in the account. My previous employer stated that they did give me the balance of the employer match because they made a mistake. Apparently they just learned that they did not have to deposit the match unless they were profitable. Hence, they stated on the transfer form that I was 0% vested knowing full well that I was fully vested. Others who have left the company received their full account balance.

What are my options?

Is a VEBA subject to the limitation under ERISA Section 407(a)(2), which prohibits a plan from holding qualifying employer securities in excess of 10% of plan assets?

I know that there are rules preventing forced payouts of benefits under a plan without consent (unless less than $5000 or a distribution that is not immediately distributable), but what would be wrong with giving a participant an incentive to his or her consent to an immediate lump sum payout? (E.g., cash incentive). Arguably, this wouldn't violate the "significant detriment" rule under 1.411(a)-11©(2)(i). Any thoughts or suggestions? Thanks!

Does anyone have any experience in converting from FDP to Quantech? I would like to import as much as possible from FDP to save time, but I'm not sure of the steps I need to take or how much information I need to enter into Quantech before I can import. Any help would be greatly appreciated.

I am currently working with a multiemployer plan which has run into some problems being able to deduct the employer contributions. 412©(8) and 11.412©-7 seem to state that I can adopt a retroactive amendment within 2 years after the close of the Plan Year and be able to recognize it for 412 & I assume 404.

Lets assume that I'm working on the 1/1/99 valuation. The 98 Max was 100K and the employer contributions were 200K (both expected and actual for simplicity).

Can we amend the Plan now (12/99), effective 1/1/98, to increase retirees by 5% on 1/1/2000? Assuming it would generate a max of 200K in 98, if we had done it then, are we "ok" for 98 or does the amendment have to increase the actives benefit?

Does anyone know of any real guidence on this?

Would I have to amend the 98 Sch. B as well?

Any comments would be greatly appreciated.

I am currently working with a multiemployer plan which has run into some problems being able to deduct the employer contributions. 412©(8) and 11.412©-7 seem to state that I can adopt a retroactive amendment within 2 years after the close of the Plan Year and be able to recognize it for 412 & I assume 404.

Lets assume that I'm working on the 1/1/99 valuation. The 98 Max was 100K and the employer contributions were 200K (both expected and actual for simplicity).

Can we amend the Plan now (12/99), effective 1/1/98, to increase retirees by 5% on 1/1/2000? Assuming it would generate a max of 200K in 98, if we had done it then, are we "ok" for 98 or does the amendment have to increase the actives benefit?

Does anyone know of any real guidence on this?

Would I have to amend the 98 Sch. B as well?

Any comments would be greatly appreciated.

A bank which sponsors a defined benefit plan is contemplating the following 2 actions:

1. Replacing the existing trustee (a non-related financial institution) with the bank's own trust department.

2. Retaining an investment advisory company to serve as the plan's investment manager. The investment advisory company is owned 100% by an individual who is (a) the bank's president, (b) a member of the plan's administrative committee, and © a shareholder of the bank.

Are either or both of these prohibited transactions?

I am a payroll accountant and I have a benefits/tax related issue on which I can find no supporting documentation.

Can any one provide me with ideas of where to research whether or not an Executive may deferred compensation from one tax year to the next?

Our Tax Consultant assures me that this can be done "No problem", yet niether of us can lay our hands on anything in writing.

Any assistane would be appreciated.

CLKeown

Does an FSA plan year have to match a calendar year? For example, can I run a plan year for the flexible benefits from 7/1 to 6/30 of the following year or do I have to stick with 1/1 to 12/31?

Walter M.