Does anyone have an idea of what generally is the impact when the cost of Health insurance to employees is increased significanlty. How does it affect 401(k) participation?. Are there any IRS/DOL notices or advices? out there?

Thanks

A question has come up during audit season, and that is how to report contributions receivable. I am always of the belief that contributions should be shown on the audit (and 5500) on an accrual basis, but a partner has questioned as to whether or not it could be reported on a cash basis, to tie to actual contributions received by the trust in a Money Purchase plan situation where contributions are funded monthly. That is, the December contribution, received in January of the next year, is shown on next year's 5500, while last years December contribution is shown this year.

Any comments would be appreciated. Thanks!

I have a compnay that wants to make their company stock option an investment choice in the 401K. Besides the admin hassle, would their be any problem if the option pricing was the same for everybody. (no discrimination)

Can I convert froma 401K to a Roth without penalties, and if so how??

I can find no upper limit on the number of employees for adopting employers of Simplified Employee Pensions. 25 is stuck in my head, but that may be for only the old SARSEP's. Can any employer adopt a SEP?

Is there section 415 limit coordination between two nonprofit entities that each offer 401(a) DC plans? Some employees work for both nonprofit entities.

In other words, do we have two of the full $30,000 section 415 limits?

The entities consist of a section 115 school and a separate section 501©(3) hospital.

Thanks,

Johnny

I understand that governmental plans can not maintain 401(k) plans unless the plan is a grandfathered 401(k) plan. Does this mean that matches (in any types of governmental plan) are limited to grandfathered 401(k) plans only? It seems like 401(k) and (m) are inseparable.

Can a governmental plan that is not a 401(k) plan (e.g., 457) provide for matches?

Thanks.

I am the Benefits and Compensation Manager for an international law firm with about 500 attorneys. Currently, we allow our Associates (non-partner attorneys) to participate in our 401(k) plan with deferrals only. The are not eligible for a matching contribution nor are they eligible for the firm basic contribution. This has generally been standard practice in the past with other law firms, but I'm wondering if this is now changing.

We are hearing from our Associates that other firms that they have spoken with are indeed giving Associates a match and some even a firm basic contribution. I would love to hear from any other B&C Managers at law firms to find out just what the trend is these days. I really appreciate any feedback! Thanks.... Susan

Are the rules for making a trust a designated beneficiary for a Roth IRA the same as the rules for a traditional IRA under Prop Regs 1.401(a)(9)? Can a revocable living trust serve as a beneficiary?

Plan sponsor wants to make several non-required amendments for 1999 (e.g., change eligibility age, maximum contribution pct). None of the amendments involves a potentially disqualifying plan provision.

Question: Is it allowable to simply operate in 1999 as if the amendments were in place and then include these provisions when processing the required amendments in 2000?

I ask the question because it appears that this procedure is allowable in the case of potentially disqualifying plan provisions. In other words, is there a distinction to be made between amendments that relate to disqualifying provisions and amendments that do not, when it comes to using the extended deadline for required amendments?

Client is an S Corp with a 401(k) PS Plan.

They are considering converting to a C Corp.

After conversion, would the sharelholders be permitted to take participant loans against

accounts attributable to contributions

while an S Corp? Or only against

money contributed while a C Corp?

Funding or Tax deduction?

For Funding (minimum funding standards) contributions must be deposited within 8 1/2 months after the close of the Plan Year. (IRC Section 412)

Deductions get a bit more complex, and it depends both the fiscal year end and the plan year end. Also, past deduction (accounting) practices can come in to play. Do you have a specific example?

Sal Tripodi's TRI Services web site (http://www.cyberisa.com) explains that the new $85,000 number (up from $80,000) would apply in 2000 to a calendar year using a prior-plan-year lookback definition such that, for a plan year which begins January 1, 2000, the $85,000 compensation limit will be applied to compensation for the period January 1, 1999, through December 31, 1999.

Has anybody heard anything different?

Hi Pax,

Try WoPEc's Electronic papers in economics for a number of listings that seem to touch on your topic, including titles like "Retirement Trends & Patterns in the 1990's" & "Why Are Retirement Rates So High At 65?"

[This message has been edited by Greg Judd (edited 10-25-1999).]

A Plan excludes one of several plant locations (all NHCEs) from the profit sharing portion of the plan but these employees do participate in the 401(k) and 401(m) portions. (There is no 410 problem) Based on the Plan documents, these NHCE employees while not eligible for NECs would be eligible for QNECs.

If a QNEC needs to be made do we now have a 401(a)(4) problem since aggregated NECs and QNECs have to pass 401(a)(4) under k regs? The profit sharing plan has a safe harbor allocation, does the addition of these NHCE employees who receive QNECs but no NECs blow the safe harbor? Is a general test now requried?

The alternative of excluding these NHCEs from the QNEC makes no sense from a policy standpoint.

Have you examined the dialogue on this topic on the DB Message Board?

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I need to determine whether the 1000hrs. requirement for not excluding part-time workers is a requirement of the IRC only or if it is an ERISA requirement also? The plan is not qualified under the IRC but subject to ERISA.

Can an employer tell the person paying Cobra that there was an increase 6 months prior, and ask for the back premium increase to keep coverage ?

Can anyone recommend some good resources that deal specifically with fiduciary issues within multiemployer plans? I have been asked to do research on a number of fiduciary issues including reciprocity agreements, settlement of contribution liability, etc.

HOPEFULLY SOMEONE CAN HELP ON THIS ONE. I HAVE A C CORP CLIENT WHO SEVERAL YEARS AGO TOOK STOCK OPTIONS FROM A CUSTOMER IN LIEU OF CASH FOR SERVICES. THE CLIENT WOULD LIKE TO ASSIGN THE OPTIONS TO THE COMPANY RETIREMENT PLAN INSTEAD OF MAKING A CASH CONTRIBUTION TO THE PLAN. THE OPTIONS HAVE AN EXERCISE PRICE OF $3.50 PER SHARE AND THE STOCK IS PUBLICLY TRADING AT $63.50. CAN THE OPTIONS BE ASSIGNED TO THE MPP AS A CONTRIBUTION AT $3.50 PER SHARE. PLEASE CITE ANY APPLICABLE IRS REGS.