Participant and Spouse participate in the same Plan. Participant begins taking minimum required distributions from Plan based on a single life. Participant subsequently rolls the remaider into an IRA where she has to continue on a single life basis under the 401(a)(9) proposed regs.

Participant's spouse dies. Participant rolls the death benefit into the same IRA. Can participant take distribuitons from the "death benefit" portion of the IRA based on joint lives while continuing to take single life for the "retirement" portion of the IRA?

If a spouse waivers her right to a QPSA in a defined benefit plan (in order to avoid the charge for the QPSA)and the spouse dies before normal retirement age is there any way to provide spousal benefits?

The waiver was signed at age 35 of the participant and the spouse's signature was witnessed by a notary public. At age 45 the participant suddenly died and the plan administrator says no pension/death benefits available due to the waiver.

Do you have any experience with the QPSA waivers being overturned in court?

Here is a unique spin on a Section 410(b)cross-testing issue:

Client wishes to benefit his department heads across a controlled-group set of employers. The various department heads will receive a certain percentage of pay, based on their title. None of these department heads, as of now, are considered "highly compensated". The employer DOES NOT wish to benefit any rank-and-file employees; only the department heads.

My question is would this fly under IRC 410(B), under the "no highly compensated employee benefits" scenario? The attorney who is drafting this plan says he does this all the time, and no testing is necessary, as no HCE benefits.

Does this arrangement fly? Any opinions would be appreciated!

Thanks.

I work for a not-for-profit health care organization in NYS that offers a 403(B) plan.

We are paid every two (2) weeks and I have been told that the pre-tax deductions are deposited once a month (before the 15th) to the 403B.

The employer, in effect, is profiting from my money during that timeframe.

I am told I cannot participate in the 403(B) any other way.

Is this legal? If so, is anything being done to limit the time between deduction and deposit to employees' accounts? If not, can anything be done? How?

[This message has been edited by Dave Baker (edited 12-20-1999).]

We just took over a sponsor's standardized pension and p/s plans. There are two plans with two adoption agreements. The plans are 001 and 002. The account has been filing one 5500 since 1973, combining financial and participant data, indicating both plans in question 6c, but using the 001 number.

In our opinion this is not correct, but we are at a loss on how to correct it. Can we continue filing this way? Start filing 2 5500's and explain the situation to the IRS when they ask for past returns on 002? Notify the IRS/DOL and apply for correction under the VCR-like 5500 correction program? Any thoughts are welcome.

We took over a plan that was "allegedly" amended 4 years ago from a fiscal year to a calendar plan year. 5500's have been filed utilizing the amended dates since that time. however, the amendment cannot be located. Is there a mechanism for doing another amendment clarifying the situation other then APRSC or CAP.

Does anyone have a good checklist of things to ask the client for when taking over an existing plan?

May distributions from DB plans be made only on account of separation from service or plan termination? Where in the Code is this requirement? (I only see this for 401(k) plans). Thanks.

I am designing a small 401(k)profit sharing plan, calendar year 1999, of which for '99 there will be no 401(k) contributions. The employer wants to include all employees for the first yeat then have 21, 12 months for future years.

Problem is, may employees were hired after 1/1/99, some as late as 12/1/99.

I've thought as far as 1/1/99 effective date, double entry dates of 6/30 and 12/31 and the amending as of 1/1/200 for 1/1 and 7/1, but I don't think that will solve the problem of bringing in the people hired in December '99.

We're not talking of a huge contribution, the annualized % is around 7%, but I don't even want to think of a short plan year of 12/1/99 to 12/31/99.

The also want to go 401(k) for 2000.

Any ideas??

My employer (22 employees) has contracted with an employee leasing firm (over 4000 employees), and will begin using the service Jan.1. We have been participating in a SIMPLE IRA with our employer since Aug. 1, 1998. This plan will not be available to us from the employee leasing firm. They will be offering a 401K, but I have not seen any details of this so far. They also mention something about a Section 125 plan, which I've never heard of. Currently I have a Roth IRA. What are my options (and tax consequences thereof) for the SIMPLE IRA should I wish to move the funds? Are there any rollover options available, either into the 401K, Roth IRA, or a new regular IRA?

My concern is more with the tax consequences rather than the fees imposed by the existing plan for withdrawing from the SIMPLE plan.

Carl C.

A company found out that it overpaid someone by the tune of $40,000 w/r to his lump sum. Can a company require the individual to pay back this amount? WHat can the participant do? Any thoughts.

How long is a plan sponsor required to keep data records of an employee afer they terminate and receive their pension? Either in form of life annuity or lump sum. It appears from ERISA 209(a)(1) that records must be retained indefinitely. i.e. as long as there is a chance that the data to calculate the benefit is ever potentially needed. Are there any thoughts w/r to this or to other factors affecting this point?

If a sub S corporation leases all of its employees, including its owners, can the owners participate in the leasing company's 401(k) plan and borrow against their contributions? The leasing company uses a Multiple Employer Plan, and the sub S corporation has signed an adoption agreement specifying particulars of the plan that is applicable to them. (The adoption agreement still meets the qualified status). The leasing agreement does all the payroll for the sub S corporation and many others, so the leasing company could claim the sub S owners as their employees. Can these employees loan from the plan?

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I opened a Roth IRA in February, 1999 with $4,000 (for 1998 & 1999). Due to bad investments my account balance is now at $1,000. I would think that I could close this account and show a short term loss of $3,000. If this is correct, how do I go about claiming it on my tax return?

Can a Self-funded welfare benefit plan exclude breast reduction as an eligible benefit even if medically necesary? Would such an exclusion be considered discriminatory? Such an exlcusion would not be applied to mastectomies, only breast reductions.

Employer maintains a medical expense reimbursement plan. Under the plan, Employer contributes money each year to each employee's account, and the employee can get reimbursements for medical expenses incurred by the employee and the employee's spouse and dependents. Question: Are spouses and dependents Qualified Beneficiaries under the plan, and thus entitled to elect to have an account set up on their behalf if there is a qualfication event?

Has anyone heard from the IRS National Office about a possible extension of the restatement deadline beyond the 2000 plan year?

My employer terminated our 401(k) plan as part of a being acquired by another firm. Plan assets (mutual fund investments) were liquidated at the end of Sep. 1999 and rollover checks mailed at the end of Nov. 1999. Questions:

1. Do regulations specify how plan proceeds must be held during period between asset liquidation and disbursement? Can the employer, for exapmle, place the money in an interest bearing account?

2. If income was earned on plan monies during this timeframe, which party (employer vs. participants) should benefit?

3. Are there any regulatory guidelines dealing with timeliness of distribution of funds after termination, IRS approval, or liquidation of assets?

Thanks in advance.

We're considering ordering 2 of the resources authored by Q&A columnists:

1. The 401(k) Plans Manual by Stuart C. Harris and Kut E. Linsemayer.

2. Retirement Plan Distribution Book by Martin Silfen, Esq.

Has anyone used either of these? If so, would you be willing to share any comments about them?

Thanks.

In an asset deal seller terminates its plans. All employees are hired by a successor employer. However, successor employer has a 3 month waiting period for new hires. Are these employees M&A beneficiaries? It seems under the proposed regs that they may be left without coverage and with no COBRA rights for these 3 months.