(I previously posted a similar query under "Retirement Plans in General". Thought I might generate more response here.)

Want to install a cross-tested MPPP with the understanding that the allocation formula might need to be amended from time to time in response to changing revenue and/or employee demographics. Have seen a number of threads noting the IRS' "dislike" of frequent formula amendments in a MPPP. Does anyone know if this "dislike" has any statutory basis? Has anyone had any experience with the IRS regarding this issue?

My expertise is in retirement plans and I only know the very basics about the FSA. I have two questions regarding my husband's flexible spending account:

1. If he commits to making $2,000 contribution for 2000 and terminates 6/30/2000 after contributing $1,000, is he still required to make the $1,000 additional contribution? If yes, how since no payroll deduction?

2. If the answer to #1 is no and at 6/30/2000 he has spent $1,500 of the account, how does he contribute the remaining $500?

Thanks for educating me.

Situation. Single person makes $90,000 from employment, contributes 15% to 401K.

Also has private practice that earns $9,000 and contributes 13% to SEP.

so: Total income = 90K + 15 K = 105 K

retirement contrib =

90K x.15 = 13,500

9K x.13 = 1,900 totals 15.4K

so would AGI, or MAGI, = 105-15.4= 89,600

and thus would be full eligible for Roth contribution. help appreciated. thanks larry

A lot of mutual fund companies will do this subaccounting on an individual basis. American Century and Kemper (through the KemFlex product)come to mind. I can't say I remember the costs, though.

Well, at first I screamed: "NO NO NO"! But then I looked over 72(P), and other documentation, and began to second guess myself (which is often the case lately). I posed the question to a colleague who, after much reluctance, agreed you can do it. I guess this is one of the primary disadvantages in allowing multiple outstanding loans.

Great question. I'm eager to see other responses.

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A Plan states: You enter a Plan the first the day of the month which is next following completion of six months of service.

A employee starts on Jan 1. Does he complete 6 months of service on June 30 or July 1?

Can an employee be reimbursed for herbal medicines prescribed by a physician to treat a medical condition? My understanding is that vitamins, even if prescribed by a physician, are not reimbursable. Are herbal medications treated the same as vitamins?

My question is actually 3 questions, I've never run across a situation like this before.

1 - Can an employer request that an employee (or former employee) pay back an amount that was reimbursed to the employee under and FSA if that amount exceeded the employee's election. For instance if the employee elected $ 500 for the year and was reimbursed $ 600.

2 - If the employer cannot do so, can they add the amount that was over reimbursed to the employee's W-2 as a taxable fringe benefit?

3 - If a non-qualified expense was reimbursed in "error" can the employer add the amount of the ineligible expense to the employee's W-2 either as income or taxable fringe benefit?

I am new to this company and it appears that the prior Payroll/Benefits administrator was not particularly conversant with FSA regulations. So I am now trying to correct the situation as best I can. Your thoughts are appreciated.

What are the advantages and disadvantages of naming a bypass trust as beneficiary of your Roth IRA

Do we have to let an employee elect plan coverage in our open enrollment period when he was previously dropped from plan coverage for non-payment of premiums? Can we condition his reentry on collection of the past premiums?

Where can I find information on the various issues associated with individually directed accounts? I think the DOL had a recent Q&A posted or published somewhere, but I can't find that.

I was terminated by my employer in 6/99. I finally had to contact him in 10/99 to get paperwork. His plan year end is 9/30. He is giving me the 9/30/98 value plus my contributions? I am 100% vested in the plan. Shouldn't I be entitled to any earnings, divs, gaines/losses on my money from 9/30/98 until it is distributed? He has sent me a check for the rollover which I'm not sure I should accept, I have not signed that I have received final payment yet? What rights do I have? I have asked specifically in writing for a statement showing the current value and the latest is the check in the mail? I don't know what to do?

Okay gang, my boss has another "cutting edge" idea to implement. At a seminar she attended, a bank HR officer stated that they had reduced their turnover from 50% to 14% and attributed a good portion of their success to contributing $25/week to employees for child care. Of course, she didn't ask for specifics, so now I get to "research" this.

Running it through our FSA means that the money is taxed, although I don't see how that can be avoided anyway. Our payroll person is concerned about creating this new "class" of employees (those utilizing day care) and how to verify that they are actually eligible for the funds.

Do you know of anyone (or your company)that subsidizes child care when it is not provided on-site? I'd love to get some insight and ideas on how to administer this and any pitfalls that you see that I might be missing.

Hoping for a rousing good discussion on this one! Thanks in advance

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Good Luck!!!

Sheila K 8^)

How far back can the IRS require corrections in the event of a 415 violation? Are the refunds taxable in the current year?

Let's say you are calculating a profit sharing contribution for a Plan whose Plan Year ends on 7/31/1999. This annual contribution is integrated with Social Security, and is posted to the accounts in December 1999. Which taxablw wage base do you use: 1998's or 1999's????

Suppose a client is over 71 and has a couple IRAs and needs to take a distribution (and does annual recalculation so is not locked into a regular distribution). The client now intends to convert the smaller IRA to a Roth and pay income tax yet in this year on the conversion amount. Does such action count toward satisfying the age 70 1/2 required distribution?

Conflicting thoughts: No, because it is a conversion rather than a distribution. Yes, because money comes out and the IRS collects income tax so they should be happy.

I looked quickly, but did not find any written guidance to settle the debate.

Steve Hample

I am interested in setting up a Roth IRA via payroll deduction with a mutual fund company. Does anyone know of any no load fund families that will let someone contribute to a Roth IRA by having $25 deducted bi-weekly with a small opening deposit. The best thing I have found so far is a $500 minimum with a $50 payroll deduction minimum. Thanks.

Is there a distinction of which contributions that are used in cross testing a plan under 410(B) and 410(a)(4) ie Profit Sharing, 401(4), Match QNEC QMAC & Safe Harbor. Any cites would also be helpful.

Thanks.

JTS

[This message has been edited by Dave Baker (edited 12-15-1999).]

I have been asked whether certain contributions to a state retirement fund would be considered a prior year contribution for purposes of the maximum exclusion allowance. For example, employees in Illinois can purchase credit for out-of-state work, work with related agencies, or to obtain a service upgrade for prior years. The law refers to the purchase of annuities as a prior year contribution, but I know the IRS has looked at state retirement benefits during the audits I am handling. Any thoughts are appreciated (or cites).

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What is the going rate for setting up a cafeteria plan (medical/dental) for an employer with less than 100 employees?

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