It's a good thing IRS issued notice 99-44 and removed all ambiguities - that is, except at least this one -

for plans which do specifically provide the 415(e) limits (w/o reference to the Code) and which, therefore, must be amended to allow the increase (in those cases where they wish to do so), do we have until the GUST remedial amendment period extension to do so?

That is, must we amend before 1/1/2000 (and before the GUST amendments), or can we wait until the last day of the 2000 plan year?

By implication, Q&A 7 suggest we can pay the higher benefits during the 2000 plan year, IF the plan is so amended by the end of that year.

Is my understanding correct?

A 401(k) plan is using current year ADP testing and has semi annual enrollment. If the plan is out of compliance, can the Plan Administrator lower the HCE's deferral percent at this time or any time to help produce a passing ADP test?

How do you find out about their speed, accuracy and reputation? Anyone with bad or good experiences please respond.

Should the church withhold social security and medicare on amounts contributed to a 403b plan?

A non-publicly traded company with an ESOP (Plan A) desires to purchase all of the shares held by Plan A so that Plan A no longer holds company stock and is basically a profit-sharing plan. Plan A will ultimately be merged into the company's 401(k) plan (Plan b), where the participants will be able to direct the investment of their accounts.

After the repurchase of the shares, must Plan A continue to provide that a participant has the right to demand that his benefit be distributed entirely in company stock? My first thought is that this right is a protected benefit under 411(d)(6) and must remain, but this just doesn't seem to be a logical requirement.

Treas. Reg. 1.411(d)-4 Q&A-2(d)(iv) indicates that an employer can eliminate an optional form of benefit by substituting cash distributions for distributions in stock if the stock ceases to be readily tradeable. It seems to me that if stock has never been readily tradeable, the employer ought to be able to do the same.

Any thoughts?

Let me first say that this is not a church plan. However, we are finding that the rules that apply to clergy are a bit different than the norm and it seems that this is the best place to pose a question.

We have an MPP and a 401(k) plan for a client. Most of the participants are clergy (there are also some secretaries). The participants are deferring and receiving MPP contributions based on their W-2 comp plus their housing allowance. It is the only pay that they are providing us (the TPA). When we told them they were failing ADP, they insisted that the housing allowance is not includible for testing. (Please note that one participant had W-2 comp of $45,000 and a housing allowance of $36,000, making the total compensation $81,000.)

Revenue Ruling 73-258 seems to back this up. However, it is very old and pre-dates 415.

Here are my questions: 1)Can the clergy defer and receive benefits on the housing allowance portion of their compensation? 2) Do we include the housing allowance in ADP testing? 3) Do we include the housing allowance in 415 and 404 testing?

Our TPA cut checks to 2 participants in 12/98 for their 1998 MRD's. They never got the check or a 1099 so did not consider it when filing 98 taxes. (The distributions were small, $50-100 range.)

This is just coming to light now and our plan has cut replacement checks and recommends that the participants consult a tax advisor re: refiling 98 tax returns.

Our participants are livid, they don't want to refile taxes for money they never received and had no way of knowing to expect.

Our attorney advises us that even though the checks were cut in 98 if the participants never got the money it's too late to count it as 98 income and that the 1998 1099 should be reversed and issued for 1999. Our pension company says this will put the participant at risk for not receiving a MRD when required. Help.

Does anyone have experience with ADP or Trustar as TPA's for defined contribution plans? Your opinion is appreciated.

I am confused as to how a QTIP works. I have a married client-both she and her husbnd have children from a former marriage and no children of their own-who is the participating spouse of an IRA. We are in CA, so the husband has a community property interest in the IRA. They would like the IRA to ultimately be distributed 1/3 to his kids and 2/3 to her kids. I understand that the only way to do this is through a QTIP trust, because otherwise the surviving beneficiary is free to change the beneficiary desination after the death of the first spouse.

If I make the QTIP trust the beneiciary of the iRA, then if the wife dies first, the IRA goes into the trust, pays out all income to the husband for his life, and then goes to the children as agreed.

Question 1: At the wife's death, does all of the IRA go into the QTIP, or just her interest?

Question 2: What happens if the husband predeceases the wife? She is still the record owner of the account. Does any interest pass into trust, or does she keep the account in her name? If so, couldn't she still change the beneficiary designation after his death (providing he died before the RBD)?

Get in touch with a large no-load mutual fund group. Tell them your story. They will send you the paperwork to effectuate a Direct Rollover of your former 401(k) account to an IRA. I suggest an S&P 500 index fund. ROLL THE MONEY OVER FIRST TO A TRADITIONAL IRA AND THEN TO A ROTH IRA. DO THIS AN YOU WILL BE AN I WITNESS TO THE MIRACLE OF COMPOUND INTEREST.

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I am ready to start a Roth IRA, but I wonder. Is a Roth set up similar to a 401k plan where you decide to invest funds? If so, do you recomend a great place to open the Roth where you have the greatest range of choice, return, and access? Thanks.

We use Quantech for DC administration and Pentabs for DB.

What software is available for aggregating a DB and DC plan for the general test? I could add the EBAR from the DC plan to the normalized benefit from the DB plan in an Excel spreadsheet, but imputing permitted disparity is the problem.

Is there software for doing this?

Can anyone guide me to any information on issues to beware of concerning 401(k)plans when a company with a k plan buys another company with a k plan?

Is a plan administrator free to change carriers or to change from an PPO to an HMO pursuant to his or her discretion?

I've got an S-Corp as a client. They want to adopt a "premium only" cafeteria plan. I understand that 2%+ shareholders are treated the same as sole proprietors and partners (i.e., they can't benefit from tax-free treatment for medical insurance, and a cafeteria plan won't help to make the cost of coverage tax-free).

I've heard it said, however, that if the spouse of an owner is a legitimate employee, then the spouse can buy coverage tax-free through a cafeteria plan, because the spouse is not an owner-employee.

This seems too easy. Shouldn't the spouse be treated as an owner, as a result of the attribution of ownership rules under code section 318? (e.g., spouses are always treated as key employees as a result of 318.)

RIA's research service seems to confirm my reading. Has anyone heard of this back door approach? Have you seen any thing published by IRS that would support this approach?

Has anyone seen the actual IRS memo (a request for technical advice) which has been all over the press recently? I have been trying to find a copy of the memo but have been unsucessful.

An employer wants to have a 401(k) plan that meets the profit sharing safe-harbor, but wants to exclude part-time employees. Is it permissible under Notice 98-52 to have a one year 1,000 hour requirement for part-time employees but a 3 month requirement for "regular employees? I am not aware of any prohibition but would like confirmation if possible.

Based on my conversations with support on Friday, the new 5.0 disks will be mailed shortly. (I assume this will be true unless something else is discovered in testing)

Currently (at 5.0), if you code someone "Term and fully paid out" the system will treat him as 0 vested. This was a change from previous logic. Supposedly they will go back to the old logic, and retain vesting on such employees. That is good news for those of us who run distributions followed by forfeitures on annual plans. I was not clear if this will be on the new 5.0 disks, or if it will be a later 'fix'.

I work as a recruiter for a staffing company, and I'm trying to find some information for one of my clients on the average employee contributions for medical, dental and vision benefits? Also what is the average amount of sick and vacation pay/days offered in the first year of employment? Ideally this information would be most beneficial if it was derived from the following demographic information; Chicagoland area, and manufacturing industry/ 5-20 million in sales,and employees around 50-200. Thank-you this has been difficult information to find.

Can an employer require employees to pay for benefits while on FMLA (paid or unpaid)?

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RJ