I have a client with a 401(k) and MP plan combo. They allow deferrals ASAP but have a one year wait for match and MP contributions. Client wants to do the 3% NEC to the MP plan. All contributions in both plans are 100% vested immediately with no last day or hours requirements. The client wants all employees to get the maximum 25%/$30,000 every year between the two plans. My questions are -

He wants to use comp from DOP for the MP and match contributions but I don't think this is correct if someone is already in for the deferral portion and will be using a full year of comp for the deferrals but DOP comp for the 3% NEC, remaining 7% of MP and matching contributions. (Besides, I don't think there is a software system out there that will allow different comp for ADP and ACP testing, is there?)

Also, if everyone can defer ASAP, does that mean I have to put in the 3% NEC for those who have not satisfied eligibility in the MP plan in order to have a safe harbor on the ADP side for 1999?

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EAC

What SEC form is used for registering stock in a qualified plan?

What is the correction where it has just been discovered today, November 1, 1999, that a participant deferred $10,800 in 1998?

What is the correction in the following situation: Participant takes loan of $40,000. Participant had no outstanding loans. But participant's highest balance of a loan in 12-month period preceding the loan was $12,500. Can this be corrected under APRSC? Can this be corrected by having the participant repay $2,500 and reamortizing the remaining amount? What happens if the participant refuses to cooperate with the correction (repay the $2,500)?

Does anyone know what "post-secondary" education means for purposes of the hardship distribution requirements under the Code? There appears to be nothing in the Code or the legislative history. What is the general practice? Thanks.

-Shaun

Anyone know of any formulas used to calculate end of year bonuses? Any original ideas for "gifts", etc. would be appreciated.

If an LLC wants to provide deferred compensation benefits to its employees, can it do so to an employee who is also a limited partner in a partnership that comprises one of the LLC members? Could the employee be deemed a member of the LLC for compensation purposes?

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If an LLC wants to provide deferred compensation benefits to its employees, can it do so to an employee who is also a limited partner in a partnership that comprises one of the LLC members? Could the employee be deemed a member of the LLC for compensation purposes?

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Looking for web resources on this type of entity; particularly tax aspects.

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When a participant with a plan loan files bankruptcy, I understand that their plan loan payments stop. How is this handled administratively? Does interest still accrue? Does it stay on the books as a loan until there is a discharge of the bankruptcy? Is there any other option to the participant to start repaying the loan again after the discharge or do they only have the 30 days to pay? Etc.Etc!

Should the value of individual insurance policies held by a participant be included in the account balance for purposes of determining the maximum loan available? In this case, the participant had approximately a $100,000 balance, and $30,000 was the cash value of individual life insurance policies. Are they able to borrow $50,000 or $35,000?

Are non-electing church plans subject to 401(m) testing?

In order to have a valid trust under state law, the trust must have a settlor, corpus, etc. . .

Therefore, a trust will not legally exist until some minimum level of contribution is made (we usually say $50) and in order to be tax qualified under Code section 401(a), every retirement plan must have a trust.

I have downloaded some files from the Corbel website for Quantech 4 and loaded them in successfully. I have not downloaded any updates for a while, and there are lots of them now. If I download the one big file that as all the updates to date, whats happens :

1) How do I actually do the update once the one big file is in my QT directory ?

2) Is it s problem if the big update file contains files that I may have already updated in the past ?

3) Is this a preferred way (other than the download time) to do the updating process rather than trying to keep track of which ones you did and didn't do ?

Thanks..... John

A plan converts to cash balance plan. Opening balance is equal to present value of accd ben. The plan does not provide for lump sums prior to being converted. Is plan required to use 417(e) rates as a minimum? Any thoughts?

Since the IRS raised the 402(g) limits on 403(B) plans for qualified educational employees to 10,500 starting in 2000, does the special election under 402(g)(8) raise to 13,500? Yes seems to be the answer, yet I have been unable to find the number in any published tables? What about other special election limits?

Client terminated employment and tells me that he requested a distribution check from employer's 401(k) plan with no taxes withheld because he was going to deposit the funds into his IRA account.(I realize he should have done a direct to direct rollover.) However, when he received his check taxes were withheld. He has not cash the check. Can he return the check to the Plan Administrator and ask for either a new check or decide instead to do the direct rollover? Or is it too late? He does not remember receiving his options for methods of distribution or having signed a form indicating his choice of distribution options. Thanks!

Client is 57 and has been taking 72t distributions for more than five years. Client now qualifies for disability and could take amounts that would be exempt under 72t.

Question is, does client have to wait until attainment of age 59 1/2 to take additional amounts over the 72t amounts currently being taken? I believe client does since 72t payments need to extend the longer of 5 years or 59 1/2.

(HHS Press Release 10/29/99) -

HHS Secretary Donna E. Shalala proposed today the first-ever set of national standards to protect the privacy of Americans' personal health records. The standards will apply to medical records created by health care providers, hospitals, health plans and health care clearinghouses that are either transmitted or maintained electronically, and the paper printouts created from these records.

"The privacy of Americans is protected in their bank transactions, their credit card statements, and even their video rentals. Yet, until today, Americans had no federal privacy protections for their medical records," Secretary Shalala said. "These proposed standards are an important step forward in protecting the privacy of some of our most personal information."

Shalala noted that Americans are increasingly worried that the privacy of their medical information will be violated. Some have even taken action to avoid creating a medical record, including withholding information from their doctors, changing doctors, or even avoiding care altogether. "We cannot allow the absence of privacy protections to compromise the quality of care in our nation," Secretary Shalala said. "Our proposals will provide Americans with greater peace of mind as they seek care, yet they are balanced with the need to protect public health, conduct medical research and improve the quality of health care for the nation."

The bipartisan Health Insurance Portability and Accountability Act of 1996 (HIPAA) -- also known as the Kassebaum-Kennedy law -- called on Congress to enact comprehensive national medical record privacy standards by Aug. 21, 1999. If Congress was unable to meet that deadline, HIPAA required the Secretary of HHS to issue final regulations by Feb. 21, 2000. Today's proposal marks the beginning of that regulatory process.

The proposal reflects the five principles outlined by Secretary Shalala in September 1997 as part of her Recommendations for Protecting the Confidentiality of Individually Identifiable Health Information:

Consumer Control. The standards provide consumers with important new rights including, the right to see a copy of their medical records; the right to request a correction to their medical records; and the right to obtain documentation of disclosures of their health information.

Accountability. The statute includes new penalties for violations of a patient's right to privacy. These penalties include, for violations of the privacy standards by the persons subject to them, civil monetary penalties of up to $25,000 per person, per year, per standard. There are also substantial criminal penalties applicable to certain types of violations of the statute that are done knowingly: up to $50,000 and one year in prison for obtaining or disclosing protected health information; up to $100,000 and up to five years in prison for obtaining protected health information under "false pretenses"; and up to $250,000 and up to 10 years in prison for obtaining protected health information with the intent to sell, transfer or use it for commercial advantage, personal gain or malicious harm.

Public Responsibility. Privacy protections must be balanced with the public responsibility to support such national priorities as protecting public health, conducting medical research, improving the quality of care, and fighting health care fraud and abuse. For example, public health agencies routinely use health records in their efforts to protect the public from outbreaks of infectious diseases. The new standards put in place how such information should be released.

Boundaries. With few exceptions, an individual's health care information should be used for health purposes only, including treatment and payment. For example, a hospital could use personal health information to provide care, teach, train and conduct research and ensure quality. However, employers who also function as health care providers or health plans would be barred from using information for non-health purposes like hiring, firing or determining promotions. Similarly, insurers could not use such information to underwrite other products, such as life insurance.

Security. Organizations that are entrusted with health information must protect it against deliberate or inadvertent misuse or disclosure. The proposed standards would require each covered organization to establish clear procedures to protect patients' privacy, designate an official to monitor that system and notify their patients about their privacy protection practices. In addition, those who get information and misuse it would be subject to the penalties outlined in the proposal.

The proposed standards would enhance the protections afforded by many existing state laws. In circumstances where the federal rules and state laws are in conflict, the stronger privacy protection would prevail. The proposed privacy standards would apply to consumers whether they are privately insured, uninsured or participants in public programs such as Medicare or Medicaid.

While the privacy standards proposed today are a significant step toward protecting patients' confidentiality, HHS does not currently have the authority to protect all medical records. Under HIPAA, HHS does not have the authority to protect records that are maintained in paper form only. HIPAA also does not allow HHS to issue standards for records that are maintained by other insurers, or by employers for worker's compensation purposes. The proposed rule does not establish appropriate restrictions on the use or redisclosure of such information by likely recipients, such as researchers, life insurance issuers, marketing firms, or administrative, legal and accounting services.

HHS also lacks the authority to provide Americans with the right to take action in court when their medical information is used inappropriately -- a critical consumer protection that only Congress can provide. The Clinton Administration has called upon Congress to close these important gaps and enact comprehensive national legislation to ensure that all medical records are protected.

The proposed rule will be open for comment from the public for 60 days.

[This message has been edited by Dave Baker (edited 10-29-1999).]

well, rumor has it if you are running NT, there are certain printing problems that you may encounter. we can not print any standard reports in landscape no matter what we do, they all come out portrait. supposedly there is a way to set the your environment, but I haven't heard back from Quantech yet. I will keep you informed as soon as I find out more. I just dont want anyone else who may encounter printing problems with 5.0 and NT to spend time trying to work around this problem.