May a Plan be amended to require Mandatory 401(k) contributions as a condition of employment? Has anyone had experience with doing this?

I have a Plan that in the document does not suspend 401(k) contributions for 12 months for employees who take hardship distributions? Is this permissable?

I need to know if Roth IRA's are protected from creditors in North Carolina. How can I find out?

I have been instructed by a tax lawyer to list my spouse as primary beneficiary of my regular IRA with trust as contingent beneficiary.

My desire is to maximize the unified credit against estate tax to pass assets to my children.

I have segregated sufficient assets (not IRA assets) for my wifes side of the trust; however, the only other assets available for my side of the trust is my IRA that I have sole ownership of.

It appears to me that if I leave the IRA to the trust or to my children, I will get the unified credit but loose the income tax advantaged nature of the IRA through rapid distribution of the funds. However, if I leave it to my wife, I retain the income tax advantage of the IRA but loose the unified credit.

Is there some loophole I am missing that allows both my wife access and use of the money during her lifetime and the unified credit when the monies are passed on to my children?

Is it safe to say that ERISA does not impose express obligation to provide individual participant account statements on an annual or more frequent basis but that doing so is necessary to obtain limited fiduciary liability pursuant to ERISA Section 404©?

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In 1983 Participant makes a TEFRA 242(B)(2) election to defer distribution until retirement and to take a lump sum at that time. Participant is now in his mid-80s and is retiring. How much of the distribution can be rolled over into an IRA? All? The balance minus what he would have had to take but/for the TEFRA 242(B)(2) election? Any cites on this?

[This message has been edited by KJohnson (edited 12-01-1999).]

Does an employer who sponsors a SEP on a Form 5305-SEP have to purchase a fidelity bond meeting the minimum requirements of ERISA?

Employee enrolls for next year's (2000) Health Care Flexible Spending Account.

Employee will receive her braces in February of 2000. At this point if employee pays her balance in full she will receive a 15% discount on the total price of her Orthodontics bill. Employee will be prepaying for a whole year's worth of Orthodontic visits. Is this Koser? I would appreciate any help here. Thanks!

I am writing a business plan for a small Calif. software venture and need HR data. Would you be so kind as to refer me to where I could find simple California industry HR standards such as a salary mark-up factor that would cover the extra costs of benefits/Healthcare/Retirement.

I pay my 10 year old child for doing chores and jobs at home. Can my child use this earned income to start a Custodial Roth IRA? Is there an age limit for children to open a Roth IRA?

How can we find missing beneficiaries (life insurance and defined benefit pension)for whom we do not have social security numbers? (This is not a terminating plan.)

What is our obligation to do so? If we have made a reasonable effort,(And what constitutes a reasonable effort? Do we need to hire a locator firm? Can they locate

someone without a social security number?) what then? Do we turn the money (in the case of pension) over to the PBGC? (Or does that just apply to terminating DB plans?) Will the PBGC try to locate them?

How can we find missing beneficiaries (life insurance and defined benefit pension) for whom we do not have social security numbers?

What is our obligation to do so? If we have made a reasonable effort,(And what constitutes a reasonable effort? Do we need to hire a locator firm? Can they locate someone without a social security number?) what then? Do we turn the money (in the case of pension) over to the PBGC? Will the PBGC try to locate them?

I am new to employee benefits, and I have some foundational questions.

1. If an organization gives its retired workers lifetime retirement pay when they retire, is that retirement benefit required to be a qualified plan or a nonqualified plan? In other words, can an employer give its retired employees lifetime retirement pay without that retirement pay being considered a qualified plan or a nonqualified plan and without that retirement pay being subject to the rules and requirements of each type of plan?

2. As a related question, what is a "plan"? Not what is an employee welfare benefit "plan" or an employee pension benefit "plan", etc? All of those terms use the word "plan" to define them. Rather, I want to know what a "plan", as used in those terms, is. It seems to me that ERISA is the law of employee benefit "plans", not the law of employee benefits. Therefore, if a retirement benefit is not considered a "plan", it seems to me that it would not be subject to any ERISA requirements.

3. How does the employer report the payment of the retirement benefits to the retiree? I'm not talking about the "ERISA reporting requirements", I am talking about how the payments to the retiree are reported by the employer. Can a 1099MISC be used, or do those payments have to be reported on a W-2 or 1099R? Does it make a difference if the retirement benefits are not considered a retirement "plan", and if considered a "plan", does the reporting of the payments differ it the plan is qualified or nonqualified?

4. What are the withholding (income tax, FICA, FUTA) requirements for (1)a retirement benefit that is not a plan, (2) a qualified plan and (3) a nonqualified plan. There has been no deferral of income in this case; so, I don't think that withholding prior to actual payment is an issue here. I may be wrong.

I would sincerely appreciate citations of authority and sources for your answers, if practicable. I hope that these questions are so foundational that those of you who are well versed in this area can answer these questions off the top of your heads. I would appreciate any feedback anyone could give. Please do not feel compelled to answer all of my questions. Any information will be helpful.

Sincerely,

Jeff Moore

Is it correct that when you receive a RMD, you can choose the amount of withholding or no withholding at all since an RMD is not an eligible Rollover Distribution? Further, is this also the case for any 457 - Deferred Compensation distribution since any distribution from a 457 plan is not an Eligible Rollover Distribution?

Has anyone run into these situations with HCEs in multiple (k) plans?

(1) HCEs 1 & 2 in Plan A both contribute $10,000. HCE3 in Plan B contributes $10,000. For the last few months of the year, HCE3 in Plan B becomes eligible for Plan A. With their deferrals included in A's ADP Test, Plan A fails and requires $3,000 in distributions. How is this handled? HCE3 made no actual deferrals to Plan A.

(2) Same basic premise as above, except all 3 HCEs make deferrals to Plan B, none to Plan A. Since they are eligible for both plans, deferrals are tested in both. Plan B passes, while Plan A fails. Sponsor does not want to aggregate. Are any distributions required? The HCEs made no actual contributions to the plan that failed.

Any PLRs or other cites appreciated!

I would like to know how administrators are handling adoption agreements for a 401k safe harbor. My client wants to provide the 3% minimum in another plan (his MPPP) that will actually provide a 4.25% contribution. The ER wants to provide 100% vesting for only the 3% safe harbor contribution. The remaining 1.25% contribution will be subject to a graded vesting schedule. How can I do this on a prototype adoption agreement? What are others doing with this issue?

Any comments are appreciated.

I'm trying to determine what is a tax exempt organization for 401(k) plan purposes. I only see them generalize the tax exempt organization. What is considered a tax exempt organization under pension simplification? I know that a 501©(3) can adopt a 401(k) Plan. Can a 501©(4) sponsor a 401(k) Plan?

Participant in 401(k) terminates employment and completes rollover forms to roll money into an IRA. Participant dies two weeks later before rollover to IRA is made. Beneficiary designation under 401(k) plan names A as the beneficiary. Beneficiary designation under IRA names B as the beneficiary. Who gets the money? The clear intent of the participant is for B to get the money, but the rollover had not yet occurred. It seems to me that A gets the money since there was not actually an IRA with money in it at the time of the participant's death (ie, the money was in the plan at the time of the participant's death, such that the 401(k) designation controls). How much weight, if any, is given to the clear intent of the participant?

Once and for all what is everybody doing about 04#s for new Plans? Some Providers and TPAs tell me you need them,some Providers and TPAs say you don't! I stopped about 6 months ago but now I'm not so sure. Any help?

Thanks.

We have a medical practice in which all of the nhces are leased employees. The leasing company has a 401(k) plan to which many of the employees make salary deferrals. The medical practice also has a 401(k) plan. we are exploring the possibility of counting the deferral made in the leasing company plan as deferrals in the medical practice plan and making a safe harbor matching contribution in the medical practice plan. Any opinions about doing this?