OK, the limitations have been released and they do match the values calculated below!

based on the CPI-U values, you take the average of the July, Aug, Sept values and divide by 145.7667 (the average values for the last quarter of 1993.)

Sept value will not be released until mid Oct.

however, using June, July, Aug

166.2, 166.7, and 167.1 = 500/3 = 166.67

166.67/145.7667 = 1.14338

1.143380 * 150,000 = 171506.94 so 170,000 for $ limit

1.14338 * 9240 = 10,564.83 so 10,500 for deferral

1.14338 * 30,000 = 34,301.39 so still use 30,000. (but maybe 2001 we will hit 35,000!)

1.14338 * 120,000 = 137,205 so use 135,000 for DB limit

the HCE limit is 85,000

and the taxable wage base is 76,200

cpi-u can be found on the web

ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt

[This message has been edited by Tom Poje (edited 10-20-1999).]

[This message has been edited by Tom Poje (edited 10-20-1999).]

Former Participant takes cash distribution of entire vested account balance. 20% mandatory withholding is mistakenly not withheld. Looking for suggestions on how to correct. Will try to get former participant to return 20% to trustee so that it can be remitted to IRS. If not, Employer may have to "make participant whole". If this is the case, how does Employer do this? On what amount is 20% determined? The total amount that the participant received (mistakenly) or the original amount that he should have received? What are penalties for late payment of mandatory withholding? Where is this addressed in Code/Regs?

Is it ever permissible to roll funds from an inactive SEP to a qualified Profit Sharing Plan?

I have a plan that is in the process of terminating. The owner has a cash value life insurance policy for himself in the plan. How do I distribute that to him? He will be taking a direct rollover into his IRA, so can the insurance be rolled over also?

Must a profit sharing document state how forfeitures are to be dealt with in a plan? For example, must the document clearly state whether forfeitures are to be:

re-allocated to eligible participants

used to offset future ER contributions or

used to pay expenses of the plan

or may any of these options be used, regardless of what the document states?

thanks for any help.

A clients CPA is preventing them from adding a 401(k) provision based upon misinformation. What can I show the CPA firm to show them they are wrong?

Here is the situation:

Client with approximately 50 employees sponsors a Profit Sharing Plan that is top-heavy. Due to business conditions no contributions have been made for several years, and most likely none can be made for at least several more years. Client decided they would like to add 401(k) provision so at least employees could add to their retirement account balances. I advised them this was fine as long as key employees did not defer until such year that plan is no longer top heavy, so as not to trigger a top heavy minimum contribution.

However, CPA advised first advised them that if even a highly compensated employee who is not a key employee defers that that would also trigger a top heavy minmimum contribution. Now they are also telling the client that the only way the key employee can elect not to defer is to opt out of the plan permanently. Both these statements are dead wrong, but client respects his CPA.

How would you deal with this situation. Please HELP!

Our Company matches pre-tax and after-tax employee contributions to 401K. After employee has maxed $10,000 on pre-tax, can he go to after-tax contribution to continue to get Company's match? Thanks for your help and possibly where this info originates.

Our company had chosen The Vanguard Target Plan as it's 401(k) provider and Trustee.

What is required of the employer with regard to it's fiduciary responsibility? We've been advised that the DOL has specific requirements.

We have accounts remaining with us at this late date. Our company was never providing full administration of these plans and the SBJPA '96 forced us to exit the 457 line of business completely. Despite our best efforts, accounts remain with us still.

It was our understanding/opinon that we could not redeem these accounts without written instructions from the plan administrator/employer.

But now what happens? Has the IRS said what they can/will do to plans found to be out of compliance with the SBJPA '96 after 1/01/99?

Is it allowable to have a 500 hour, last day requirement and a provision for employment of at least one hour of the previous year? If it is allowable, are there any implications of the provision?

I am trying to find regulations regarding special rules governing pension and other benefit plans when a company is being purchased. I would appreciate if anyne could point me in the right direction. Thanks.

Are there any regulations to the number of Sick &/or Vacation days an employer is required to give it's employees? Is there a difference based on the number of employees in the company?

As Dave Baker has noted elsewhere on this site, BenefitsLink and Calhoun Law Group (the firm I belong to) have collaberated on an expanded Employee Benefits Library of legal research links. Members of this board may be interested to know that one of the pages in the Library deals specifically with church plans research links.

--------------------------------

Employee benefits legal resource site[Edited by CVCalhoun on 09-22-2000 at 02:23 PM]

Fiscal year is 12/31 and plan year is 6/30. They had both been 6/30 until fiscal year was changed many years ago.

Are there any compelling reasons to change the plan year?

What if an employer decides to pay bonuses to cafeteria plan participants, in amounts equal to the unspent part of their medical expense reimbursement accounts? Assuming income and FICA taxes are paid on these bonuses, and there is no written or oral promise on the part of the employer to make these bonuses in the first place or ever again, would the "use it or lose it" rule be violated?

Does the term "lookback month" refer to: The month containing the 30-year treasury bond data; or The following month in which the resulting average is published?

I am interested if anyone has any experience in setting up cafeteria plans in the construction industry where an hourly employee's work may be intermittent becuase of slow periods and layoffs. It seems that calculating salary deductions can be a sticking point for employers because insurance premiums often become due at the beginning of a month, and an employee might be laid off after the first 2 or 3 days in a month, and the employer cannot recoup the premium already paid.

Any thoughts would be greatly appreciated.

Can a rollover IRA beneficiary designation be drafted using "separate account" language leaving a percentage to a trust qualifying as a designated beneficiary (i.e., 75% to the trust) and the remainder to a charity and have the minimum distributions to the owner be calculated on the basis of the owner's and designated beneficiaries as to the 75% and on the owner's sole life expectancy as to the 25% going to the charity?

Does "Short Term" health insurance coverage qualify as "credible coverage" under the HIPAA portability definition? I have a client who has a 90 day waiting period in his new job. Rather than electing Cobra coverage, he wishes to secure 90 days of "Short Term" coverage to save money. Does this threaten his portability of credible coverage?

Has anyone upgraded from the DOS version of your administration software to the Windows or internet versions? If so, did you feeel that the cost was worth the difference in the program? in the service provided? Do you mind telling me which software and how many employees you have actually administering the plans?

I have been looking at 2, and the hardware improvements that we would have to make are incredible, forget the software expenditures. But if client service is significantly improved, or anything else, I would appreciate any input. Thanks.