Company going out of business in 60 days.

Investment company will only send all money to Trustee to handle. Can't find some EE's. Two have over $5,000 in plan. What do we do with the money for the people we can't find? After 11-1-99 there will be no Trustees and no company.

An employer has a DB plan and a New Comparability profit sharing plan. The DB plan is integrated with Social Security. The plans are not aggregated for 410(B) or 401(a)(4).

1.401(l) of the regs says that only one plan maintained by an employer may be integrated with Social Security.

I take this to mean that the New Comp plan may not imput permitted disparity in the cross testing to satisfy 401(a)(4) if the DB plan is integrated.

Am I correct?

[This message has been edited by Richard Anderson (edited 09-03-1999).]

Yes, SBJPA allows testing age to be the social security retirement age. Some plan documents will define how the test is done. If the document defines the testing age as 65 or the plan's normal retirement age, then an amendment would be required in order to use a different definition for testing age.

Regarding a qualified governmental (non-ERISA state & local) DB plan:

Most DB separate interest QDROs I've looked over have inadequate provisions for what will happen upon the death of the participant.

Is there any assumption regarding whose life (alternate payee's or participant's) is to be used as the "default" "Measuring Life"?

Note:

* Assume the QDRO either says nothing about what happens if the participant dies before or after benefits begin, states that if the participant dies before the alternate payee receives all of his or her benefit payments, the remainder the alternate payee's benefits are to be paid as a "death benefit".

* Assume the QDRO was "accepted" by the Plan's former TPA over ten years ago.

* The order is clearly a separate interest QDRO that meets all IRC QDRO requirements.

* The Plan is silent as to any treatment of QDROs except that QDROs are the exception to the Plan's anti-assignment provision.

* The Plan Administrator's written QDRO procedures are silent about what is to be done when a participant dies.

Absent any written instructions from the QDRO, the Plan document, or the Plan Administrator, is it assumed benefits follow the participant's life, or will the Plan administrator have to ask the parties to bring back an amended order every time a participant predeceases an alternate payee?

(I will contact a benefits attorney about this, but I'd like to hear some outside opinions as well--supposedly, these QDROs were reviewed years ago by attorneys and actuaries)

Also, the Plan recognizes QPSA and QJSA rights of spouses. Can a QDRO make an alternate payee the participant's (remarried at time of retirement) beneficiary without saying specifically that the alternate payee is to be treated as the participant's spouse, or that the alternate payee is assigned any subsequent spouse's right to be beneficiary?

Any opinion as to whether there is a qualification issue when an employer established an ESOP five years ago, funded the ESOP but none of the funds have been invested in employer securities.

I know that we need to send individuals HIPAA certificates when they terminate or lose coverage.

If the individual elects COBRA coverage, are we required to provide them with another certificate at the end of their COBRA coverage?

I have a client that recently, through a stock acquisition, acquired another company. The client maintains a MP plan and the employees of the acquired company ("acquired employees") began participating in the plan on September 1, 1999 (effective date of acquisition). The plan year is Jan. 1 to Dec. 31.

In determining the amount of the contribution due to the acquired employees under the plan, the client wants to use the compensation paid to that employee for the entire calendar year (which would include compensation paid to the employee from its former employer that my client acquired) rather than using compensation from the date of participation.

I understand that if an employee is employed by the same employer (or within the controlled group) for the entire plan year but only participated in the plan for a portion of the plan year, the plan can state that compensation for the entire plan year will be used rather than from the date of participation.

My thought is that you can only use the compensation actually paid by the employer (or the employer's controlled group)and that commpensation paid by the acquired company to the acquired employees prior to the date of the acquisition cannot be considered.

Any thoughts? Thanks in advance for any comments.

Please share your experience with negative or passive enrollment in a 401(k) plan? Would you recommend implementing it to others? What was employee response? Any words of wisdom? Words of caution?

This falls into the category of "can I have my cake and eat it too?"

In Natalie Choate's "Life and Death Planning for Retirement Benefits", she indicates that the IRS has allowed (PLR 8538062 6/25/85) a participant to elect NUA treatment on an ER stock distribution and then allowed them to roll the amount of the stock representing basis into an IRA. Thus, no tax was incurred on the distribution and the participant will be able to pay taxes on the NUA amount as LTCG.

Can this be right? I couldn't find the cited PLR on my RIA Pensions CD, which led me to believe that the PLR had been contradicted by later rulings. I'm guessing that the IRS wouldn't allow the participant to elect an accounting method such as FIFO on the ER stock that was different from the method the plan trustee elected for the ESOP trust.

Thanks for your help, Dan.

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

My clients are a H(65) and W (59) who each have children from a former marriage. They have one large IRA (W is participating spouse) that will be their only retirement assets. They would like proceeds to go 1/3 to his kids and 2/3 to hers. In the event of an early death, how do I provide for the surviving spouse and at the same time ensure that the deceased spouse's beneficiary choices are honored after the death of the first spouse? Is it possible to draft an addendum to the standard IRA beneficiary designation form articulating their wishes as to the ultimate distribution of the IRA proceeds or do they need to put the IRA into a qualified QTIP trust ( I would rather not do the latter as it is quite complex and expensive given the relatively small size of their estate).

MPPP has last day of plan year requirement for receiving an allocation. PYE 9/30/99. Employer wants to amend MPPP to reduce 8% contribution to 0% contribution for PYE 9/30/99. However, co-trustee (there are 4 other individual co-trustees) of plan has not been removed as he has not received 30-day notice as per plan terms. Even assuming co-trustee is removed before 9/30/99, amendment to reduce contribution from 8% to 0% will not be effective for PYE 9/30/99 as ERISA 204(h) notice will not be given not less than 15 days prior to the effective date of the amendment. Thus, employer stuck with making 8% contribution for PYE 9/30/99. Anyone see it differently?

In a split dollar life insurance plan with a collateral assignment of the policy to the employer, who owns the stock when an insurance company demutualizes? If it is the participant, can you amend the plan to provide that the employer will receive the stock?

For purposes of the minimum distribution rules, are QVECs (otherwise known as VDECs or DECs) subject to the IRA minimum distribution rules or the qualified plan minimum distribution rules? This is critical in 2 respects: the ability or inability of an active employee to defer the required beginning date to retirement and the ability of a deceased spouse to consider the QVEC as his/her own.

My research has not disclosed any answer. Under ERTA proposed regs, no deductible contributions could be made to QVECs after 70 1/2. However, for distribution purposes, the QVEC was subject to the rules of Code Section 402(suggesting it was a type of qualified plan).

This is not an academic question, so I would sincerely appreciate any thoughts anyone may have on this subject.

Final Regs. 54.4980B-6 Q&A 6

States that “each qualified beneficiary must be offered the opportunity to make an independent election to receive COBRA continuation coverage.”

In a scenario where an employee who covers his spouse only as a dependent and the employee terminates employment, can the spouse and the employee elect to be covered separately under single COBRA coverage as apposed to jointly under family coverage? Single coverage for each would be the cheapest way to obtain COBRA coverage.

Some insurers are saying they cannot elect single coverage on an individual basis, but must be covered by a family contract (or two-person contract). My contention is that they should be allowed to have single coverage, because of the above referenced Q&A 6.

Anyone have a decision on this?

2 401k prototype plans are adopted. One plan

covers non-union only. In operation it is intended that the second plan covers only union (although not an option to exclude nonunion). There are no HCE in union. If both plans provide for same salary deferral but "union only" receives match and /or profit sharing, will this pass 410(B) if the nonunion do not receive the same match or profit sharing?

Client was under the age of 55, retired from her employer. The 401k plan has before and after tax contributions. The before tax dollars and all earnings are going to an IRA. The after tax dollars can not be rolled, but what about the 10% penalty? A CPA is stating that she is subject to the penalty because she didn't retire at age 55 or any other 10% penalty exception.

Sorry...I'm not experienced enough to create hyperlinks. Here's the address:

http://wire.ap.org/APnews/center_story.htm...ID=APIS6V6PAQG0

Why is Rep. Bernie Sanders only looking at

what IBM did to its older workers.

DADE-Behring did it to its workers and

admitted giving them the Smallest amount

allowed under this Law. My Pension was cut

by about 60%.

An employee's son is diagnosed with dyslexia and dysgraphia. It was suggested by the physician/speech pathologist that her son use a laptop for school. The question is can she use this required purchase of a laptop, for her dyslexic son, towards her health care flexible spending account?

If an employee is covered elsewhere and declines coverage by employer, can the premium be reallocated? For example, could the employer use the $$'s to increase the employee's wages?