I invite all to view my handiwork at the 401(k) message board under topics: transfer/rollovers and transfers/roloversII. jlf

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An individual has a Marital Settlement Agreement under Wisconsin law. Under the agreement, the individual is awarded all rights and interests in the IRA. The parties agreed to waive, renounce and give up all rights, title and interest in the property awarded to the other. Each party has right to disposes of property as though never married. Individual does not change the beneficiary under the IRA, i.e., the ex-spouse is still the named beneficiary. The individual now dies. Is the ex-spouse the beneficiary of the IRA?

I have a client that wants to handle large influxes of business by entering into an agreement with a temp agency to use the temp's employees until the the influx has been handled and to thereafter no longer use the temp employees. The influxes are sporadic and the temps are needed for varying periods of time. When the temps are working for the client, the client has full control over what the temp does each day and what hours the temp works.

The client wants to amend its 401(k) plan to exclude these temps from participation.

I understand the IRS Field Directive which states that part-time/seasonal employees cannot be excluded if they achieve 1,000 hours. Could these individuals potentially be excluded for the following reasons: First, an argument could be made that they are really the employees of the temp agency. I know that there are many factors that go into making a determination of whether an individual is an employee and that there are no clear answers. I also understand that you should do your best to make the individuals employees of the temp agency (e.g., have an agreement that states the agency is the employer, responsible for benefits, hiring, firing, etc). Second, even if they are the client's employees, could they be excluded as a reasonable classification without violating Section 410(a) (as explained in the Field Directive), the argument being that you are not excluding them because of their length of service, but rather because you only needed them for a particular influx of work or project?

I am uncomfortable with excluding them. However, I would like to know what others are doing with this situation. The client feels strongly about excluding them because they tend not to defer into the 401(k) which hurts its 401(k) and (m) testing.

I assume that this is a very common situation. I just wanted to see what other companies are doing and how typical is it to exclude these types of individuals.

We have a potential new client who has an existing simplied 401(k) plan. It was effective 1/1/98. The client would like to tack on a new comp (cross tested) ps feature for the '99 year. The existing document is not ours but it appears to say the maximum ps disparity rate is 2.7%. Is this standard? Any problems regarding testing in setting up a stand alone new comp plan? Has anyone set up a simple 401(k) with the new comp feature within one doc? Any suggestions would be appreciated.

We have received a request from an employee for reimbursement of 1993 tuition expenses. What are the tax and/or administrative issues that we should be considering in deciding whether or not to grant this request?

As I have done for the past several semesters, I will be offering a 2 day review class for the C2DB exam in Jacksonville, Florida. Class will be held from 8:30 am - 4:30 pm on Saturday November 6 & Sunday November 7. Cost per student is $400.

Contact me at ldorsa@lda-fcpa.com or 904 249-9171 for more info.

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What are the rules in deducting plan admin fees directly from plan particpants accounts? A client previously paid the fees directly to the TPA but recently switched investments to an insurance company in which the insurance company offered to deduct the fees directly from the accounts.

The loan program requires a $50 fee to be paid by the particpant when requesting a loan. Can this fee be deducted from the particpants account (using pre-tax dollars)?Should the particpant pay for it separately? Can the administrator withhold the charge from the loan proceeds check?

Have you seen my message as posted in the 401(k) message board on 8-27-99 under topic: transfer/rollovers?

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Have you seen my handiwork of 8-27-99 posted on the 401(k)message board under topic: "transfers/rollovers"?

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Can a fairly new plan on a volume submitter document, assuming the plan was effective 1-1-98, request and receive a determination letter for pre-1999 law, and NOT pay the rate for customized plan document review? In other words, can a determination letter be issued for pre-Gatt sufficiency that would be based on parameters as defined in an adoption agreement? Our motivation: We could request via written letter that the determination be made as such for pre-Gatt, and feel that it is important that the plan have a determination letter, as it is a sizable 401(k) plan. It is difficult to justify the expense of submitting as customized document.

Realized capital losses cannot be passed through to the beneficiary(ies) until the final year of a trust. For a Marital trust (Trust A with a QTIP election) does it make sense to recognize losses for tax purposes? Will accumulated realized losses be passed through to the spouse's final return (and be limited to $3,000) or will the accumulated losses be passed through to the heirs of the spouse?

Is a corrective distribution of excess deferrals made after April 15 subject to 10% penalty tax?

Can someone recommend a group that would audit medical claims on a commission basis as opposed to being paid up front? Please call me at 212-833-6189 or e-mail me at sharon_lovy@loewscpx.com

Thanks.

I have an employee who is a 24 year old, hourly employee. His residence is with his mother, who is a 7% stockholder in our company. The stockholder is salaried, making less than $80k each year, and does not defer salary to the plan. Since family aggregation no longer applies in this case, is it possible that family attribution might in determining whether the 24 year old is an HCE? Any help is greatly appreciated.

I am an actuary terminating a DB plan of a county-owned hospital. The assets do not appear to be sufficient to pay the lump sum value on the definition of actuarial equivalent currently in the plan (pre-GATT, PBGC basis). In addition, the assets may not be sufficient even using the GATT basis (say about 6% interest rate).

It has been proposed that the plan be amended to adopt the GATT mortality table and whatever interest rate that will make the plan sufficient.

Anyone seen this? Do you believe that it is permissible under the IRC, since the plan is exempt from IRC 411 and 417? If so, might there be any concern that state laws could come into this gap (that is, the 411 and 417 exemption)?

My perspective is that the plan could be amended to do this. However, the terms of the document contain "vanilla" language about "no amendment will reduce the vested benefit of a participant determined as of the later of the date such amendment is adopted, or the date such amendment becomes effective". This causes me to be concerned that the proposed action may be OK under the IRC but violate the plan itself.

Any other advice?

Thanks

I would like to set up a health fair for our employees, but am not sure of what vendors, activities, displays, etc. that I should have. Has anyone ever coordinated an on-site health fair? I would love to hear the details. THANKS!

Company B maintains an ESOP. Company A buys company B, including the stock in the ESOP for all cash. What is the obligation of Trustee of company B's ESOP to purchase stock of company A? Can the ESOP be terminated and only cash be distributed to participants notwithstanding the fact the ESOP refers to stock distributions? After the sale, can the ESOP be amended to eliminate the stock distribution option and just provide for cash distributions?

One of my doctor clients recently sent me an article touting the use of CICs as nonqualified deferred compensation plans. Apparently, these which allow the employer to take a current deduction for malpractice insurance premiums paid to an off-shore insurer owned by the doctor. The assets accumulate tax -free until the doc retires and then liquidates the insurer at captal gains rates. The arrangement is als being touted as an asset protection device. The only info I can find on CICs has been published by the touts. Does anybody have any experience with these things?

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Can someone guide me in the process of choosing one investment consultant from our current two with regards to interview questions? Or any other insights? Thanks...