Has there ever been any litigation that has compelled a DB plan to convert to a DC plan?

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Client has already begun minimum required distributions and dies. His surviving spouse (the designated beneficiary) will elect to treat the IRA as her own. She is also past age 70.5, and will begin minimum required distributions in the year after death. Question: Must a minimum required distribution be made in the year of death using the decedent's method?

Has there ever been any litigation to compel a DB to DC conversion?

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Has there ever been any litigation to compel a DB plan to convert to a DC plan?

Employee advises employer of legal separation with spouse and drops him/her as dependent. A few months later, the dropped spouse notifies the employer that there was no legal separation and that he/she should not have been dropped. To what extent does the plan administrator have a right to rely on the employee's representation in connection with a change in family status? In the joint and survivor annuity area, ERISA provides that if the fiduciary was prudent in relying on participant representation of no spouse, there is no liability. Here, there is no duty of spousal consent, so there would appear to be no specific duty to investigate the participant's claim. Any thoughts?

An employee terminated employment with a qualified 403(B) entity and received a taxable distribution from the 403(B) plan. About 5 years later the employee has been reemployed by the same 403(B) entity. In calculating the maximum limitations do we take into consideration those years which the employer worked for the entity, even though the previous 403(B) account had been cashed out? That is, do we include those prior years in his Years of Service? Do we include his previous benefits in the calculations event though they are no longer in the plan?

We have university looking to terminate their overfunded defined benefit plan and take back the excess assets. The school is concerned with reversion penalty, 50% if no benefit improvement or 20% if some of the excess provides additional benefits. It was my understanding that these taxes did not apply to not for profit organizations unless there had been some tax advantage in the past, such as reducing unrelated business income tax by pension contributions as a business expense. I'm looking for any information, references that would tell me it's ok to do this reversion and not worry about the reversion penalty. If there is a problem, I need to know that as well obviously.

The IRS issued a news release dated 10/14/99 indicating that the deadline to recharacterize 1998 Roth IRA contributions or conversions to Traditional IRA's until the end of the year. The IRS also is sending letters to taxpayers who appear to be ineligible to convert in 1998.

What a great relief to taxpayers who were confused by all the rules for conversions/contributions to Roth IRA's. At least this time, the IRS is looking out for the taxpayers.

A plan miscalculated the MRD for 1998 and sends the participant a "make up" distribution in 1999 along with the "regular" MRD for 1999. Particpant is seeking waiver of the excise tax for the underpayment in 1998. Should the "make up" MRD be reported on an amended 1099 for 1998 or should both the make up and regular MRD be reported on a 1999 1099.

I have a situation where the owner of a U.S. company (permanent resident status) is separated and in the process of divorcing his wife who left him by going back to Germany with their children. He is staying here and the wife and children will be in Germany where the wife is a citizen.

Could the soon to be ex-wife be taken off the health plans now and at the time of official divorce/separation then put her back on due to the qualifying event if the courts so order?

There is also the issue of a domestic insurer covering a non-U.S. citizen living in Germany, e.g. claims paid from a German doctor. To my understanding, the insurer won't cover dependents living outside of the U.S.

A self-employed client of mine made a SEP contribution for 1997 in April 1998 based on what we thought was his 1997 self-employment income. In the middle of 1999 (yes, 1999), he received a 1997 K-1 from new partnership which reported a net self-employment loss. This new information has many ramifications; the one I'm most concerned about is that it means that his 1997 SEP contribution was overstated by roughly $4,700. Is there any way to characterize that amount as a 1998 contribution? Or are we forced to comply with the excess contribution/excise tax rules?

Does anyone have experience with 457(f) ineligible plans for officers of credit unions in which assets are set aside in a supplemental retirement account on the books of and held by the credit union (i.e., no grantor trust or insurance or annuity vehicle) and invested in mutual funds? The main issue is whether such investment, which would normally not be permitted as a credit union investment, is permissable as an investment because it relates to the credit union functioning as an employer providing retirement plan benefits to employees. I am aware of a few NCUA letters on this, but am looking for practical experience, e.g., how common is it to fund the plans internally, are there likely to be audit/examiner inquiries, accounting treatment, etc.

415f says to combine muliple db plans of same sponsor for 415b purposes. Once the 415b limit is obtained, how is the split among the plans determined?

We have a 9/1 PY "Doctor" plan that is going to terminate soon. There may be lingering 415(e) issues, although the prior (retired) actuary indicated that the 87-21 adjustment wiped out the dc fraction.

Would it be a good idea to run a short PY ending 12/31/99, and then term 1/3/00? Wouldn't this be like an insurance policy on 415(e), since it no longer would apply?

Any ideas w/b appreciated!

Thx

David Lipkin

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A pension equity plan has distribution options in the form of either a lump sum, an immediate annuity or a deferred annuity. Sponsor would like to provide alternate beneficiaries for the joint and survivor annuities with appropriate waivers by spouse. Any good references for issues that arise in this proposal?

If a profit sharing plan is taken over in a transaction and the new company does not plan to make contributions but has tactical reasons to keep the plan going for some period of time (ie, 3 years) and then the new company plans to terminate the plan- can the company wait until after the 3 years have past to vest the participants, or is immediate vesting required?

Employer wants to limit cash benefit available to employee who has medical coverage through a spouse's employer's plan. If monthly budget is $150, and cost of individual group medical coverage is $100, plan would give $50 to employee who selects the coverage, but only a percentage of the cash benefit that would otherwise be available to the employee who foregoes coverage because he/she is covered under a spouse's plan.

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If a distribution is less than $200, but the plan administrator chooses to allow it to be an "eligible rollover distribution," then 1) does mandatory withholding apply and 2) is a 402(f) Special Tax Notice required? It appears to me that 31.3405©-1 says that mandatory withholding would not apply, but that the notice (with any inapplicable language removed) would still be required. Am I correct?

What is considered "best practice" methodology for adjusting original employment date for reemployed individuals for purposes of vacation entitlements, etc. NOT qualified benefit plan service?

If an employer with a 401(k) plan with a discretionary match decides to make no matching contributions in 1999, does that mean the allowable HCE match limit for 2000 is zero? Any known exceptions to this?

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