If all Plan investments are directed by participants, is there any change in the requirement to distribute the Summary Annual Report? In very small Plans, the SAR effectively discloses the key EE's account balance, and I am getting increased resistance from the key EE on doing this. Any similar reaction, any solution?

Our client is negotiating to acquire the stock of the founder's widow (90% ownership - 12M annual sales). Our client is President of the company, he was brought in after the founder's death -- after obtaining control he wishes to set up an Esop. I mentioned, that I've heard of the concept of an ESOP used on the front-end to acquire the stock. Any viability? I'm concerned as to how one would establish the same ownership % to our client through an ESOP. Thanks for the help,

Bill Carlson

Hi, a good question was posed to me today regarding HIPPA noices that I hadn't thought about. I have an employee who terminated from my company on 4/10/99. As part of a severance agreement, however, my company agreed to pick up the cost of COBRA until 10/10/99. This former employee has now requested a HIPPA notice. Shoud we use the coverage end date of 04/10/99 or 10/10/99?

Thanks in advance!

I am looking to implement within my small organization (10 ppl) a benefit which many large orgs offer -- reimbursement of child care costs for business travel. Interested in learning of policies re. this type of benefit (e.g., administration of, maximum allowances, who qualifies as child care provider for purposes of reimbursement).

I'm looking for a website that may contain historical information on Moody's Aa bond yield rates. Any suggestions?

Section 3.04 of Rev. Proc 99-23 under Notice 98-52 states that an existing 401k plan may be amended by the last day of the 2000 plan year retroactive to the first day of the 1999 plan year to satisfy the safe harbor requirements. I am trying to figure out how notification fits into this. If a plan begins on 10-1-99 with a 12-31 plan y.e., is this amendment allowable for this plan for '99? Do you see any downside for amending without meeting the notification requirements?

When a plan owns life insurance for individuals that has cash value, do you report the cash value as "other assets" on the Form 5500. I was under the assumption that you do but am being told by a plan's agent that you report the value as "$1".

I looked in the 5500 instructions and various other locations and cannot find a definite cite. Help!

Thanks,

Bob

I seem to recall that employers can prohibit employees with outstanding 401(k)loans and/or(?) who have taken hardship withdrawals from making additional elective contributions. Can anyone clarify when the elective contribution freeze can apply and where to find the legal/reg. provisions that allow employers to impose them?

We're closed on both Friday 12/31 and Monday 1/3, however, key IS personnel will be required to work over that 4-day weekend.

We've been kicking around various compensation ideas for that weekend but would like to hear how other folks are handling this situation. Both exempts and non-exempts will be working; the non-exempts are a relatively easy answer. Suggestions have ranged from comp time (how much?) to premium pay (again, how much?).

Any thoughts are appreciated.

The IRS permits/requires a plan to be amended within 9 1/2 months after a PYE in which the coverage requirements of 410(B) are failed. The retroactive amendment must permit the plan to meet the coverage and nondiscrimination requirements under 401(a)(4). If the plan is a 401(k) plan with a match and it also has a profit sharing feature, would you agree with the following conclusions:

1. The retroactive amendment will permit the previously excluded employees to share in all the features of the plan. They will receive profit sharing contributions and this will enable the P-S feature to pass coverage.

2. The employer need NOT restore salary deferrals for the employees that are included retroactively.

3. Because these retroactively included employees didn't have any salary deferrals for the year, the employer would have no matching contributions to restore.

4. Because the hourly employees are retroactively included, the ADP and ACP tests would still be performed without these hourly employees under the rule in the 401(k) regs that says you only include those eligible employees that actually had an opportunity to make salary deferrals. If this is true, it really makes the retroactive eligibility sort of a myth for the k and m portions of the plan.

Anyway, your thoughts and references are greatly appreciated.

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

Client will adopt 401(k) plan effective January 1, 2000. Client will be using the safe harbor rules as per Notice 98-52. Could client wait and submit plan for a determination letter re 401(k) as well as the safe harbor provisions closer to December 31, 2000? (This assumes the IRS would've approved safe harbor language by then.) Otherwise, client would need to get a determination letter re qualification under 401(k) and then get another one re safe harbor provisions. That would probably be the more conservative approach although, if possible, it would be easier to do it all at once. Any comments?

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

Southern User Group Meeting on Friday Nov 12,1999 in Columbia, South Carolina

8:30 - 4:00

Terry Connelly from Corbel will be doing the training.

if interested, please contact Maggi Heffernan at (770) 641-1429 for details.

This should be very helpful if you are customizing your reports for report writer.

My client has opted to terminate their DB plan in favour of their DC plan. What penalties/taxes will participants under 59 and 1/2 be subject to?

A 401(k) Plan which is subject to joint and survivor requirements provides for immediate distribution upon retirement, early retirement or disability but also provides that a participant who retires or is disabled will receive a profit sharing and match contribution at the end of the year.

If a Participant elects a distribution prior to the end of the plan year can you subsequently distribute the additional profit sharing and match for that plan year using the original spousal consent or do you have to start the process again?

My clients are looking for samples of notices sent to participants on the MRDs. Any suggestions?

If a financial service provider provides a break in fees as a result of aggregating ERISA and non-ERISA assets under management together, is that a prohibited transaction by virtue of the indirect use of ERISA plan assets to lower fees on non-ERISA assets managed? I can't seem to find any good authority here....

Does anyone have a sample participant notice announcing the adoption of the 401k safe harbor? Thanks

I'm looking for a list of broker capabilities for selecting a broker for health and welfare plans.

Can an employer reimburse employees (as a tax-free amount on their normal paycheck) for group medical insurance premiums being paid by the employee on a pre-tax basis under a Section 125 Premium Conversion Plan?

Any citations that address this question would be helpful.

Does anyone know if IRS has stated when they will begin accepting applications again for approval of prototype plans? IRS Announcement 99-50 stated that effective May 10, 1999 they will no longer accept applications but I do not know if they have begun accepting applications again.

Thanks