Under Notice 88-53, Q & A 11, employer securities in excess of the minimum amount required under Section 401(a)(28) cannot be diversified to the extent the securities may not be distributed under Section 409(d). However, I frequently see ESOP documents drafted to allow "excess" diversification, e.g. 100% divesification at age 55, even though Section 409(d) provides that the securities must be held in the participant's account 84 months from the date of allocation to the account.

The only explanation I have been able to develop is that Section 409(d) may only apply to the old TRASOPS and PAYSOPS and not to ESOPS. Does anyone else have an explanation for the apparent disregard of Section 409(d)?

I know that most TPAs store documents for seven years. Is this statutory or an industry standard??

Have a 401(k) plan with a plan year of 8/1/1999 through 7/31/2000. One participant (the owner) is able to defer 6.25% out of first paycheck of the plan year (August 1999) and reach the $10,000 maximum deferral. When is the next time that this participant can defer into the plan. Is it after January 1, 2000 since this begins a new tax year for the participant or is it the next plan year?

If it is as of January 1st, and the maximum amount that can be deferred is increased, then what limit should be used (1999 or 2000) for the "second" deferral into the plan? Also, is there anything I should be aware of when doing plan testing?

Your assistance is appreciated and any cite(s) would be helpful.

Say an employer has two plans and a participant is in both plans. His balance in plan I is 2000.00 and his balance in plan II is 4000.00. Can he be distributed under the involuntary cashout rule in both plans or do the balances has to be aggregated (equaling 6000). (Say both plans allow involuntary cashouts for account balances less than 5000.00) Any regulations you have would help. Thanks.

Do we need to show the total share value (released and suspense) and the outstanding loan principal as assets on the 5500C/R? We put the shares is Corp. debt and the loan as a liability. The market value of the released shares is net asset. Is this the way it should be shown, or do we only put the market value of released shares?

How long can an alternate payee (AP) leave her share of a participant's account in a plan (presume a MPP Plan/PSP arrangement). The participant is a non-5% owner and has reached NRA and may begin drawing on his benefits while still employed. The AP wants to leave her share of his benefits in the plan longer. Can she postpone distributions until the participant would be required to take distributions under 401(a)(9)? Or must she begin receiving distributions when he does? Is the answer different if she (a) does not have segregated accounts under the plans or (B) does have segregated accounts?

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A Profit sharing plan (w/401k provision) is written such that if a person exceeds the 415 limit, then 401(k) deferrals are returned 1st.

If the deferrals are returned 2 1/2 months after plan year end, is IRS Form 5330 needed? (as in the case of a failed k test) Or do we just return the deferrals and that's that?

thanks

A participant is 55 with 10 years of service and wished to diversify. Plan allows in-service distribution as an option for diversification. Is this participant subject to the 10% penalty for early withdrawal?

In October 1997 we switched from sick leave and vacation leave to Paid Time Off. Employees sick leave balances were grandfathered. Employees are allowed to use Grandfathered sick leave after 5 consecutive day of personal illness or injury. Sick Leave is no longer accrued.

PTO is accrued each pay period with carry over to the maximum allowable carryover. Once an employee meets the maximum carryover they stop accruing PTO until PTO is used. Since 1997 we are having a significant number of employees hitting their maximum on PTO and are no longer accruing PTO leave.

We are trying to address this situation so employees are not penalized for not taking Paid time off. Company executives are not willing to raise the maximum. Any suggestions?

Does anyone have any thoughts on whether a plan can permit employees normally scheduled to work 1,000 hours in a year to become eligible after 30-60 days of employment, but require those who are not regularly scheduled to work at least 1,000 hours to actually complete 1,000 hours? I have recently come across these situations in a couple of plans where clients want to do this. Any views on this issue would be sincerely appreciated.

watch out for the chapter on permitted disparity. there are a few typos.

in the practicle example, they say plan year is 1998, but the rest of the example is based on 1997 wage base.

Roman Numeral III '5.7' was left out of 2. a.

the wage base on page xxx for 1999 says 72,400 and should be 72,600.

I have a client who recently passed away. He had begun taking distributions from his IRA before he died. His two children are the beneficiaries. (wife is deceased) What options do the children have for receiving the IRA assets? Can they continue to receive the money over the "projected" lifetime of their deceased father or must they take it over a short period, i.e. 5 years or less?

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i am researching inflation linked pensions, and would appreciate any references to material on the internet as well as hardcopy.

i'm interested in the actuarial modelling, use of derivative based instruments to match the liabilities, existence of inflation linked bonds/fixed interest securities, as well as existing products.

thanx in anticipation of a flood of help.

Has anybody had any experience where a participant contributed after-tax voluntary contributions (before 1986) but did not keep records as to his basis. The Employer has not been able to locate the reports during that period.

The original recordkeeper exists under another name and records have not been able to be located.

Since you can't rollover the voluntary - how do you determine for tax purposes?

Any thoughts?

Is a VEBA a part of a plan?

Here's the situation: Under a collective bargaining agreement, a company was required to set up a VEBA to fund certain welfare plans for union employees. The collective bargaining agreement has been superseded by a new agreement, which no longer contains a specific requirement to maintain a VEBA, but which requires the company to keep the welfare plans which the VEBA has funded in place. The company would like to terminate the VEBA, but if the VEBA has become a part of the welfare plans, it can't.

Any thoughts?

Should we include 401(k) and 401(m) excess deferrals and match do to failure of the ADP/ACP tests in the Average Benefit Percentage Test for 401(a)(4)?

Has anyone ever researched whether dividends received from a KSOP (through a pass-through provision) are rolloverable? A plan does not allow a participant to not accept passed through dividend once employment has terminated. Every quarter, a check comes, which of course, destroys the benefits of tax deferred compounding. Any insight would be appreciated.

Has anyone ever researched whether dividends received from a KSOP (through a pass-through provision) are rolloverable? A plan does not allow a participant to not accept passed through dividend once employment has terminated. Every quarter, a check comes, which of course, destroys the benefits of tax deferred compounding. Any insight would be appreciated.

Background:

My company has a tuition reimbursement plan mentioned in an old Employee Handbook dated 2/98. Note, I did sign the handbook after I started work. The handbook says: "Employees utilizing this benefit (Tuition Reimbursement) will be required to sign a Tuition Reimbursement Agreement which will include a Recovery Clause stipulating that in the event that the employee voluntarily terminates employment within one year of course completion, the employee will reimburse the Company for paid Tuition Reimbursement." The Tuition Reimbursement Agreement that they gave me to sign states that I have to stay two years or I have to pay back the money. I must pay 100% if less than one year, and 50% if over one year, but less than two years. The agreement, if I sign it, says they can deduct from my paycheck the owed amount even if I'm terminated due to poor performance. It does not state anything about layoff, which would seem to me that it would be up to them to do what ever they want.

1) Is it legal to tie tuition reimbursement

to employment duration? (i.e. if you leave,

are terminated, or are laid off then must

pay back percentage upto 100%)

2) What does it mean when policies are added/changed/deleted in new employee handbooks? If I don't sign new versions of the handbook, what does that mean?

3) The Tuition agreement says that it is "in no way a contract of employment" yada yada yada. The handbook states this also. Why do they think they need to state this?

Thanks

steve

If you have loaded 5.0, please check Corbel's web site and download the service pack of fixes. Brand new as of the other day.

One current known problem (not fixed yet)

is a vesting problem. It doesn't effect a lot of plans, but in some plans all employees show as 0 vested in profit sharing or match.

reposting eligibility solves the problem.

the folks at Quantechland are working on it, but I figure that is a serious enough problem to watch out for.