A U. S. corporation has a number of employees who are nonresident aliens from Mexico. Must the employer withhold the mandatory 20% on "eligible rollover distributions" made to these employees? Article 19 of the tax treaty between Mexico and the U.S. (which can be found at 1994-2 C.B. 489 or 1994-34 I.R.B. 1)seems to say that such payments are exempt from U.S. tax, i.e., no withholding. Does anyone have any comments or suggestions?? Thanks in advance...

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

I am helping form a Consortium dedicated to the development of standardized XML vocabularies for HR transactions and data interchange. The vision is that standardized XML-based message formats for transactions will enable a new generation of open, "e-business" model software and services. See http://www.hr-xml.org for more information.

Much of the Consortium's initial efforts have focused on recruiting and staffing transactions. I believe we have a clear vision and direction in that area. There also has been significant interest in XML vocabularies for employee benefit transactions -- e.g., plan enrollment, status changes, option changes, etc.

The Consortium is actively seeking thought leaders in the employee benefits field to help us develop the XML vocabularies to enable a next generation of open, e-business model employee benefits services.

If you are interested in learning more about the Consortium or participating in its standards-setting activities, please contact me.

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

Best Regards,

Chuck Allen

Consultant, Structured Methods

http://www.structuredmethods.com

tel. 1-919-247-6881

Coordinator, HR-XML Consortium

http://www.hr-xml.org

chucka@hr-xml.org

I terminated employment on 8-4-99, the Plan Administrator passed out the Individual Benifit Statements to all the employees, but he is holding onto mine and did not mail it to me. Secondly since I worked for 7 months in 1999 am I supposed to get another Statement in the year 2000? Also when I was first eligible for the ESOP plan back in 1986 the Plan number was 002, in on May 15th 1995 a new Summary Plan Description was issued to all employees. The Plan number for that one was 001, does this mean anything to the fact that there are 2 Plans and none of the employees were informed?

Facts: Decedent is unmarried, has an ERISA Plan and an IRA.

Query: It appears that, pursuant to the terms of Prop Reg 401(a)(9)-1 D(4) and Decedent's death beneficiary designation, Decedent's ERISA plan may designate Decedent's more flexible IRA such that the death beneficiary designations for the IRA apply. Where ERISA Plans are often inflexible as to "stretchouts" and numerous plans involve numerous default provisions if the death beneficiary instruction is not specific, and where no distributions need be income taxable prior to the minimum distribution rule requirements of 401(a)(9), this planning would appear to allow we planners to consolidate the entire process through one IRA Plan with appropriate defaults. The IRA is an irrevocable trust created by Decedent with identifiable living beneficiaries, assuming no charitable or estate beneficiary. A copy of the trust can be provided to the ERISA Plan Administrator. Has anyone considered this or seen any rulings or instructions on this?

The following might be an ERISA Plan death beneficiary instruction: "to the death beneficiaries x,y,and z in equal shares, under the terms of Article XX of Decedent's Living Trust, to be held in the plan and distributed as the Trustee directs, and if the assets of the plan may not be held and distributed pursuant to minimum distribution rules of Prop. Reg. 401(a)(9), then to the Trustee of Decedent's IRA acct. # ______". Any IRS authority on this? Again, the IRA is a trust for the benefit of living persons. Any reason such a distribution violates IRS policy or rules?

Is early termination of COBRA permissible where a business terminates all group health plans, but where the business owner obtainsan individual health policy for himself, only?

In this case business owner is trying to deprive ex-wife of COBRA rights. Would like authority that his individual policy is a 'successor plan,' or similar authority creating obligation to continue ex-wife's coverage.

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

With the IRS and Social Security just having announced the new year 2000 limits on everything from section 403(B) plans to the Social Security wage base, here's a handy chart showing the limits from 1996 through 2000.

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

Employee benefits legal resource site

With the IRS and Social Security just having announced the new year 2000 limits on everything from section 403(B) plans to the Social Security wage base, here's a handy chart showing the limits from 1996 through 2000.

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

Employee benefits legal resource site

I have a client that maintains a leveraged ESOP. February 2000, the ESOP loaa will be completely repaid. At that point, the client wants to convert the ESOP to either a profit sharing plan or a money purchase plan. My understanding is that this conversion can happen without fully vesting all participants (and, obviously, no cut-backs under 411(d)(6) can occur). However, I am not sure what happens with the stock that has been allocated to participants' accounts. Is it possible to (or required), upon the conversion, replace the stock in each participant's account with cash (assuming an accurate valuation)? If they can't replace the stock with cash (which may not be financially feasible anyway), then

I assume the stock remains in the accounts and no further stock is allocated or contributed by the client. What are our options?

Another issue - an ESOP has to be designed to invest "primarily in employer securities". What minimum percentage of trust assets would need to be invested in employer securities to meet this rule?

Hi,

Does anybody have a protocol for dealing with COBRA employees who have their checks returned when we try to deposit them? Thanks in advance!

Waaaay back in the dark ages, I recall sending HIPAA notices to our staff and setting up a system to provide HIPAA certificates. Then we outsourced and I stopped paying as close attention as I should have.

Now I have a new job and I'm getting all their compliance issues settled. I can't recall if there is a requirement to communicate HIPPA information to our new hires (similar to the initial COBRA notices). Any help?

Thanks,

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

Steve Moss

Benefits Administrator

Can anyone shed any light on the subject of getting 401(k) contributions for unused vacation days. I have a few clients who are interested. An article about this topic first appeared in the Wall St. Journal back in late 1996/early 1997. A company had put this provision in their plan. They received a private letter ruling on it though, which as I understand, does not give other plan sponsors the green light to install this provision. Have there been any recent developments?

Can a state governmental DC plan (established pursuant to 401(a)) receive eligible rollover or plan-to-plan transfers of lump-sum distributions from participants of another eligible retirement plan (either a governmental plan or a nongovernmental plan)? I know that private plans can receive rollovers (if the written plan document allows for it), but am completely unsure if state plans can.

Thank you for your help!

What are the tax consequences of gifting Sec 1042 replacement stock to charity? Does the donor get the full deduction for the current FMV? Any requirement to pick up income?

Has anyone ever received a request to accept a rollover for a terminated participant's PRIOR employer's plan? Adoption agreement is pleasantly vague - says Admin Committee has sole discretion in determining whether to accept rollovers (they currently accept r/o's from any employee - did I just answer my own question?). I can't imagine that would be required but I wanted to run it by this gang of experts!

Can a state governmental DC plan (established pursuant to 401(a)) receive eligible rollover or plan-to-plan transfers of lump-sum distributions from participants of another eligible retirement plan (either a governmental plan or a nongovernmental plan)? I know that private plans can receive rollovers (if the written plan document allows for it), but am completely unsure if state plans can.

Thank you for your help!!!!

Can a state governmental DC plan (established pursuant to 401(a)) receive eligible rollover or plan-to-plan transfers of lump-sum distributions from participants of another eligible retirement plan (either a governmental plan or a nongovernmental plan)? I know that private plans can receive rollovers (if the written plan document allows for it), but am completely unsure if state plans can.

Thank you for your help!

Can a 401(k) profit sharing plan be terminated retroactively? If so, are there any limitations on when termination amendment must be adopted (such as by 2 1/2 months after end of plan year)?

I have several questions regarding completing the 5310 for a profit sharing 401(k) plan termination. The plan terminated and the sponsoring employer was sold during 1998. Account balances have not been paid out yet.

1. Should the "current year" on lines 13b and 16 be 1999(now) or 1998 (the year plan was terminated and company was sold)?

2. On line 9d, should the "last contribution to the plan" take into account 401(k) deferrals and/or match, or just profit sharing contributions?

3. On line 16a, should "Employer contributions" take into account 401(k) deferrals and/or match, or just profit sharing contributions?

4. On line 13b, since business was sold during 1998, should line 13b(5) be 0 for Number at end of plan year?

5. Participants terminated during 1995 with less than 100% vesting, but their balances have not yet been paid out. They were made 100% vested when the plan terminated. Should these participants be counted on line 13b(6) and an attachment done, or can line 13(B)(6) be 0 for 1995 since they were made 100% vested on plan termination?

Help with any or all of the above would be much appreciated. Thanks.

I have a situation in which an employee has passed on. Her beneficiaries were her three daughters, one of which is in prison. I sent out termination paperwork to them. However, I received a note from the sister in prison stating that she would like the check to be made out and sent to one of her sisters. As I understand it, she is waiving her rights as a beneficiary and putting her trust in her sister to send the monies to her. My question is if the small note is sufficient to waive her rights? Is a more legal document required?

I'm a college student who recently started my Roth IRA. I'm wondering about is my ability to trade within the IRA. Can I trade the stocks i buy, or do i have to sit on them till I retire? I'm just confused, and wondering if I sell and use the money for another purchase in my IRA, will I have to pay taxes on the profits? Or is the the real advantage, where I can make 1000 bucks a year on good trades and not have to pay taxes? Any info would be helpful, thanks.