I re-read an article in the Wall Street Journal dated March 18,1999. The article stated that a number of investment companies, including TIAA-CREF, are telling their clients that the surviving NON-SPOUSE beneficiaries can continue the distribution schedule based on the original owners life and are NOT required to be taxed on the full distribution immediately (or over 5 years). Is this true? Is this the same for 401(k) distributions? (The articel seems to say it is.)

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My husband died on May 27,1999, He has a pension plan in which he named his 2 adult children from a previous marriage as the beneficiaries. This was done before we were married. He died at a young age and did not get around to changing the beneficiary to me. What are my rights in this case? He did tell me that since I was his spouse that his pension would automatically go to me if something were to happen to him.

My firm is getting ready to offer Hedge Funds to the clients in our trust division. Does anyone have any input as to potential problems/situations I should keep an eye out for with these as investments in IRAs? I can't find anything, but these appear to be a subject of great debate on other levels, which is why I would like some input.

What's happening with the legislation that affects the "same desk rule?"

IRC Section 412 clearly states it applies to 401(a) and 403(a) plans, appearing to exclude TSAs from coverage. The TSA Answer Book says they are subject to the rules.Per a discussion with Rosamund Ferber, Senior Tax Law Specialist, IRS, they may be subject under Title I of ERISA. I have review Title I, and honestly can't find a clear cut answer one way or the other. Can someone steer me in the right direction?

A full time employee was hired 6/1/98 at a payrate of $10,000 per month ($120,000 per year).

The 401k plan is a calendar year plan year, with a 1 year waiting period, and entry dates of July 1 and January 1.

Our employee becomes eligible for the plan on 7/1/99.

In performing the ADP (and ACP) tests for 1999, is he an HCE?

(Note that his 1998 earnings for the part of the year that he worked was $70,000 and his 1999 earnings was $120,000.)

Case 1: The plan is not using the look-back rule.

Here, since his 1999 pay was $120,000, I believe that he is an HCE for 1999. Is this correct?

Case 2: The plan is using the look-back rule.

Here, I believe he is not an HCE for 1998, but is an HCE for 1999. However, he does enter the ADP test for 1999 as an HCE. Is this correct?

Thanks.

A client is starting a safe harbor 401(k) (new plan) effective July 1 with the 3% non-elective option. They do not want to contribute the 3% for the period jan1-June 30. Am I right to assume that there needs to be a short plan year of 7/1 - 12/31 for 1999 to do the safe harbor ? Will this reduce the $10,000 401k deferral limit to $5,000?

thanks-jf

Does anyone know if you can print reports in Quantech and sort by Division ? I set up 5 divisions in the employer screen, then gave each employee a division code in the census. I want to print a report of contributions and eligibility by division. Any hints ? As a follow up to this question, when using the data collection routine to input 401(k) contributions, can I have the input come up by Division ?

Any help appreciated -- JF

I'd be interested in hearing from others who have faced this issue in employee benefits education/communication-- what worked, what didn't, any advice, etc. I am a free-lance writer with the assignment of informing active employees and terminated vested employees about changes in lump sum distributions in terms of the discount rate and the change in mortality tables. This is a complicated subject which usually makes people's eyes glaze over.

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Susan

Does the rule that the IRS can deem your plan terminated if you fail to make a contribution in 3 out of the last 5 years apply to 401(k) plans? We have a client whose plan has not had any type of contribution (deferral or employer) in the last 4-5 years. Should the plan be deemed terminated and assets disbursed?

Does anyone have any good internet addresses, suggested articles or other resources so that I can analyze whether an employer with an overfunded pension plan should consider offering retiree health care?

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Charlie Stevens

Michael Best & Friedrich LLP

QMSCO requires employee's ex-husband to cover employee's son under his medical plan. Ex loses coverage due termination & apparently did not have access to COBRA. Employee elects to cover son under medical/flex plan. Ex-husband regains coverage with a new employer, and employee wants to make mid-year cafeteria plan change to drop son's coverage. Would this be permitted under the "catch-all" provision under existing proposed regs (1.125-2, Q&A-6©, or under new temporary regulations re: allowing changes consistent with QMCSOs and other family court orders Temp. Treas. Reg. Sec. 1.125-4T(d)?

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I have a few basic questions regarding converting to a Roth IRA

-Left one company with a 401K to work in a family-run business with no retirement plans. Want to convert to Roth IRA but the company my 401K money is with does not offer Roth's just traditional. Any recommendations (local banks, big firms?)to put this money?

-Have more than 2,000 already in 401K. Once I convert, can I then start contributing a full 2,000 that year?

-The money I converted-Can that ever be withdrawn early?

Thanks for the help.

Amy

If a plan sponsor using a nonstandardized regional prototype restates on to a standardized regional prototype (current restatement date), is it necessary to file for an approval letter? Will this be sufficient for the GUST amendments in 2000 (current prototype not updated for GUST yet) when the final prototypes are available due to the retroactivity involved?

MY EMPLOYER SENDS IN MONEY TO MY SARSEP ONLY SPORADICALLY, AND WHEN I TRY TO RECONCILE MY NUMBERS (DEDUCTIONS) AGAINST THEIRS (ACTUAL CONTRIBUTIONS) THEY ALL RUN FROM THE LIGHT LIKE A BUNCH OF COCKROACHES. BASICALLY, MY EMPLOYER HAS TOLD ME, ANY LOYAL EMPLOYEE WOULD BE WILLING TO "LEND" THE COMPANY MONEY IN ORDER TO ENSURE ITS FINANCIAL HEALTH. I, FOR MY PART, HAVING NOT BEEN ASKED TO BE A "LENDER", CONSIDER THIS MISAPPROPRIATION TO BE THEFT. AS IT STANDS, MY EMPLOYER KNOWS I AM SO FAR BEHIND IN UNPURCHASED SHARES THAT I DON'T DARE LEAVE AND THAT IF I COMPLAIN THEY WILL HAVE A LABOR LAWYER (ALREADY SHADOWING ME)ON MY CASE IN NO TIME FLAT....SO, THE BOTTOM LINE: HOW LONG IS THE ESCROW PERIOD, ANYWAY? CAN THEY HOLD MY MONEY FOR A MONTH, TWO MONTHS, HALF A YEAR, HOW LONG? AM I ON THE SHORT END OF THIS, AND MAY AS WELL KISS MY MONEY GOODBY?

[This message has been edited by Kronenberg (edited 07-09-99).]

Can a 403(b) tax shelter annunity be included in a salary reduction Sec 125 cafeteria plan avoiding social security tax on the employee TSA contribution.

An underfunded defined benefit plan is sponsored by a company that is in Chapter 11 bankruptcy proceedings. The PBGC is proceeding to have the plan terminated and to have the PBGC appointed as trustee. The PBGC has requested the bankrupt employer to sign an agreement to the termination of the plan and to the appointment of the PBGC as trustee. This agreement was drafted by the PBGC.

The company agrees that the plan should be terminated. However, the company would like to negotiate the scope of its responsibility and liability with respect to the plan after the PBGC has been appointed as trustee. Does anyone have any experience they can share about negotiating with the PBGC with respect to the terms of such an agreement? What are the issues we should be concerned about? Thanks for your responses.

We are trying to find the IRS Cite for the Uniform Coverage Rule pertaining to Health Care Spending Accounts. Specifically, we want to find the Code Section where it indicates that an employee has the right to claim up to the annual contribution in expense reimbursement at any time during a year and that the employer may not deduct any amounts which had not been contributed at the time of termination, if it occurs prior to the end of the year.