Recently picked up a client who is an ASG that was never identified. Four members of the ASG sponsor qualified plans, the fifth sponsors a SEP. The qualified plan sponsors are submitting to CAP to resolve their issues, is there any relief available for the SEP sponsor? The CAP issues are documents, and 401(a)26 violations for pre 97 years. The employees have always received greater benefits that the sponsors so there aren't any benefit issues. Any ideas?

Are employers liable to offer benefits to a temporary, contract worker for a position of approx 4 months duration? They are not represented by any agency and will be filling out a W-4 and I-9 form. They will be working 40 hour weeks for approx 16 weeks. I was told we have to offer the same benefits as fulltime employes even though this person will only be working for us for 4 months on contract. Any documents out there outlining our responsibilities if any?

we recently purchased 20 plans from a tpa that had their own document and found a few discrepancies.

1. Their standardized prototype required at least 500 hours for ALL participants to receive an employer contribution, even those NOT terminated. My understanding is those employed on last day, regardless of hours, must receive a contribution (for plans using a standardized document).

2. The document does not state procedure to use to pass 410b should it be failing. Again, is this not a required provision for a non-standardized prototype? It appears they would "amend" the document using the criteria most beneficial to the employer to pass coverage (e.g., employees with least number of hours, vesting or compensation).

I've never seen documents like these before and am a bit surprised that they received approval from IRS.

Thanks for any assistance/input on the subject.

Any problems forcing a terminated employee to remain in a § 125 health FSA through the end of the plan year in which the termination occurs, and requiring premiums for that period to be taken from the employee's last paycheck(s)? Assuming no problems, if such a plan is established, does that mean COBRA would never become available under Prop. § 54.4980B-2, A-8, so that no COBRA notices or elections would ever need to be provided? (Assume the FSA is funded solely through salary reductions and other group health coverage was available).

If a C-corp establishes an ESOP that purchases 51% of the outstanding C-corp stock pursuant to an agreement signed by each shareholder, including the trustee of the ESOP, to convert the C-corp to an S-corp effective the next month, would a valuation premium for the 51% be appropriate in recognition of the fact that the ESOP will not be liable for federal income tax on its allocable share of the S-corp's earnings? While the participants of the ESOP will eventually pay federal income tax on the distribution from the ESOP to them, the present value of that tax burden should be far less than the present value of not having to pay any federal tax. Any thoughts would be appreciated.

A participant designates his wife as primary beneficiary and his daughter as secondary beneficiary for his defined contribution plan account. After he dies the balance is not immediately paid to the spouse. Should she or can she make a benficiary designation while the money remains in the plan? What participant rights does she have and not have?

Can a governement agency have a cafeteria plan? If so, what are the reporting requirements? 5500?, etc.?

Can a government agency have a cafeteria plan? If so, what are the reporting requirements? 5500? etc.?

I have a client with a 401(k) and MP plan combo. They allow deferrals ASAP but have a one year wait for match and MP contributions. Client wants to do the 3% NEC to the MP plan. All contributions in both plans are 100% vested immediately with no last day or hours requirements. The client wants all employees to get the maximum 25%/$30,000 every year between the two plans. My questions are -

He wants to use comp from DOP for the MP and match contributions but I don't think this is correct if someone is already in for the deferral portion and will be using a full year of comp for the deferrals but DOP comp for the 3% NEC, remaining 7% of MP and matching contributions. (Besides, I don't think there is a software system out there that will allow different comp for ADP and ACP testing, is there?)

Also, if everyone can defer ASAP, does that mean I have to put in the 3% NEC for those who have not satisfied eligibility in the MP plan in order to have a safe harbor on the ADP side for 1999?

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EAC

What SEC form is used for registering stock in a qualified plan?

What is the correction where it has just been discovered today, November 1, 1999, that a participant deferred $10,800 in 1998?

Does anyone know what "post-secondary" education means for purposes of the hardship distribution requirements under the Code? There appears to be nothing in the Code or the legislative history. What is the general practice? Thanks.

-Shaun

What is the correction in the following situation: Participant takes loan of $40,000. Participant had no outstanding loans. But participant's highest balance of a loan in 12-month period preceding the loan was $12,500. Can this be corrected under APRSC? Can this be corrected by having the participant repay $2,500 and reamortizing the remaining amount? What happens if the participant refuses to cooperate with the correction (repay the $2,500)?

Anyone know of any formulas used to calculate end of year bonuses? Any original ideas for "gifts", etc. would be appreciated.

If an LLC wants to provide deferred compensation benefits to its employees, can it do so to an employee who is also a limited partner in a partnership that comprises one of the LLC members? Could the employee be deemed a member of the LLC for compensation purposes?

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If an LLC wants to provide deferred compensation benefits to its employees, can it do so to an employee who is also a limited partner in a partnership that comprises one of the LLC members? Could the employee be deemed a member of the LLC for compensation purposes?

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Looking for web resources on this type of entity; particularly tax aspects.

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When a participant with a plan loan files bankruptcy, I understand that their plan loan payments stop. How is this handled administratively? Does interest still accrue? Does it stay on the books as a loan until there is a discharge of the bankruptcy? Is there any other option to the participant to start repaying the loan again after the discharge or do they only have the 30 days to pay? Etc.Etc!

Should the value of individual insurance policies held by a participant be included in the account balance for purposes of determining the maximum loan available? In this case, the participant had approximately a $100,000 balance, and $30,000 was the cash value of individual life insurance policies. Are they able to borrow $50,000 or $35,000?

Are non-electing church plans subject to 401(m) testing?