I am the marketing director of a large local Phoenix, AZ CPA firm. We do plan audits along with design, administration, etc. I understand that basic plan information is public information. I would like to obtain a list of all the plans in Maricopa county (Phoenix) which require such audits. Anyone know where I could obtain such information? Thanks.

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Steve Parker

My husband left his employer at the end of March. We received the health/dental cancellation notice July 15 and still have not received any COBRA notification. My understanding was that notice must be within 14 days of the cancellation or the event which caused the cancellation. Since we did not receive notification, are there any consequences to the employer?? I think that a three month delay in notification is more than an oversight...

Would really just like some links or something to point me in the right direction.

Thanks in advance...Sheila K

Can a 401(k) plan charge the participant for a distribution?

Small employer is terminating 2 year old 401(k) plan with only one active participant with any account balance. The 401(k) plan apparently (I haven't seen any background docs yet)includes money "fozen" from a previous money purchase plan MPP that the employer sponsored for about 12 years and terminated before adopting the 401(k)(again all benefits were for this one participant).

The paticipant plans to roll over his 401(k) contributions to a new traditional IRA.

Question: assuming his plan distribution includes after-tax contributions that he made to the former MPP, am I correct that he can't rollover those proceeds to an IRA, but could rollover the earnings on those contributions?

Anyone willing to share any thoughts on how the former MPP controbutins are treated or options?

Thanks

On a previous message I read about companies that are selling debit cards for use by FSA participants.

Do you have any additional information on this or know of the names of any companies that are doing this?

Also, how does this effect/change the role of the TPA?

Some of my clients have opted out of employer health Ins. since covered on spouses plan. Employer Has always paid them money in lieu, BUT, mandated that it go to the 401(k) and sit till they retire (not evfen available if over 59 1/2!). Also, employer now states that this money approx $2,000 per year is to be treated like a voluntary sdalary deferral and lowers what they may put in 401(k) or 403(b){yes, they are a 501C3, with an old 401(k) also}. My clients want this money to be paid to them directly and not aaffect their MEA.

I know that the employer doesn't have to pay for health premium not used, but since they do, must it be restricted, etc.?

Some of my clients have opted out of employer health Ins. since covered on spouses plan. Employer Has always paid them money in lieu, BUT, mandated that it go to the 401(k) and sit till they retire (not evfen available if over 59 1/2!). Also, employer now states that this money approx $2,000 per year is to be treated like a voluntary sdalary deferral and lowers what they may put in 401(k) or 403(B){yes, they are a 501C3, with an old 401(k) also}. My clients want this money to be paid to them directly and not aaffect their MEA.

I know that the employer doesn't have to pay for health premium not used, but since they do, must it be restricted, etc.?

In the first year of the Plan an Employer allowed two employees to withdraw their 401(k) contributions without hardship paperwork and allowed them to continue to contribute to the plan.

Is this correctable?

What would be the method of correction?

Can anyone recommend a good text on ESOP administration?

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Any thoughts on whether an employer's payment of a housing allowance for a foreign assignment is includable as FICA wages, even though it is excludable from income tax under IRC 911? I believe it would constitute FICA wages, since I cannot find any applicable exclusion from the FICA wages definition. On the other hand, I have searched various IRS publications and instructions (other sources, too), and can find nothing in the affirmative. Thanks.

If you fail to correct a 415 limit for a 12/31/97 plan, can you go ahead and correct it now under APRSC because it's still within 2 year period? Is the corrective distribution(returning salary deferrals) only taxable for 1999 tax year? Is there any penalty/excise tax involved? Your comment/response will greatly appreciated.

Will someone please take a look at Reg. Sect. 1.414(q)-1T Q&A 14 and give me an opinion? This sure seems to indicate you can use either the Look-Back or Determination Year in determining HCEs.

I believe the overfunding can be used for a retiree medical benefit plan and I have heard that there are people/firms out there who "buy" excess assets although I don't know how this works (but I would like to find out more). I'm sure there are other opportunities available, hopefully this topic will generate some interesting responses.

We have an employee participating in our dependent care plan. The employee wants to pay for preschool tuition in full in Sept. for the school year 99-00. How will she be able to receive reimbursement? Should decisions be based on date of payment or date of daycare provided? What is the best way for the employee to 'pretax' as much money as possible?

I have been to several seminars and have read several articles which recommend that companies have their COBRA procedures audited periodically. My problem is that I can't find an independent firm who does this. I can only find insurance brokers and COBRA administration firms. I don't want to be "sold" insurance or COBRA administrative services. Does anyone know a firm that does an objective COBRA audit?

I am interested in ways to reward employees for not using their medical benefits. The utilization is killing the claims experience. There are no major claims over $10,000. The employer is thinking about returning half the medical deductible in cash to the employee if it is not used. Thanks for your help.

If you convert to a Roth IRA in 1999, the Roth IRA regulations permit you to recharacterize back to a traditional IRA and then convert again once this year.

In one of Barry Picker's articles at he suggests that if you convert into several Roth IRAs and one of them drops in value, you could recharacterize that one Roth IRa and then reconvert it. (I suppose the extreme case would be to put each separate security into a separate Roth IRA.)

This seems consistent with everything else involving IRAs (for example, if you have several IRAs, you can calculate substantially equal periodic payments separately for one IRA for purposes of avoiding the penalty for pre-59 1/2 distributions). But I would appreciate it if others would confirm that the above is their understanding as well. I have a client who set up several Roth IRAs so that he could leave each one in trust for a different beneficiary and be assured that he would get the benefit of the different life expectancies (which he might have gotten anyway, but there is some question as to that issue).

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Bruce Steiner, attorney

(212) 986-6000 (NY office)

(201) 862-1080 (NJ office)

also admitted in FL

I have in the 1999 year converted a traditional IRA to a Roth IRA and am wondering if a person can recharacterize part of the Roth conversion back to a traditional IRA or if the full amount of the conversion has to be recharacterized. I am wondering if I can protect part of my retirement that exists in the Roth and take an unqualified distribution out of the recharacterized traditional IRA. I am seeking to avoid the 10% unqualified distribution penalty on the Roth IRA.

Does anyone have experience in organizing and dealing with a foreign sales corporation as an asset of an IRA? I am especially concerned about prohibited transaction and valuation issues. Also would like to know about any experience in handling this type of asset.

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If a participant has a vested balance between 10,000 - 20,000. The max loan calc comes out to a loan of $10,000. If the plan does not accept collateral other than 50% of acct. balance is the max in reality lower. For eg. a participant with a 15K balance could only take a $7,500 loan.