A Participant with an outstanding loan is being called up to reserve duty for the next 9-12 months. The plan permits a grace period for non-payments to not extend beyond the last day of the calendar quarter following the calendar quarter in which the required payment was due. It is likely that the participant will not make payments by the end of the grace period.

Since the participant is on a qualified military leave, must the outstanding balance be considered in default following the end of the grace period or can payments be suspended.

Plans of Professional Service Employers with fewer than 25 active participants are not covered by the PBGC.

How broad can one define Professional Service Employer (ERISA 4021(B) and © have the statutory language.)

Any cites?

Thanks

Company has a Simple IRA (with 100% match up to 3%) in effect for calendar 1999. Decision has been made to replace it with a profit sharing plan effective 1/1/2000. Simple IRS will be terminated 12/31/1999.

1) Can profit sharing plan be adopted in late 1999 with an effective date 1/1/2000, or must is be adopted during 2000? (I suspect the former is OK.)

2) Other than no new money going into the Simple IRA after 1999, what happens to the existing money?

3) The plan sponsor would have preferred to have the profit sharing plan in effect 1/1/99. It is prevented from doing so because of the Simple IRA. Can the Simple IRA be retroactively "converted" into a profit sharing plan? (I suspect any

solution in this area would be complex and not worth the trouble.)

Thanks

Does anyone know if a C2-DB study group is going to be held in Phoenix for the Dec exam?

Any ideas or sites that give ideas on how to communicate to employees that if they don't watch their own costs/utilizations then cost are going to keep increasing (premiums)?

An employer failed the do the 20% withholding for a harship distribution in 1998. How is this reported to the IRS (945)? Is there a excise tax penalty and how is it reported to the IRS (5330)? I believe that employee will have to amend their 98 return to reflect excise tax due on permature distribution. Any comments or thoughts from those who may have encountered this.

I need to determine whether the term SAS 70 Type 1 or Type 2 Employee means anything. Please let me know your thoughts. Thanks Ed

I requested, in writing, my former employee to transfer 401K funds in a Norwest Account to Janus via a wire transfer. Without calling to tell me the funds could not be wire transferred, he used the wire transfer account information and Norwest Mailed a check to the bank where the wire transfer should have been sent. This resulted in a delay of over a month because the funds were lost. The delay resulted in my loosing over $8,000 since I was unable to reinvest the funds at a lower rate. I believe the Plan Administrator had a ficuciary responsibility to contact me to obtain correct mailing information and that he is at fault for the loss and he should reimbursement me for the money I should have had. Am I correct in that assessment. Is there a particular part of the Erisa Law that relates to this? Thank you!

I have a plan document that has a "fail safe" provision for mandatory passing of the RATIO TEST by adding back ineligible or terminated participants. I was told (by someone, and I don't remember who) that this provision is no longer allowed in a document. I am currently restating the AA for Safe Harbor in 1999 and don't know if I can use this provision in the restatement. Any suggestions?

Sorry, to beating what seems to be a dead horse. I would like to know if anyone has seen school loans, payments just started, paid off with a 401K hardship withdrawal.

Looking for a recent PLR stating that an employer's contribution of unused sick leave to a qualified retirement plan does not constitute current taxable income to employees and is deductible by employer.

PLR 9827040 is somewhat similar but I believe the ruling I am looking for is more recent.

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Hi all, this is a topic I've not seen covered very much at all, but it is a big issue as us '98 Roth-converters-and-4-year-income-spreader-outers get ready for 1999's filing.

Based on my conversion, I've got about a $5,000 extra tax liability for 1998, 99, 00 and 01.

# 1 question, is there anything easy I can do to reduce this tax burden? I paid it all in 98.

On penalties, 98 was no problem because I used that first year exemption, so I didn't have any penalty on the amount underwithheld, but I'm trying to figure for 99. Obviously, I can either increase my job withholding or pay estimated tax so that I come in within $1,000 of what I finally owe. The question I have is, I've been looking at the penalty paperwork, Form 2210, and it APPEARs that the government penalty is a mere 5.04% of the amount underpaid. Is this correct? If it is, it greatly changes my strategy, 5% is not very much at all, and I would be inclined to pay the penalty and invest the money at 8 or 10% and pocket the difference. Anyone have any experience here? Anything I'm missing? I'm planning to pay the tax amount on time in 2000, by 4/15.

Here's the other stupid question: It's almost a question about an omission, but here goes. If I want the use of that $5,000 for most of the year, what's to stop me from increasing my w-4 employer withholding during the latter part of the year, I'm talking big amounts out of every paycheck, like $1,000, so that I meet the withholding requirement? 1040 doesn't make any distinction about the timing of w-4 withholding, it doesn't require that it be made ratably though the year, does it?

Thanks,

Chris

I am trying to determine if someone is "highly compensated" in a 401k plan for "adp" testing purposes. Their prior plan year wages was in excess of $80,000 but the current plan years wages was only $54,000.

Can anyone offer their technical expertise or experience?

I have a new DC plan, effective date 1/1/99 with first plan year ending 12/31/99. I would like to get favorable determination letter now but am having trouble with Part II, Line 5 of Schedule Q re 410(B). Stated simply, I have no data to use for Line 5 because the plan has a last day of the plan year requirement for getting contribution and first plan year is still open. What do I do?

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Go to the web site of VT Senator Jim Jeffords at http://www.senate.gov/~jeffords/ to see an exchange of letters between Jeffords and Gerstner. Big Blue Lou's arrogance is clearly shown.

we appear to be up and running, but did encounter a few problems in the installation instructions.

page 20, 1st sentance says 'All items in section 5 should be performed on the database server console'

that should read 'section 4'

under item 4.2 it says password can be found in section 3, item H(page 6)

its not in item H, but in item J. The password is there, but not necessarily the easiest to find.

when checking for ORA- errors, we had some in the qtdbalrt.log that weren't listed in the documentation. these appear to be normal, but they are verifying.

could not run Crystal until we went into Crystal and under Files / Options /

Database the data directory was blank.

had to set this to g:Quantech.

did the same under New Reports.

The Crystal reports (what few I looked at), appear to be working, though I have to do some minor adjustments.

More later...

does anyone know of a way of locating (finding the name of) a former employee (not anyone specific, in general) or a current employee of a large company. I imagine if I had an SSA form (from Schedule b) that would be one way. DOes anyone have any other suggestions? It could be any former or current employee.

Can a S-Corp with a Keogh plan have loans?

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Denise S. Prince

Praxis Consulting, Inc.

We have three employees covered by a group insurance plan. The premiums will be much lower if a switch is made to individual policies. If this is done do we 1)retain non taxability of premiums to employees and 2)have the option of establishing medical savings accounts? Thank you.

PrO Unlimited is hosting free, breakfast and lunch seminars around the country this October. The topic of the seminars will be proper classification of the contingent workforce. Many companies face fines, back taxes and in some cases disqualification of benefit plans due to improperly classifying their contractors, consultants or returning retirees. For an invitation call 609-439-1088 or email apopler@prounlimited.com. All inquiries are held in strict confidence.