For purposes of Code Sec. 411(d)(6), can the right to a discretionary employer contribution be said to have accrued before the contribution deadline (12/31 for this 403(b)plan), where the employer actually makes the contribution on a payroll to payroll basis? Employer has traditionally contributed 5% of contribution but wants to reduce this level retroactive to 1/1/99.

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We are filing for a determination upon termination for a 401(k) plan. The sponsor would like to make distributions to terminated participants at this time. The company is still viable and these are participants that have been terminated for some time (nothing to do with plan term).

I don't think they should make distributions until the termination has been approved. This is the common sense approach. What is the legal approach?

Looking for "boiler plate" disclaimer language to put into a summary plan description indicating if there is a discrepancy in information, the master plan document will be considered correct.

Do the new regulations in effect after 12/31/98 that prohibit rollover of 401(k) contributions apply to pre-1988 earnings from that source?

I have a client with a DB plan that pays a $1000 "death benefit" to a beneficiary designated by every participant who dies after reaching normal retirement age. This is intended to be a sort of burial benefit. Is there some advantage to having this contained within the DB plan? Why not provide for this outside of the plan? If there is no good reason to have it in the plan, I would prefer to take it out (assuming that it is not a protected benefit under Section 411(d)(6) since it is an ancillary benefit). Any thoughts would be appreciated. Thanks in advance for your response.

Any limit on how far in advance employer can provide 204(h) notice, assuming amendment has been adopted and is effective at a date in the future, e.g., plan year ends Dec 31, 1999 and employer amends on July 1, 1999 to freeze contributions beginning Jan 1, 2000?

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Is there any guidance on how far ahead a 204(h) notice can be provided to participants, assuming the plan amendment has already been adopted, e.g., plan year ends December 31, 1999 and employer amends on July 1, 1999 to freeze contributions beginning Jan 1, 2000 ?

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Is it necessary to have employees sign a waiver if they are declining medical benefits offered by their company? Are we legally required to obtain this waiver?

MPPP has a last day of the plan year requirement with respect to allocation of contribution. Plan year ends October 31. Employer required to contribute 8%. Employer going to amend plan to:

1) Amend contribution formula to 0% of compensation for plan year ending Oct 31, 1999; and

2) Freeze MPPP by having 0% of compensation formula apply to all following plan years.

1) above is O.K. because of last day of the plan year requirement, i.e., no §411(d) cutback because no accrual until Oct 31, 1999.

With respect to frozen plan, plan operates as if ongoing plan except for fact that no further contributions will be made, unless, perhaps, employer decides to turn it on again. Thus, vesting, etc. applies as it normally would.

Any comments or suggestions??

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Does anyone know what the anticpated medical inflation rate is expected to be for this year? For PPO plan and dental plans and perscriptions?

We have been using the same 402(f) notice that was originally issued way back when.

Are there any required updates to that document? Has it been changed?

If no changes are required, can we make discretionary changes to improve readablity and remove irrelevant content?

A new employee joined a firm which sponsors a SIMPLE IRA. The employee has particpated in the previous employers 401(k) this calendar year. What limit applies to the employee for deductions to the SIMPLE IRA?? Thanks, Mick

A client has a 401(k) plan that has permitted distributions under a QDRO to be made before the earliest retirement age. (The plan does not contain a provision permitting alternate payees to receive QDRO distributions before earliest retirement age). Does anyone have any suggested corrections other than to amend the plan to permit pre-earliest retirement age distributions going forward?

In determining whether an individual can be "cashed out" at the $5,000 limit, you must determine whether, at the time of any prior distribution, the individual's accrued benefit exceeded the $5,000 limit. Accordingly, it appears that the lookback rule would not apply to terminated vested participants in a DB plan that have never had a prior distribution. Is this correct? Also, has anyone heard the status of the elimination of the lookback rule?

An employer maintains a top hat deferred comp. plan for key employees and wants to expand to include key employees of a business that is in "controlled group" relationship with the employer. Model documents seem to permit this - any special pitfalls to look out for?

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An independant broker has been operating as a sole propreitor for 5 years and maintains a Profit Shaing plan with a 2 year eligibility period and no vesting. He currently has no employees because, under the terms of his contract with the brokerage firm he represents, his assistant is considered a "home office" employee, receives a W-2 straight from the brokerage firm and participantes in the brokerage firm's 401k plan and health plans.

Now, the contract between the independant agent and the brokerage firm has been re-negotiated. As a result, his assistant will now be his own employee. His assistant will be working at the same location and doing the same things as before, but will no longer be an employee of the brokerage firm and will not be able to participate in any of the firm's retirement or health plan programs.

Now, this assistant has been working with this broker for several years. Under the same desk rule, my interpretation would be that he would be imediately eligible to particiapte in the broker's PSP as of the effective date of the new contract. Is this correct? Normally, the same desk rule is only applied to qualification for QP distributions, but I found a reference regarding two merged county hospitals that applied the rule to eligibility. Has anyone seen this scenerio play out in real life?

Also, would this conclusion look any different if the broker had sponsored a SEP or SIMPLE instead of a PSP?

I've recently been terminated from my job,(though the words "terminated" or "fired" have yet to be uttered from anyone's lips. What I have been told, is "your job will be advertised, and we are giving you some time to find a new job".

Well, it sounds good to give me time, but I work over 40 hours a week, and am not at all sure when this "LOOKING" will take place, especially since those words have yet to be uttered.

I've asked my HR director, if my accrued vacation and sick time can be used after I am replaced, and he didn't know! He said he would "research" it, but it seems, I am doing his job also.

Any ideas???

My understanding is that Rev. Proc. 99-23, 1999-16 I.R.B. 5, did not extend the SBJPA amendment deadline of 12-31-98 (or end of 1998 plan year, if later) applicable to 403(b)plans. Any comments on options for plans that did not meet the amendment deadlines?

[Note: This message has been edited by CVCalhoun]

Can the sponsor of an overfunded defined benefit pension plan use the plan's excess to extinguish an existing corporate liability? Plan sponsor owes severance benefits to employees (who are participants in the DB plan) of a wholly owned subsidiary. Sponsor is selling the sub, and wants to use the excess from the plan to satisfy the severance obligation. Can they do this?

In an amazing display of the use of the internet, IBM employees are staging a major challenge to the Corporations decision to convert their defined pension plan to a cash balance plan.

Using a Yahoo club site more than 1300 members have posted over 8,000 messages, almost of of which are against the planned conversion. Moreover, the company's employee's are holding union meetings for the first time in the company's 88 year history. The first club called IBMPENSION has now spawned one called IBMUNION, anthor called IBM Rochester (for the Rochester Minnesotta IBM plant) and now a few days ago IBM employees in the United Kingdom have formed the first international IBM employee board to protest benefit cuts. Find out more about this revolt by going to this site and its links to many other sites including the Cashbalance.com site;

http://clubs.yahoo.com/clubs/ibmpension