regarding qualification as a s.414(e) "church plan"- is there any difference between DOL Opinion Letters and IRS Private Letter Rulings? Are both necessary? Most opinion letters defer to PLR decisions, none of which seem to deny exempt status. Also, is there any case law on this other than Fuxan?

[This message has been edited by keltonk (edited 06-11-99).]

Participant has life insurance and real property in his QRP account. I know the life insurance cannot be rolled into an IRA. How is he to treat the real property? More specifically, how is it characterized as property in an IRA? What documents are needed to do this?

Regarding participant counting, I have a plan which execeeded 120 participants on 1/1/98. there are approx. 18 terminated participants from prior years 3 who we have been unable to locate and subsequently distribute.

Can I hold their balances in a suspense acocutn and avoid having to have an audit and file long form 5500?

I recieved this in the mail today from my HR person:

When you were hired, you were notified that a weekly employee contribution is requried for the group medical/dental coverage. We have recently discovered that group medical employee contributions are not being deducted from your paychecks. It is now necessary to retroactively make deductions to cover your contribution for your medical insurance. Your insurance when into effect June 30, 1997. The total retroactive amount is $582.30, you will see retroactive deductions of $16.60 over the next 58 weeks, along with the normal by-weekly deduction of $16.60. We regret any inconvenience this may cause.

Do I have to take this ? It doesn't seem fair to me. I do not work in the main office, have never received any benefits counseling, I don't beleive anyone ever told me there were suppose to be weekly deductions, it seems like they screwed up and now I'm getting dinged.

I am working on a deferred compensation plan for a company and a consultant wants to add a "SERP swap" feature in which the employees can choose to forego deferred compensation benefits and the employer then enters into a split dollar life insurance arrangement in which the insurance is owned by an irrevocable life insurance trust with a collateral assignment to the company. I am concerned with taxability to the executive at the time of the swap to the split dollar. If you have worked on this issue, I'd appreciate your input.

I always understood that 50% of the IRA, if it is community property, would be includible in your estate for estate tax purposes. The balance would be your wife's community interest and thus excluded from your estate. If you named your wife as beneficiary for the non-community half, it would be eligble for the estate tax marital deduction.

None of this addresses the better income tax elections available if the IRA goes to your wife in full.

If this is critical to your estate planning you should check with a California attorney.

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[This message has been edited by P A Weick (edited 06-11-99).]

You may want to check your plan document. Many prototypes now allow the Plan Administrator to forfeit the benefits of those he cannot reasonably find. You might also want to review some of the comments in a discussion which Laura Millwood started on 5/27/99 about dealing with lost participants.

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If a person has 9 years in with a co. and they announce they are discontinuing a pension plan, does the person have any rights to any retirement at all?

I left my job in 12/98. I was an 8 year member in a profit sharing plan w/ my former employer.. which is called "XYZ Corp Retirement Plan & Trust". In mid Feb. of this year I provided a completed "election of method of payment" form, requesting the plan distribution to be rolled over to my new employer's 401K plan. It is now 6/10 and the payment has not been made. After numerous calls to my prior employer, I rec'd a copy of a letter my former employer sent to the "benefits administrator" at a bank, which indicates at that time my former employer ordered the draft in a sum certain to be distributed to my new 401k. I have even called since that letter, and I feel I am getting the run around.

I know of other former employees of this business that have had similar problems.

What can I do. Also, can I order plan documents so I can verify that they are sending me the correct amount. How do I order those documents and what documents do I order. I have heard that my former employer has miscalculated or underpaid former employees in the same situation as me. Seems to be a pattern of delay of distribution, and underpaying of distributions.

Thanks for any help. mmcarp@megsinet.com

I have a new comp plan which will hit the 15% deduct limit before allowing the owners to get to 415 limit.

I have two owners, owner one with very low compensation. Do I give owner one 25% and the max allowable with still passing cross testing to owner 2. (Probably about 19%.) or

Do both owners need to receive the same percentage?

If this question is unclear please let me know and I will explain in more detail.

Thanks!!!

We are looking into a ROTH IRA to possibly use for a house fund. I am looking for the definition of "first home". I realize that the definition can vary between different homebuyers programs but no one I have talked to has been able or willing to give me one for the ROTH IRA.

I failed to recharacterize my IRAs to roth IRA prior to 12-31-98. In April I discovered that I did indeed meet income limitations for 1998. Is it too late to convert for 1998 by filing amended return?

Can a divorced participant with 3 underage children name an Institute as beneficiary?

I am curious to know how most practitioners handle the calculation of a participants lump sum benefit. One method is using the participants age nearest birthday and discounting at the applicable interest rate based on the number of full years prior to age 65. Another method is to discount by the exact number of years and months the payment preceeds NRD. Generally the plan document is silent and only calls for the lump sum to be actuarially equivalent.

Any thoughts would be appreciated.

Employee in a DC plan mistakenly had after-tax dollars withheld instead of pre-tax. What implications if we want to convert after-tax to pre-tax dollars in 1999?

Are there any rules/regulations/etc. regarding what type of investments (i.e., cds, mutual funds) are suitable for 457 plans? Are there any rules/regulations/etc. which indicate that certain types of investments are prohibited in 457 plans?

When responding, cites would be helpful.

Where can I find articles/info on how employees can benefit from not rolling over shares of employer stock from a qualified plan? Is there a provider out there that has published anything on this which is available?

A company is freezing it's DB plan and enriching significantly the match and vesting schedule in the 401k. There are some older participants who will be adversely affected by the change, but the vast majority of the workforce is younger and will benefit greatly from the changes in the 401k. Does anyone have advice concerning the communication of this change?

Company A is to be acquired by company B effective 10-1. Company A is going to terminate their 401(k) effective 9-30. The 401(k) plan allows participants to defer a portion of their year end bonus(within 2 1/2 months after plan year end)which would be paid in November. If the plan is terminated 9-30 can the participant's bonuses be deferred if they execute the deferral agreement before termination since the bonuses are attributable to services during the plan year? Or, would the plan have to remain active to have this option? Thanks

I'm a retirement plan consultant with no actuary experience. So, when I heard this question from one of our advisors I wasn't sure if he had his facts straight or if it was actually possible. Here's what he told me:

For a mom and pop company with no employees the husband earns the majority of the wages and pays the wife $400/year. She is 55 years old. They are looking to set up a DB plan--the advisor is telling me that the TPA says that the contribution for the wife will be ~$9,000/year. He says the "De minumus" rule under 415(B) allows for this.

Is this reasonable? What is largest DB contribution that most that a 55 year old person making $400/year could get? Thanks for your help.

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