an individual retired and took a lump sum. several years later it was determined that the amount was 5k too little. however the person has now deceased. can the spouse or estate get the make up payment or is there any recourse to anyone's knowledge. A reference would be appreciated.

thanks

A company has a 401(k) plan on a 2/1-1/31 plan year (2/1-1/31 limitation year also).

They amend the plan effective 1/1/99 to a calendar year (with a calendar limitation year), thus creating an eleven-month plan year (2/1/98 to 12/31/98) with an eleven-month limitation year.

Meanwhile, they start a profit sharing plan effective 1/1/98, with a calendar plan year and a calendar limitation year.

Starting in 1999, life is simple, since the limitation years are both the calendar year. However, for 1998, what is the maximum 415 contribution for the owner, based on the following?

1998 pay (full year) = $100,000

1998 pay (from 2/1/98 to 12/31/98) = $91,666

1998 401(k) deferral = $10,000 for the calendar year.

(Don't worry about the 15% of payroll aggregate limit; there are enough other employees around.)

If we were simply on a calendar year, the limit would be 25% of $100,000, or $25,000; and the maximum allocation to the profit for him would be $15,000.

But, we have an eleven-month limitation year for the 401(k) plan -- 2/1/98 to 12/31/98.

The regulations discuss the 415 limit for a short limitation year at 1.415-2(B)(4)(iii) with an example at 1.415-2(B)(4)(iv). In this case, the 415 limit is prorated downward, and the pay used is the pay during the short limitation year.

However, the regulations are vague when an employee is covered by 2 DC plans with different limitation years; with the only reference that I could find at 1.415--2(B)(3): "Election of multiple limitation years. Any employer that maintains more than one qualified plan may elect to use different limnitation years for each such plan in accordance with rules determined by the Commissioner." I could find no further guidance.

Is his 415 limit equal to 25% of $100,000, 25% of $91,667, 25% of something else?

Any ideas?

I re-read an article in the Wall Street Journal dated March 18,1999. The article stated that a number of investment companies, including TIAA-CREF, are telling their clients that the surviving NON-SPOUSE beneficiaries can continue the distribution schedule based on the original owners life and are NOT required to be taxed on the full distribution immediately (or over 5 years). Is this true? Is this the same for 401(k) distributions? (The articel seems to say it is.)

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My husband died on May 27,1999, He has a pension plan in which he named his 2 adult children from a previous marriage as the beneficiaries. This was done before we were married. He died at a young age and did not get around to changing the beneficiary to me. What are my rights in this case? He did tell me that since I was his spouse that his pension would automatically go to me if something were to happen to him.

My firm is getting ready to offer Hedge Funds to the clients in our trust division. Does anyone have any input as to potential problems/situations I should keep an eye out for with these as investments in IRAs? I can't find anything, but these appear to be a subject of great debate on other levels, which is why I would like some input.

What's happening with the legislation that affects the "same desk rule?"

IRC Section 412 clearly states it applies to 401(a) and 403(a) plans, appearing to exclude TSAs from coverage. The TSA Answer Book says they are subject to the rules.Per a discussion with Rosamund Ferber, Senior Tax Law Specialist, IRS, they may be subject under Title I of ERISA. I have review Title I, and honestly can't find a clear cut answer one way or the other. Can someone steer me in the right direction?

A full time employee was hired 6/1/98 at a payrate of $10,000 per month ($120,000 per year).

The 401k plan is a calendar year plan year, with a 1 year waiting period, and entry dates of July 1 and January 1.

Our employee becomes eligible for the plan on 7/1/99.

In performing the ADP (and ACP) tests for 1999, is he an HCE?

(Note that his 1998 earnings for the part of the year that he worked was $70,000 and his 1999 earnings was $120,000.)

Case 1: The plan is not using the look-back rule.

Here, since his 1999 pay was $120,000, I believe that he is an HCE for 1999. Is this correct?

Case 2: The plan is using the look-back rule.

Here, I believe he is not an HCE for 1998, but is an HCE for 1999. However, he does enter the ADP test for 1999 as an HCE. Is this correct?

Thanks.

A client is starting a safe harbor 401(k) (new plan) effective July 1 with the 3% non-elective option. They do not want to contribute the 3% for the period jan1-June 30. Am I right to assume that there needs to be a short plan year of 7/1 - 12/31 for 1999 to do the safe harbor ? Will this reduce the $10,000 401k deferral limit to $5,000?

thanks-jf

Does anyone know if you can print reports in Quantech and sort by Division ? I set up 5 divisions in the employer screen, then gave each employee a division code in the census. I want to print a report of contributions and eligibility by division. Any hints ? As a follow up to this question, when using the data collection routine to input 401(k) contributions, can I have the input come up by Division ?

Any help appreciated -- JF

I'd be interested in hearing from others who have faced this issue in employee benefits education/communication-- what worked, what didn't, any advice, etc. I am a free-lance writer with the assignment of informing active employees and terminated vested employees about changes in lump sum distributions in terms of the discount rate and the change in mortality tables. This is a complicated subject which usually makes people's eyes glaze over.

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Susan

Does the rule that the IRS can deem your plan terminated if you fail to make a contribution in 3 out of the last 5 years apply to 401(k) plans? We have a client whose plan has not had any type of contribution (deferral or employer) in the last 4-5 years. Should the plan be deemed terminated and assets disbursed?

Does anyone have any good internet addresses, suggested articles or other resources so that I can analyze whether an employer with an overfunded pension plan should consider offering retiree health care?

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Charlie Stevens

Michael Best & Friedrich LLP

QMSCO requires employee's ex-husband to cover employee's son under his medical plan. Ex loses coverage due termination & apparently did not have access to COBRA. Employee elects to cover son under medical/flex plan. Ex-husband regains coverage with a new employer, and employee wants to make mid-year cafeteria plan change to drop son's coverage. Would this be permitted under the "catch-all" provision under existing proposed regs (1.125-2, Q&A-6©, or under new temporary regulations re: allowing changes consistent with QMCSOs and other family court orders Temp. Treas. Reg. Sec. 1.125-4T(d)?

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I have a few basic questions regarding converting to a Roth IRA

-Left one company with a 401K to work in a family-run business with no retirement plans. Want to convert to Roth IRA but the company my 401K money is with does not offer Roth's just traditional. Any recommendations (local banks, big firms?)to put this money?

-Have more than 2,000 already in 401K. Once I convert, can I then start contributing a full 2,000 that year?

-The money I converted-Can that ever be withdrawn early?

Thanks for the help.

Amy

If a plan sponsor using a nonstandardized regional prototype restates on to a standardized regional prototype (current restatement date), is it necessary to file for an approval letter? Will this be sufficient for the GUST amendments in 2000 (current prototype not updated for GUST yet) when the final prototypes are available due to the retroactivity involved?

MY EMPLOYER SENDS IN MONEY TO MY SARSEP ONLY SPORADICALLY, AND WHEN I TRY TO RECONCILE MY NUMBERS (DEDUCTIONS) AGAINST THEIRS (ACTUAL CONTRIBUTIONS) THEY ALL RUN FROM THE LIGHT LIKE A BUNCH OF COCKROACHES. BASICALLY, MY EMPLOYER HAS TOLD ME, ANY LOYAL EMPLOYEE WOULD BE WILLING TO "LEND" THE COMPANY MONEY IN ORDER TO ENSURE ITS FINANCIAL HEALTH. I, FOR MY PART, HAVING NOT BEEN ASKED TO BE A "LENDER", CONSIDER THIS MISAPPROPRIATION TO BE THEFT. AS IT STANDS, MY EMPLOYER KNOWS I AM SO FAR BEHIND IN UNPURCHASED SHARES THAT I DON'T DARE LEAVE AND THAT IF I COMPLAIN THEY WILL HAVE A LABOR LAWYER (ALREADY SHADOWING ME)ON MY CASE IN NO TIME FLAT....SO, THE BOTTOM LINE: HOW LONG IS THE ESCROW PERIOD, ANYWAY? CAN THEY HOLD MY MONEY FOR A MONTH, TWO MONTHS, HALF A YEAR, HOW LONG? AM I ON THE SHORT END OF THIS, AND MAY AS WELL KISS MY MONEY GOODBY?

[This message has been edited by Kronenberg (edited 07-09-99).]

Can a 403(b) tax shelter annunity be included in a salary reduction Sec 125 cafeteria plan avoiding social security tax on the employee TSA contribution.