My mom works for a company which offers a PTO, where she earns 0.075hrs vacation time per 1.0 hour worked.

The employee handbook states that if an employee terminates his/her employment, they forfeit time earned. Is that legal ?

This is a Michigan location.

I have a question concerning a safe harbor 401(k) plan with a new comp feature. If a plan elects to use the 3% Qnec to satisfy the ADP safe Harbor how does it effect the new comp calculation. I believe that the Qnec is used in the average benefit percentage calculation to determine top-heavy but is not used in the rate group calculation. However, if the Qnec is classified as a fully vested profit sharing contribution can it be used in the rate group calculation.

All responses are greatly appreciated.

Read all about Roth IRAs at the Roth website but have a question which was not addressed....

I converted my IRA to a Roth IRA at the end of '98. I plan to marry soon and our combined income will then be over $170,000 p.a. Does this mean I can contribute to my Roth IRA up until the wedding date but not after? Or am I supposed to do something else with it?

Thank you for any brief answer to this....

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Brit

I am wondering what vendor provides documents for a Money Purchase Pension Plan that uses the "tiered" or "classification group" allocation method. Thanks for all input.

There is a new service available that uses an automated process to gather obituary information daily. This information is compared to your client list and any resulting matches are sent to you each business day for the final determination if it is a match. The service can be used for both spouses as well as other applications. I would like to hear back on how organizations are presently handling this issue. Are their other applications for this timely, accurate, and complete service that you can see? JIM Burke

Is there any legal responsibility for an employer by NOT auditing Flexible spending account claims submitted by an employee if they are administering the plan themselves? If so, where could I find documentation?

Where can I find a complete list of all the changes in family status for Cafeteria plans? I need to have documentation that would show that a husband changing jobs IS an eligble change in family status to change a health care spending account election.

We have an employee who currently has an election under the Dep. Care Flex but his spouse just started working nights instead of days and he wants to cancel. Same job, same hours... just different shift. It would certainly make sense, but I want to make sure it's within guidelines.

Employee Jane requests a change in her medical election under our Sect 125 plan. She states that her husband has enrolled himself and their children under his medical plan (he recently changed jobs). Jane wants to drop the medical plan for spouse and children but keep her coverage here because it is cheaper.

It would seem to me that dropping coverage altogether would be consistent with her husband's new eligibility as he could add her to his plan. He chose not to.

I'm really on the fence on this one. If I was jane's friend (as opposed to being the decision maker here) I would advocate on her behalf. Any thoughts would be greatly appreciated.

[This message has been edited by Steven7 (edited 06-01-99).]

I just need a quick confirmation on a proposed safe harbor formula. The employer wants to match 400% of 1% of pay. Is this safe harbor? I know that the aggregate match equals 100% of 4% but it does not seem right.

All responses are greatly appreciated.

When we completed the ADP test last year we utilized our right to exclude eligible participants who were not eligible by statuatory requirements (1 yr. & age 21). This moved the ADP % from 5.03% up to 5.33%. If we are using the prior year testing method when completing this year's test which ADP % can I use? Does it matter?

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Robb

I plan to concentrate my writing on different aspects of planning for retirement plan distributions.

My last few articles were on the (now repealed) grandfather exemption from the penalties on excess distributions/accumulations (2/96 issue of Estate Planning), spousal rollovers where the spouse was not the named beneficiary (10/97 issue of Estate Planning) and avoiding the penalty on pre-59 1/2 distributions via substantially equal periodic payments (scheduled for the 12/99 issue of Estate Planning).

Any suggestions as to topics for future articles would be appreciated.

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Bruce Steiner, attorney

(212) 986-6000 (NY office)

(201) 862-1080 (NJ office)

also admitted in FL

What is the ADP for the HC gropu for 12/31/97?

-ER makes a QNEX totalling 3% of eligible comp to all eligible ee's including HCE, to satisfy the top-heavy minimum required contribution.

-ER Makes no other nonelective contributions

-Plan does not allow employee after-tax contributions

-Gross comp is used for testing

-All NHCE are nonkey

Part, deferrals, Comp

A, 9500, 200000

B, 0, 130000

C, 4000, 80000

Answer is 6.65 Help

What is Part. A allocation of ER contribution for 1997?

-profit sharing plan

-Calendary year

-top heavy

-all eligible participants, including key-employees, are entitled to receive the top-heavy minimum contribution

-Maximum permitted disparity allowed by IRC 401(l)

-Integration level is TWB for 97 $65,400

-ER contribution is $9,500

Part, Key Employee Status, Gross comp

A, Key, 150000

B, Key, 98000

C, Nkey, 15000

Answer is $5,662. Help?

What is the excess contribution amount to be refunded to Participant D to satisfy the ADP test for 12/31/97?

ADP for HCE = 4.5

Max ADP which allows to pass test is 3.7

Part, Deferrals, Comp

A, 4500, 150000

B, 7000, 140000

C, 3000, 100000

D, 6300, 90000

Answer is 1,240 Explanation??

For situations in which the qualified plan beneficiary is a minor child, the plan would like to make an administrative practice of making the payee name the actual child beneficiary's name. Will the guardian have any difficulty negotiating such a check? Would using the child's name be a good or poor practice?

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Is vested employer money available for hardship withdrawal (provided no limitations in document)? Thanks

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How does the master trust business advertised by large banks differ from the single-sponsor master trust arrangements which are required to be reported on the 5500? More specifically, how do large master trust arrangements work?

[This message has been edited by genfre (edited 06-01-99).]

[This message has been edited by genfre (edited 06-01-99).]

If COBRA covers a self-insured medical expense reimbursement plan under Code Sec. 105(h), but is very unlikely to be invoked (due to fact that "premium" for COBRA coverage will cost 2% more than the reimbursements themselves)how best to handle COBRA notification requirements - without confusing employees as to what "benefit" they would receive from COBRA?

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What is the employer's maximun deductible discretionary profit sharing plan contribution?

- Total eligible compensation $1,000,000

- 401(k) deferrals - $50,000

- Matching contributions - $25,000

Answer $67,500 ?????