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.

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.

PLR 9929043 concludes that financial counseling services provided to surviviors of terminally ill employees are income, which I agree with.

However, all the commentary I have read states that the same services, if provided to an employee, would be excludable under IRC Sec. 132. I thought these expenses would not be excludable under IRC Sec. 132 because they are Sec. 212 expenses.

Please let me know your thoughts, with cites if possible. Thanks.

Thanks for the responses to my first questions.

I understand that a trustee to trustee transfer is not a distributable event, but can an employee in a 401(k) plan transfer his/her assets to another plan for any reason?

Has anyone seen a good comparison marketing piece on these three types of plans I started to do one and realized I might be recreating the wheel.

Prior to GATT, Plan used PBGC rates at time of dist. Plan amended to use GATT as of April prior to plan year. Transition technoque is to use GATT rate as of 2 months prior to dist. (correspond w/ pre GATT timing) and as of April prior to plan year of dist. Whichever rate produces higher benefit.

Say plan was amended 11/1/96 and adopted 8/14/97. If person is to receive lump sum as of say 12/1/96 should it be computed using pre GATT basis, since it was not yet adopted? My undetstanding of law is that you use new GATT technique transition from 11/1/96 through 8/14/98, but how could one use GATT technique prior to adoption of amendment? Any thoughts out there?

Can anyone provide some perspective on why benefits under an ESOP can't be tested for nondiscrimination using cross testing? I am trying to get a handle on both ESOPs and cross testing and struggling some. I'd appreciate insight.

We've got a client with a non standardized document with an allocation formula stated as follows: a) 16.5% of each eligible participant's compensation during such plan year up to $150,000; plus b) 5.7% of each eligible participant's compensation during such plan year in excess of $60,000, up to $150,000. Does anyone see a problem with this formula? They happened to receive a determination letter.