Can a plan allow an employee who is rehired in the same plan year to change the elections he or she had in place prior to termination? The proposed regs indicate that this is permissible for health and life benefits but not for dependent care spending accounts.

I manage a newly formed nonprofit organization and am working on putting together a benefits package for employees. At the top of this is of course health insurance. What my board has asked me to do is to find a common industry "standard" for the shared costs of paying health insurance, especially for an employee's family. Is there such a standard, and if so, how can I find one as it relates to the nonprofit sector? Thank you very much.

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Keith D. Wolfe

International Affairs Laboratory for Research and Education

www.intalab.org

We are a 650 emp organization. We'd like to start a program that allows people to donate their accumulated sick days to people in need who may not have enough to carry them through to std. Anyone familar with this type of arrangement? What are the potential problems?

Thanks.

Is it possible or has there been VERY RECENT legislation stating that 403(b)plan participants can now have access to separately managed accounts or individual brokerage accounts?

Does anybody have any info regarding story in recent Wall Street Journal that IRS will release PLR that permits individual to set up a single IRA with different subaccounts (each with a different beneficiary)that would permit distributions to be made over each individual beneficiary's life expectancy. Thanks. Ed

Hi Everyone,

I have a customer who converted a Traditional IRA into a ROTH IRA and then immediately withdrew money from the ROTH Conversion.

Within 60 days of the withdrawal these monies were successfully rolled back into the ROTH IRA.

Will the successful rollover back into the ROTH waive the application of the 10% penalty on the withdrawal of converted funds within the 5 year non-exclusion period OR does just the fact that the money was accessed during the 5 year period for this conversion cause the 10% penaly to be applied despite the successful rollover back into the ROTH?

Customer does not meet any other penalty exclusion cricumstances.

Am I confused? Must be the heat.

Thanks,

Dave H.

Suppose an Employer sets up a SIMPLE IRA Plan. Before two years have passed, the Employer sets up a 401(k) Plan. Does the exclusive plan requirement apply to SIMPLE IRAs? Assuming that it does, then what happens to the SIMPLE IRA when the Employer sets up the 401(k) Plan? Is it terminated? Is it frozen? Does it convert to individual IRAs? If the Employer does not "officially" terminate or freeze the IRA, is he obligated (or even permitted) to continue making contributions to it after the 401(k)plan is in place?

Part two of this scenario: Suppose that the above occurs before the SIMPLE IRA has been in place for two years. What can the participants do with respect to their SIMPLE IRA accounts? If they roll them into individual IRAs, are they still penalized the 25% (because it is being rolled over earlier than two years)? If so, can they leave the money where it is until two years have passed, and then roll it over and avoid the penalty?

Thanks for any help you can provide.

Looking for recommendations on software used to calculate state tax withholding. Any recommendations?

This is overtime /vacation pay for our manufacturing company:

A holiday week is considered 32 hours actually worked at your regular rate of pay, plus 8 hours holiday pay at your regular rate of pay (for any observed holiday) which equals 40 hours. If you work on a paid holiday, you will receive an extra 8 hours regular pay.

Is this standard? Or is it a requirement that the employer pay 1 1/2 times the regular rate for the hours actually worked on the holiday, plus their paid time off for the holiday?

What does your company do? Your comments are appreciated.

I have a client company that made two invalid loans to two highly compensated employees. The employees have no ownership in the company and no other relationship with the company that would seem to make them "disqualified persons" as that term is defined in the Form 5330 (which is the form used to pay the applicable excise tax to the Service). Is an excise tax payable by the Company and not by the two employees? What about the individuals at the Company who may have been fiduciaries who participated in making the loans? It does not make much sense to me to have an excise tax paid on the same loan by more than one company/individual. I would like to simply have the company pay the excise tax on the two loans. I am rambling! Any response to any of the foregoing would be appreciated. Thanks.

At what age can you begin contributing to a Roth IRA. Is this an intelligent investment decision for retirement or are there better alternatives?

Whether a company can have 4 entry dates into their 401(k) plan and the employees of a newly acquired subsidiary can participate in the plan but with only 2 entry dates? Any potential problems with 401(a)(4) nondiscrimination testing (benefit, right or feature)?

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My firm is struggling with attracting and retaining part-time workers. We offer health insurance, however, the part-timer must pay the entire premium. I would be interested to hear from other companies if you 1) offer part-time benefits, and 2) how much of the premium does your firs subsidize?

Company A has a qualified plan. On 1/1/98, the plan had 90 participants. On 12/31/98, the plan had 64 participants. Of the 26 that dropped from participation, 4 quit, 2 were transferred to a nonparticipating foreign affiliate, and 20 were laid off. Under the rule of thumb of a 20% or more reduction in participation during a year, this appears to be a partial termination.

My question is: must Company A cause to be fully vested (a) all 26, (B) only the 20 who were laid off, or © only the 22 who were laid off and/or transferred?

I have a client who wants an opinion letter for its prototype Educational IRA document; however, I can not find where any LRMs have been issued nor where the IRS has said they will start accepting requests for opinion letters. Any news?

A company has several nonunion and union plans. Members of one of the union 401(k) plans want to increase deferral limits to 20%. There is also a 5% company profit sharing contribution. When a company sponsors multiple retirement plans, including union plans, how is the 404 limit calculated? Is it total corporate payroll, or is each union plan payroll calculated separately?

Should a Schedule P be issued by the custodian of a 403(B)(7) custodial account that is a Title I plan? My research points to Sch. P for 401(a) plans only. Do you have a reference that support filing or not filing Schedule P?

Does anyone know of any software that can perform the MEA calculation and then proceed with the administration of 403(B) plans. I work for a TPA firm and we use Quantech (QT) for the administration of our defined contribution plans. When I spoke to QT's technical support about this capabiltiy they responded that it is not available on the system at this time. Any suggestions or advice would be appreciated. Thanks.

I am being told by 401(k) prototype sponsor that it is appropriate to allow deferrals in a 401(k) plan prior to the date that the document is executed so long as: (1) the deferrals are placed in a trust within the 15-day period (which funds would be transferred to the trust subsequently established for the plan); (2) the effective date of the document is retroactive to the date the deferrals were first withheld; (3) the document reflects the appropriate deferral percentages (ie, the document reflects what the participants' election forms allowed them to defer). This is contrary to what I have always thought; that is, I have always thought that deferrals could not be allowed until there was an executed document in place. Further, even if deferrals could be allowed before a document is in place, I do not think it is appropriate to place the deferrals in another trust to later be transferred to the trust established for the plan. Any thoughts?

We have an employee whose dependent died early in the year. We of course stopped his Dependent Care deduction, but the remaining concerned is that more has been deducted than they will have receipts for. Can the full amount, contributed to the plan prior to cancellation of the deduction, be refunded even without receipts totalling the contributed amount?