I have a participant that worked 6 mos as a non-union employee and then joined the union and continued working for the same employer. He is now is no longer eligible to participate in their profit sharing plan. The plan provisions are that all employees completing 501 hours share in the year end profit sharing contribution (including terms). He has not term'd and is no longer an eligible ee but did complete the 501 requirement. Does he share?

My company continues to maintain a SARSEP benefit plan and are very generous with their contributions. However, the financial institution that originally set up the plan has limited choices in investments. I am preparing a proposal to change from the financial institution to a financial planner. The IRS has said that the company can continue to operate the SARSEP if they "appoint a new trustee [and] continue to use the old plan". My question is how does my company appoint a new trustee. In addition, can the plan be administered in house? Both questions assume that answers do not violate the IRS regulations regarding the continued operation of the SARSEP plan. Thank you in advance.

[This message has been edited by Scott L Brown (edited 07-06-99).]

Trustee paid 35,000 for ernst money contract on land as a plan investment. At closing there is a simultaneoues transaction to sell a portion of the land the proceed are used purchase the property. At no time is the property leveraged by either by intent or actually. Is this a prohibtive transaction? Any thoughts?

I have a plan where employees have transferred from a 'Union' Status to a Salaried, Non Union Status. Are contributions and compensation simply prorated for ADP/ACP testing purposes?

I have a client that wants to set up a non-§125 FSA, i.e., no discretionary contributions are made by the employee; the employer will merely reimburse funds up to a limit. The employer, however, wants to make $750 dollars available every 6 months rather than have $1500 available at all times during the year. While this would run afoul of the $125 regs., I know of no reason why we can't have these terms in place for a non-§125 FSA. Does anyone see a problem with this?

------------------

Charlie Stevens

Michael Best & Friedrich LLP

I read a previous questions requesting info on newsletters for end users. The recommendation was to look up Darkhorse Communications. I can not find a site for this name. Can someone help me with the site name and/or names of other sites where I can purchase quality newsletters to send out to my referral sources. Thank you!

------------------

Does anyone see any drawbacks to client's naming a private foundation set up by him as the beneficiary of his 401(k) account??

------------------

Does anyone see any drawbacks to client's naming a private foundation set up by him as the beneficiary of his IRA???

------------------

The ERISA regulations state that an hour of service, for participation, vesting, and benefit accrual purposes, must include an hour of service for which an employee received a backpay award. For participation and vesting purposes, no more than 501 hours of service need be credited for one continuous period for which the employee was not actively at work, in order to prevent a break-in-service.

At the same time, the same 501 hour rule appears to apply for benefit accruals, although the break in service rules are not relevant. Any thoughts as to whether same 501 minimum applies to benefit accruals?

------------------

There is an excellent thread on this subject "treatment of former employees" in the 401(k) Board. It was started by Charlie Stevens on April 19, 1999.

(Use the search feature to get to it.)

Should a CODA plan be designed(or amended) to comply with the Safe Harbor requirements? Or can it operate in diferent "mode" each year as long as proper notice is given to participants?

Also:

-What is the deadline for the notice

-Can anybody provide a sample notice?

fax: (818)992-6134

Thanx.

Existing PSP (or amended one) has plan year 01/01 to 12/31. 401(k)/401(m) provisions effective 08/01/99. For plan year 1999 can one consider for ADP/ACP testing only compensation from 08/01 to 12/31. Since the plan uses previous year NHCE deferrals it will help for next year HCE deferral since present yr NHCE deferral% will be greater. If yes, should plan docs provide for such? Can/must it be specified in the Adoption Agreement as a one time compensation definition for 401k/m provisions?

Thanx.

------------------

I am about to make an investment in a Sub S. Corp. The investment will consist of stock and a loan to the Corp.

Can my Roth IRA own the stock in this new Sub S. Corp? I will not be the majority stockholder. If this startup succeeds, I could be employed by the Sub S. Corp. in 2-3 years.

Thanks for your help.

Can a tax shelter annunity section 403(B) be part of a section 125 cafeteria plan??

If a house owned by a Living Trust is used at spouse's death to fund part of a By Pass Trust, would any income tax benfits be lost? In particular I am concerned about the ability to use the $250,000/$500,000 expentions from profit on the sale of a residence.

Thanks for any help with this question?

Wife is beneficiary of Husbands IRA. Living Trust is contingent beneficiary. IRA is in a single account at a broker.

Value of IRA is well beyond $650,000 estate tax exemption. Assets in Living Trust are only $600,000 of which half are applicable to Wife.

QUESTION:

Can Wife disclaim part but not all of IRA and thereby have the disclaimed part flow to the Living Trust and then into the By Pass Trust? Also Wwuld half or all of the disclaimed amount flow into the By Pass Trust. In the example given how much would have to be disclaimed to fully fund the By Pass Trust.?

Thanks for any help with this.

Bmorr

I contributed $4000 to Roth IRA for 1998 and 1999 around March of this year. It looks like I am likely to hit the $150,000 barrier for contribution eligibility by the end of 1999 (I am married filing jointly). Is it true that the best way to deal with the situation is to roll 1999 Roth IRA contribution over into 1999 IRA contribution? Is it true that I have to remove the proceeds from this contribution too? If yes, how do I compute the accrued interest/capital gains on the $2000 1999 contribution and separate them out from the interest and proceeds on the $2000 contribution for 1998? (The task may be nontrivial, since I already bought and sold quite a few shares on the account. What is the penalty for the rollover?

Any insight will be greatfully appreciated.

Alex

I'd appreciate getting names, addresses or contacts at firms which do audits of medical claims at TPAs for self-funded programs. What has been your experience or results with them?

------------------

Inquisative

As a correction for and ADP or ACP Test does the Bottom Up QNEC method need to be specifically stated in the plan document? The document I am using for this plan only states QNEC not Bottom Up QNEC. If so, can I restroactively amend the plan to the year that test failure occured? Any regulations that you may have would also help.

The defined contribution plan currently has significant balance in forfeitures. Plan document says "forfeitures may be used to reduce employer contributions.."

Plan expects results of VCR to require $100,000 payment to Plan (some of which goes to former participants).

Question: Can/should the VCR liability be satisfied from the forfeiture account? Any regs, cases, opinions greatly appreciated.