I am a Plan sponsor of a Profit Sharing plan

with a 401(k) feature for a small brokerage firm. The Plan is relatively

comlex including Mutual Funds (for non-vested monies), a self directed

brokerage account and our company's stock (privately held). We have some

concern regarding the certificates that are held for benefit of our Plan

participants in these self directed brokerage accounts.

We feel that we need to keep these physical certificates held in the

participants name because if the firm goes under we would have these

certificates and the Plan would be whole. We are protected by SIPC and we

have a fidelity bond for the Plan but how can we protect the Plan if the

firm becomes insolvent? Can we hold these shares in "street" name?

President Clinton is proposing prescription drug coverage for Medicare. Should Medicare coverage be expanded in this area? I believe the "average person" already assumed there was such coberage. (Similar comments apply to lont-term care.)

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

Ray Berry

Two companiies wish to merge. For a number of reasons they want to terminate one 401(k) plan prior tho the merger and distribute its assets. The remaining 401(k) plan would then cover the employees of the merged entity. As I read the successor plan regulations, if a termination takes place prior to a stock deal, then there is no successor plan problem because the control group for purposes of the successor plan rules is determined at the time of the termination. However, if the termination takes place prior to a merger there would be a problem because the same "employer" would then be maintaining another 401(k) plan.

Do other people have the same understanding? Isn't this a distinction without a real economic difference? What if immediately after the stock deal the company with the termnated 401(k) plan is liquidated?

What recourse under ERISA or otherwise would the sponsor or trustees of a defined benefit plan have against a plan participant to recover excessive distributions made to the participant over a period of several years? The plan has already stopped future benefit payments but is still considerably in arrears. Also, the participant initially notified the administrator that the payments were too large but the administrator ignored the advice and kept the payments coming.

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

Section 403(B)(12) provides that, for purposes of applying the nondiscrimination rules of that section, a plan may exclude "employees who normally work less than 20 hours per week." What does "normally" mean? For example, how do you treat a part-time employee who works more than 20 hours some weeks, and less than 20 hours other weeks?

A company that maintains a self-insured medical plan (with stop-loss) wants to encourage certain employees to accept early retirement. To that end, the company will offer certain employees who are 60 with 30 years of service retiree medical.. Is this a 105(h) problem? Thanks. Ed

I received this message in my personal e-mail. Any Marylandites willing to give it a shot???

My boss told me 2 days ago he is taking the next 8 days off of work. He is

a surgeon. This means if he is away, I can't work. The whole O.R. staff

doesn't get paid! What are my rights? I was hired as a full time employee

40 hours a week. Can we collect unemployment for that whole week? We

can't use our sick time. And I'm not planning on taking my vacation until

the end of August when I fly to California. This is very frustrating, had I been given notice I would have arranged my trip around the time my boss

was away. Where can I find these questions out at? I live in the state of Maryland.

A company of 14 employees wants to establish a short term disability plan. Currently they have unlimited sick days a an LTD plan after 6 months. The President wants to do the right thing for his employees. What is the standard for a small business? Any suggestions on a plan?

Thank You for your response - Kathleen

I have a client that wants its KSOP to borrow money from a bank to allow the KSOP to purchase additional employer securities. Once those employer securities are purchased, the loan would be paid back with a combination of employee deferrals and employer contributions (that is, employee deferrals would be used to purchase the employer stock from the KSOP such that the stock would be allocated to the participant's account and the cash would be used by the KSOP to repay the loan). The employer does not want to repay the loan only with employer contributions because the employer sees this as unfair. Is this OK?

is there a place to get the 30 yr Treas const. maturity rates? ASAP ASAP has a nice summary but was last undated 3/15/99.

A 401(k) plan provides for participant-directed investments. One of the investment options is an employer stock fund. The employer stock is bought and sold on the open market. There is a trading fee of $35 per transaction for purchases or sales of employer stock within the fund. Is there any reason why this fee cannot be charged directly to the account of the participant who directs such a transaction?

Does anyone have any experience with affiliated service groups in an audit or a PLR?

We have a client that is a surgical practice (C corp) owned by 13 doctors. The corporation provides medical services to the general public and day call services to all area hospitals (they bill the patients, not the hospital).

12 of the doctors have formed an LLC which will provide trauma call services to patients of one hospital. The LLC will receive a flat monthly fee for daytime trama services, and this will be the only compensation to the LLC for daytime trauma call. It will bill the patients directly for nighttime trauma services. The only other employees of the LLC besides the doctors will be leased from the C Corporation and used for billing. The LLC will not have a new location.

A few patients would receive services from both entities.

We are concerned that if the LLC elects to be taxed as a partnership, attribution rules will cause the new entity to own most of the C corp. (the new entity will be deemed to own the individual doctors' shares of the C corp.) If we do have some cross ownership then we have to deal with the A-Org test of the ASG rules. Neither entity provides services to the other, so that's not a problem. We think the problem will be if the two entities are seen as regularly associated in providing services to third parties.

We think that if the LLC elects to be taxed as a C corp. then we'll have no cross ownership since the attribution rules are different for C corps. BUT the additional FICA cost will be substantial.

We would appreciate any help we could get on this.

Can a defaulted loan be used to satisfy a 70 1/2 minimum distribution for a terminated participant? Any regulations you can reference would also help. Thanks!

I had a rocedure performed in Septmeber 1998. I got my bill in 1999, after the insuracne comanies haggled over who was primary vs. secondary. Can I receive reimbursement in 1999?

Now that traditional "security" employee benefits are viewed as basic compensation by today's employees, how important are Miscellaneous Benefits Programs to corporations and employees.

Is this an effective vehicle to attract and retain quality employees?

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

I work for a small company. I was up for review this last April (my 4th year). I was supposed to have gotten a 2.5% raise (at least) but my boss said he couldn't because the budget was tight. I asked him to at least increase my vacation and sick time to 1 more week. He said he'd review the industry average. I checked with him this week about his 'research' and he said that it is normal to get 2 weeks vacation time and 1 week sick time until after you've been with a company for over 10 years. Is this true? does anyone know? I'd appreciate all your comments on this matter!!!

Over the past few months I've seen several individuals mention a DOL information letter from early 1998 clarifying that 403b plans don't need to attach Schedule A to the Form 5500 filing. I haven't found the letter. Can anyone direct me to the letter being referenced?

A plan sponsor's intent has always been to exclude collectively bargained employees and non-resident aliens from plan participation. Plan sponsor is a controlled group with two other companies whose employees are not allowed to participate in the plan. One company is comprised solely of collectively bargained employees and the other is a Canadian company where all employees are Canadian citizens.

Plan sponsor uses a standardized prototype, which has check boxes for these statutory exclusions.

Unfortunately these checkboxes were left un-checked in the adoption agreement. The plan document is being restated to another standardized prototype (provided by new investment carrier). Is it OK to check the statutory exclusion boxes in the new document? Or is this an illegal cut-back of rights, benefits and features?

Thanks for any help.

Please forgive me for posting this question twice but I really need some help!

Facts: Company A acquired the stock of company B and the two are in a parent-sub relationship (Company A is parent, company B is subsidiary). Both company A and B have their own 401(k) plans.

Question: After the stock acquisition took place, can company B terminate its own 401(k)? Or, would a termination be a sort of "de facto" merger of the two plans?

Follow up questions:

(1) What if company A acquired less than 80% of company B's stock? Does that avoid the required aggregation rules such that company B can now terminate its own plan?

(2) What if company B has an ESOP that owns 30% of company B's stock and company A owns the other 70%. Does the ESOP prevent the application of the required aggregation rules thus allowing company B to terminate the 401(k) without it being a defacto merger of the plans?

Thank you very much for your assistance.

Charles Griffin

Raleigh, NC

Facts: Company A acquired the stock of company B and the two are in a parent-sub relationship (Company A is parent, company B is subsidiary). Both company A and B have their own 401(k) plans.

Question: After the stock acquisition took place, can company B terminate its own 401(k)? Or, would a termination be a sort of "de facto" merger of the two plans?

Follow up questions:

(1) What if company A acquired less than 80% of company B's stock? Does that avoid the required aggregation rules such that company B can now terminate its own plan?

(2) What if company B has an ESOP that owns 30% of company B's stock and company A owns the other 70%. Does the ESOP prevent the application of the required aggregation rules thus allowing company B to terminate the 401(k) without it being a defacto merger of the plans?

Thank you very much for your assistance.

Charles Griffin

Raleigh, NC