A 73-year old owner-employee establishes a profit-sharing plan on 12/31/98 with an effective date of 1/1/98. The initial Plan Year contribution is not made until 3/15/99. What,if any,is the minimum distribution requirement for this owner-employee for 1998?

Thanks for any assistance!

In determining ownership, are shares owned by participants in an ESOP considered? For example, if a company stockholder owns 10% of o/s stock and then is allocated an additional 5% in the ESOP plan, is he considered to own 15%? Do voting rights have any effect on this?

Rev.Rul. 98-1 Q&A7, Step 2, if ret age<62: in general sections 415(B)(2)(E)(i) & (v) require the $ limit is the min of that calculated using plan interest & mortality (or tabular factors) and that calculated using 5% and applicable mortality. 415(B)(2)(E)(i) says to use the greater of plan rate and 5%. Where does 415 mention the calculation usiing plan factors? If the plan interest rate is 7%, it looks to me that this equivalence should be calculated using 7% and the applicable mortality table with not calculations using plan factors. Can anyone clear this up?

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Michael Spaid

I'm looking for the total dollar amount US companies spend annually on tuition reimbursement plans--not company-by-company, but all companies in the country as a whole. An estimate will be fine, as I don't think anyone systematically collects this information. I've checked with the BLS--couldn't find anything on their Web page and my phone message is as yet unanswered (although it hasn't been *that* long!). Any thoughts about sources for this bit of information? Thanks!

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Jim Vaseleck

Is there a deferral limit on contributions to to Health Flexible Spending Account? I know day care is limited to $5,000, but I can find no limit on heath care. Thanks

For health insurance and life insurance, can an employer co-pay at higher levels for the highly compensated group than for the non-highly compensated group? For example, can the employer co-pay 100% of health and life insurance premiums for vice-president and above and 50% for all other employees? What effect does this have on discrimination?

What practical solutions are there for the following situation? Buyer is buying all of the outstanding stock of a corporation, most of which is held in the ESOP. After the closing, the ESOP will hold cash. However, the plan, as required by 409(h), gives participants the right to demand their distributions in the form of employer securities. How can the plan eliminate the right to receive employer securities without violating 411(d)(6)? The new employer does not want to make the one-time offer to demand employer securities on a termination described in 1.411(d)-4, Q&A-2(B)(2)(iii). It just wants to terminate and distribute cash.

Regarding withdrawals from the Roth IRA for education, is there a repayment stipulation in the tax code?

I converted a non-deductible traditional IRA to a Roth IRA in Jan 98. This year, I received a 1099R from my account with the total account value as the disbursement. The question is: am I only liable for the difference in value between the total amount minus the actual contributions? How do I clarify that on the tax forms?

Employer A owns several subsidiaries, none of which are covered under A's plan.

Not surprisingly, even after throwing out several acquisitions under the transition rule and checking all of the eligibility rules, the plan doesn't pass coverage under the 401(k)portion or the match portion.

Any thoughts as to correction methods (still within 9 1/2 month period)?

I have not tried (yet) any average benefits or non-discriminatory classification testing.

Thanks.

A colleague in New York would like to know how to handle a case of employment being terminated and the ex-employee inadvertently was not informed of their COBRA rights, but the insurance

was canceled as of the date of termination (3+ months ago).

I would direct the employer to reinstate the insurance back to the date

of cancellation, up to some future date - say, the end of this month .

Then immediately mail the COBRA info stating insurance will be canceled

as of end of the month. Is this the path you would take as well?

(Self-insured plan, employer is in NY state.)

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According to the Wall Street Journal, Fidelity has decided to allow the beneficiary of a decedant's IRA designate their own beneficiary on the account in order to allow the assets to coninue on in tax-deferred status. I am assuming they mean that the second beneficiary would continue to take distributions over the life expectancy of the first minus one for each year that has passed but the article doesn't state that.

It was my understanding that it is trust law and not tax law which prohibits changes to a trust once the grantor (origianl IRA holder) has passed away - they created the trust agreement and once they are gone, no changes can be made???

Is anyone else following Schwab and Fidelity in doing this? Any ideas on why no one has done it in the past but now it's ok? Has something changed or are they just getting bolder and more aggresive?

I am working with a client that has a blended fund. The fund is made up of about 5 different component funds. Can the aggregate fund be listed on the schedule G or should the components be listed. What will an auditor and the IRS be looking for? I believe the fund is made up of seperate invement accounts from an insurance company and an outside registered fund. Did the blended fund need to be filed with the DOL or some other agency? I am new to this type of arrangement any direction or IRS/DOL regs. would help.

Thanks!

I am interested in general information related to the cost of educating plan participants. I am trying to develop a pricing matrix to be used to analyze a teams cost. Are others charging for the use of educators? Can travel exenses be passed back to the client? What about ongoing education meetings with a company?

Help. My marketing department is putting together something on IRAs and wants to reference the first tax year for which you could have made an IRA contribution and what law created them. I'm drawing a complete blank - I've been in the business for 14+ years and they've been around as long as I remember - I know I should know this but don't.

Can you help, please? Thank you in advance,

Kathy

Is anyone processing plans with greater than 5,000 lives on Quantech. We have a prospect in this range and want to know how other firms are handling plans of this size. Please send me an email if you have experience in this area.

Chris_Hammond@rsmi.com

Thanks!

I have seen information implying that a $10,000 distribution from either a qualified plan or an IRA is exempt from the 10% excise tax penalty for early withdrawal (pre-age 59.5),if the funds are used for first time home purchase by a qualifying individual.

Other information implies that such a distribution is exempt only if it is made from an IRA. Which is correct?

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Vic

If the owner takes his assets out of a straight profit sharing plan (67%), does this qualify as a partial plan termination? are there any other negative aspects of this move that I should be aware of? tx!

In this still pre-GATT era, does anyone have any idea whether a 1963 George Buck mortality table is "reasonable" in the context of a standard termination? Would you clearly get a notice of sufficiency from the PBGC if you employed that table? It is the table employed to calculate lump sum amounts under the current plan document.

My client in New York state, has 20 year employee that had heart attack at end of December. In hospital until begining of March, left state for rehab in Michigan - to date. I suggested they use up vacation and sicktime then implement the FMLA for 12 weeks then go on COBRA. Also, health plans are contributory. No payments have been made since last paycheck in February. Please advise - quickly. robkt