Can a participant of a 401(k) plan receive a lump sum distribution while on a layoff and still retain their recall rights and original seniority date with their employer?

If an Employer allows for Eligible Employees to make an Irrevocable Election not to participate in the Employer Sponsored 401(k) Plan, may the Employer disregard those Eligible Employees, making the election not to participate, from the ADP testing?

And....assuming that more than 30% of the eligible employees make the election not to participate, does this create a problem with the participation percentage requirement?

Would like some ideas and input. Recently did a plan with 8 companies had to use 2 plans because of partnership issues. No partnerships in current situation and would like to use one plan. Any comments pros and cons welcome. Am meeting with a commitee therefore all viewpoints would be appreciated concerning different matches and classifications of employees, etc.

Is anyone familiar with the process of reinsuring charitable gift annuities issued by 501©(3) organizations? If so, what are the major compliance issues related with these transactions?

We have a new client and they can't remember if they filed the 5500-R form that was due 7/31/98 for their plan year ending 12/31/97. Is there a number at the IRS that can look this up or will this send up a red flag? Any suggestions for find out if the form was filed?

A number of companies are selling debit(Visa) cards that allow a FSA participant to pay for medical expenses at POS. The IRS has said "no way", unless someone can assure them that the card is being used for legitimate expenses and not to buy lawn chairs at CVS. I have a number of questions:

1. Is anyone currently using this type of card?

2. Do you agree with the position of the IRS?

3. Can the charges be validated at POS? Will current technology allow this?

4. Will these cards help reduce administrative costs?

I have a client with a money purchase and a 401(k) plan. When two (2) newly hired doctors became eligible for participation in the retirement plans, both doctors signed waivers foregoing their rights to participate in the retirment plans.

Several years passed and now both doctors have become partners in this LLC and would like to participate in the retirement plans.

Can these two (2) doctors begin participating because their status changed from employee to owner? Or, Does the waiver eliminate them from ever participating in a retirement plan sponsored by the employer?

Can someone give Reg cites that I can look up with regard to Irrevocable Waivers and there effects on participants?

Is it possible to contribute to a ROTH via a Whole life insurance policy if my AGI is above the limit?

I have a question concerning multiple employer plans. I am the recordkeeper for a group of companies with common ownership as follows:

Company A John Smith 100%

Company B John Smith 100%

Company C John Smith 70%,Jane Doe 25%

Company D John Smith 75%, John Jones 25%

Company A was the original client, and branched off last year into the other related businesses. For testing last plan year end, I grouped A and B together for 415, ACP & ADP, etc. and tested C separately. I was told by John Smith that D was not participating, so did not collect any information on them at all. For this plan year end (4/30) I am having renewed concerns about excluding Company D. Since C and D do not constitute a control group (<80% common ownership) is it OK for the companies to exclude D, or is there something I should be aware of?

I have noticed it is very hard to find specific information about the testing of multiple employer groups, especially when no union is involved (as is the case here) and when the pairing does not all constitute a control group.

Are there any laws requiring an employer who offers only one health/dental plan to have an annual open enrollment? When would an employee who wants to add or drop dependents do so without an annual open enrollment? Are decisions about open enrollment governed by the IRS, the employer or the insurance carrier?

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Marlene

Does 415(e), which has been repealed eff. for plan years beg. in 2000, need to be considered for 1999 for an ongoing plan? Do any IRS guidelines exist?

Company's practice for DC plan is to pass the 410(B) coverage test for

controlled group, then apply the 401(k) discrimination tests separately. Company indicates on Form 5500 that it is mandatorily disaggregates. Company defines plan as ESOP (not leveraged), participant directed and 401(k). Former ESOP in existence in 1977 merged into 401(k) plan several years ago. Employer pays match in Employer stock.

What is mandatory disaggregation? What is its purpose? Is this an

exception since ESOP existed in 1977 and is now merged into 401(k)?

I have a plan that wants to include the

investment option of "any stock of participant's choice". Then 2 HCE's want to purchase a retiring partner's

Employer stock with part of their 401(k)

money. Would this be permissible? The

retiring partner would not sell this

stock to any employees other than the

two HCE's.

The following was taken from a recent edition of "Educated Choices" (Vol.8,No.1), a retirement benefits newsletter that addresses fiduciary responsibility. It states: "ERISA dictates the duties, responsibilities and liabilities of only those fiduciaries working in private schools, colleges and universities. Those who work in church organizations or the public education sector are exempt from ERISA rules. Who then has the fiduciary responsibility on the administration of a self insured group health plan for a junior college? Who then is libel if ERISA rules are broken or exceptions are made? Or is this information relating only to retirment plans/savings managenent?

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I have a client who transferred assets from a Traditional IRA to a Roth IRA prior to December 31, 1998. He is presently single but will be getting married in the very near future. He transferred the money to the Roth IRA so he could have access to the funds for a down payment on the purchase of his first home. His future wife has an existing home. QUESTION #1: If he puts his name on the title of his future wifes home (after they are married) will he still be able to access the money is his Roth IRA to purchase a home? (He plans to make this purchase in five years if that matters.) QUESTION #2: Can you "borrow" against a Roth IRA, or is it considered a distribution and how is it taxed or penalized?

Thanks for the help!!

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Hi Everyone,

Need some input on this one.

I am aware of a case where a husband and wife were each named as reciprocal primary beneficiary on each other's IRA with their adult children as contingent benficiaires on each. The IRA's are

Trusteed by a bank headquartered in Delaware with the domcile residence of the decedent couple in Florida.

Husband and wife were killed in an auto crash in Florida and experienced a Simultaneous Death. This was stated on the Death Certificate issued by the Coroner in Florida. Their Estates are being probabted in Florida.

The Delaware based Bank will not pay to the contingent beneficcaires and insists on paying only to the Estates of each of the Deceased claiming that Simultaneous Death Law in Delaware prohibits payment of these proceeds to anyone other than the Estates under this circumstance.

Other IRA's and insurance policies held elsewhere were successfully paid to the contingent beneficiaries.

My understanding is that most states

provide that as a result of simultaneous death the decedent survives his or her beneficiary. In that case the proceeds would be payable to the contingent beneficiary(ies)of the assets.

Why is this situation a problem?

1. The Attorney in Florida handling the estate is avoiding the research in this matter. Not interested in challenging.

2. These IRA assets if paid to the decedent's estates and not the contingent beneficiaires will be the only income generating estate assets neccessitating filing of an Estate Income Tax Return and taxation at potentilly higher rates than the contingents as individuals.

3. Access to state by state law in this matter has been difficult to locate.

Looking for your thoughts.

Have a client with a existing 401(k) plan. he will be moving all his employees into a leasing company arrangement so all the employee tax reporting etc. will be handled by the leasing company. I'm thinking that my client should term his 401(k) because they all want to be in the leasing company 401(k). I do not know if the leasing company has a multiple employer plan or if my client (soon to be former!) will be a co-sponsor of the plan or exactly how the leasing company plan will "cover" employees working for a recipient. This situation seems to be occuring frequently with the increased popularity of the leasing concept. I wonder what other questions to ask and if they should term their existing plan? Anybody already resolved these issues?

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What is the most commonly used practice in determining the effective date of a benefit change request in a qualified life status event? Current regulations state the effective date can be as early as the date of the event or not later than the first of the month following the actual receipt of the enrollment change request as long as it is within the 31 day grace period.

An employer wishes to set up a retirement plan with a large brokerage firm and the brokerage firm has different minimum investment limits for various perks. For example, the brokerage firms requires $20,000 to have a "personal advisor" assigned to that account. If the employer creates a retirement plan that uses this brokerage firm, will the employer runa afoul of the discrimination rules? Assuming that the plan itself is open to all employees, and all employees can invest with this brokerage firm, but the only difference being that higher paid employees will probably have the $20k to be able to obtain a personal advisor. The *type* of investment choices (i.e. mutual fund families etc) will be the same for everyone.

May an ESOP borrow money for any other purpose than the three uses (a) to acquire qualifying employer securities; (B) to repay the loan; or © to repay a prior exempt loan? For example, may an ESOP borrow money to invest in something other than qualifying employer securities?