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

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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?

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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.

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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?

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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.

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.)

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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.

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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.