I am curious to know how most practitioners handle the calculation of a participants lump sum benefit. One method is using the participants age nearest birthday and discounting at the applicable interest rate based on the number of full years prior to age 65. Another method is to discount by the exact number of years and months the payment preceeds NRD. Generally the plan document is silent and only calls for the lump sum to be actuarially equivalent.

Any thoughts would be appreciated.

Employee in a DC plan mistakenly had after-tax dollars withheld instead of pre-tax. What implications if we want to convert after-tax to pre-tax dollars in 1999?

Are there any rules/regulations/etc. regarding what type of investments (i.e., cds, mutual funds) are suitable for 457 plans? Are there any rules/regulations/etc. which indicate that certain types of investments are prohibited in 457 plans?

When responding, cites would be helpful.

Where can I find articles/info on how employees can benefit from not rolling over shares of employer stock from a qualified plan? Is there a provider out there that has published anything on this which is available?

A company is freezing it's DB plan and enriching significantly the match and vesting schedule in the 401k. There are some older participants who will be adversely affected by the change, but the vast majority of the workforce is younger and will benefit greatly from the changes in the 401k. Does anyone have advice concerning the communication of this change?

Company A is to be acquired by company B effective 10-1. Company A is going to terminate their 401(k) effective 9-30. The 401(k) plan allows participants to defer a portion of their year end bonus(within 2 1/2 months after plan year end)which would be paid in November. If the plan is terminated 9-30 can the participant's bonuses be deferred if they execute the deferral agreement before termination since the bonuses are attributable to services during the plan year? Or, would the plan have to remain active to have this option? Thanks

I'm a retirement plan consultant with no actuary experience. So, when I heard this question from one of our advisors I wasn't sure if he had his facts straight or if it was actually possible. Here's what he told me:

For a mom and pop company with no employees the husband earns the majority of the wages and pays the wife $400/year. She is 55 years old. They are looking to set up a DB plan--the advisor is telling me that the TPA says that the contribution for the wife will be ~$9,000/year. He says the "De minumus" rule under 415(B) allows for this.

Is this reasonable? What is largest DB contribution that most that a 55 year old person making $400/year could get? Thanks for your help.

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

I recieved this in the mail today from my HR person:

When you were hired, you were notified that a weekly employee contribution is requried for the group medical/dental coverage. We have recently discovered that group medical employee contributions are not being deducted from your paychecks. It is now necessary to retroactively make deductions to cover your contribution for your medical insurance. Your insurance when into effect June 30, 1997. The total retroactive amount is %582.30, you will see retroactive deductions of $16.60 over the next 58 weeks, along with the normal by-weekly deduction of $16.60. We regret any inconvenience this may cause.

Do I have to take this ? It doesn't seem fair to me. I do not work in the main office, have never recieved any benefits counseling, I don't beleive anyone ever told me there were suppose to be weekly deductions, it seems like they screwed up and now I'm getting dinged.

As a general rule our Trust Department does not accept ESOPS. We have an opportunity to Trustee what seems, on the surface, to be a good plan. Can anyone point me to a resource where I can find a thorough, yet concise summary of Trustee liability with respect to ESOPs that could be used to help upper management understand and assess ESOP Trustee risk?

I just got in a form (6610) from IRS for getting a certification from them that my IRA customers are US citizens so that we can get back taxes withheld by foreign governments on dividends paid by foreign corporations. The form and the publication that came with it do not seem consistent with IRAs. I was wondering if anyone else had some experience with these forms and some ideas on how to fill them out.

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

I converted about 4k to a Roth in 1998 and paid the 1/4 tax on my return. The investment however has nosedived and is worth about 40% of the original amount. Can I recharacterize the amount back to an IRA and then convert to a Roth again thus decreasing the taxable amount?

Can a participant under a cafeteria plan that offers pre-tax premium payment change health insurance from coverage under the HMO offered by the employer to the PPO offered when the premium costs for the two plans are different? (No Regulatory change in status has occurred) Also note that the plan year is April to March, but the period for changing coverage under the insurance policies is September

[This message has been edited by Amy Erlbacher Anderson (edited 06-11-99).]

Does anyone know of a web site to find industry averages for benefits in the construction industry?

Can a plan allow for rollover money to be withdrawn as a hardship distribution?

Back on 6/8/98 an employee took a loan and it slipped through at 7%, but should have been 9.5%. I'm sure we should go back and adjust it. Can we recalculate it and spread the additional interest over the remainder of the loan payments, or do we require the past due interesdt to be paid to-date? These or any other suggestions will be appreciated.

In reading the IRC regulations on controlled groups, the focus seems to be on 5 or fewer shareholders. In a situation where there are two companies and the ownership is identical, and you can meet the effective control test (5 shareholders who own 50%+), but you can not meet the controlling interest test (the group of 5 does not have 80% ownership), do you have a controlled group? I am getting confused with the situation of identical ownership (21 owners), but there are not 5 who meet the tests. Please help. Thank you.

This question has two parts. Has anyone heard of the fresh start calculation concerning after-tax contributions? How is it used? What plans could use it?

I have a plan that allows in-service withdrawals from the volunary post tax source but does not allow them from the mandatory. When calculating the taxable portion of the in service distribution should all post tax contributions be included in the calculation or only those associated with the voluntary source?

Thanks!

Must the plan pay for distribution fees or can the participant be charged the fee?

If a plan sponsor has an old 403(B) plan and a new 401(k) plan, must the 403(B) plan have a seperate trust from the 401(k) plan, or can they have one trust for both plans?

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

Rob Morgan

Pension Plan Administrator

Employee eligible as Part Time worker for Health Benefits under a quasi cafeteria arrangement. At same time, in school. Opts for Health coverage from school rather than from company. Graduates and loses school coverage. Can she pick up company coverage or does she have to wait for open season.