Plan Participant, 5% shareholder in C-Corp, will be leaving Company A to become LLP Partner in Company B. Needs dough to fund his share of the new Company B.

We plan on starting a new 401(k) Plan in Company B, which will accept rollovers (termination distributions). Since my guy will now be a partner in the LLP, is he barred from borrowing his rollover money?

He can borrow it before-the-fact right now..... It would just be cleaner to borrow from the new plan vs. the old.

Because it is rollover money, I don't think it's quite analguous (sp?) to the situation where a C-Corp stockholder becomes an S-Corp shareholder.

ERISA preemption aside, are you aware of any state laws that mandate an acquiring entitity to provide certain benefits to a target's transferring employees for certain periods of time after an acquisition? My question arose in the context of California law, but my review has not yielded anything obvious. I am uncertain of whether the reference applies to asset deals and/or stock/merger deals.

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I am reviewing distribution forms prepared by a TPA for a Money Purchase Pension plan and the forms do not include any explanation or waiver of the QPSA. I have always been under the impression that if the participant and spouse wish to waive the QPSA and designate a nonspouse beneficiary under a money purchase plan all of the notice and waiver rules must be met. In looking back over the 1.401(a)-20 rules though I see that a QPSA in a defined contribution plan is considered "fully subsidized". A-38(B). Also, A-35(a) could be read to say that no written explanation of the QPSA is necessary as long as the QPSA is fully subsidized. On the other hand A-37 seems to clearly require proper notices where the plan allows the waiver. Would appreciate any comments from anyone who may have delved into this lately. Thanks.

One of the assignments I've been given is to establish a PTO program for my company. As I understand it, this includes Vacation, Holidays, Sick Pay, and just about anything else that has to do with paid time off benefits for an employee. Can you explain a little bit more about these types of programs or possible direct me to a publication or internet link? Thanks!

Has anyone had the chance to review the recent (3/22/99) ruling in Lyons v. Georgia-Pacific Corp. Salaried Employees Retirement Plan? It seems to contradict everything I've ever thought about calculating lump sum benefits under 417(e). In a nutshell, the court has said that 417(e) must be followed only in involuntary cashout situations -- it does not have to be followed if the participant has a choice between an annuity and a lump sum. Any reactions out there? Is anyone taking this ruling seriously?

Two employees of the same employer who are unmarried and who both have health FSAs for unreimbursed medical expenses have had a child and would like to use the father's FSA for reimbursement of medical expenses associated with the delivery. However the mother is not the father's legal dependent. Although it would seem natural that the mother's health FSA be used for this purpose she will need to use all of her benefits to cover the cost of unrelated surgery following delivery. Is it possible to treat the delivery costs as pertaining to the dependent child so that the father's FSA can apply? I am concerned about possible charges of discrimination on the basis of marital status (unmarried), if this is not possible.

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a plan uses fractional unit credit plan. Except that it is integrated by cov comp. it seems that someone making more than cov comp can accrue more than 4/3 of the benefit someone else would. does this seem like a plan that doesnt meet accrual rules or does anyone have an observation about this type of plan?

I have been denied access to the Vacation Donation Bank established thru negotions with my employer, a County government. Others have been granted benefits under similar circumstances. Do I have any rights?

A client of mine wants to transfer his IRA from Bank A to Bank B. He is over 70 1/2 and began minimum distributions several years ago. Bank A will not transfer the account to Bank B without giving him the minimum distribution for 1999, even though it is not required to be made untill 12/31/99. What is Bank A's authority for this? Thank you.

My understanding is that the employer's required match on a SIMPLE IRA plan must be dollar-for-dollar on the 1st 3%, but can be reduced to no less than 1% in any two out of five years. If this is correct, I have two questions. 1) Can the employer use the 1% match in the first year? 2) What happens, if anything, if the employer uses the 1% for the first two years then terminates the plan?

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What are the distribution rules for a 403b plan with pre and post 1989 contributions in a comingled account?

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Bradlarsen@Adelphia.net

A plan changed it's vesting schedule effective 1/1/98, amendment adopted 8/15/98. The schedule was changed to a quicker more lenient schedule. What happens to the terminated participant who was terminated 6/15/97, but not paid out until 9/14/98? Must he get more of a distribution based on the increased vesting? or since he was terminated in 1997 does his vesting stay under the old schedule?

I have found much information on going from favorable to less favorable schedule, but not alot on the reverse??

Any info would be appreciated.

thanks!

Would anyone consider allowing a hardship withdrawal for a participant who would like to build a garage for his disabled wife so that she did not have to be "subject to the elements" when getting to and from her car?

A Mercer publication reports that the IRS has issued a private letter ruling on governmental excess benefit plans, but that the PLR will not be released until mid-June. Does anyone have any detailed info about the ruling?

I'm confused about the exemption for disabled former employees on Group Term Life over $50,000. I'd like to know about ways to certify the disability, whether disability needs to be re-certified annually, and whether it applies to retirees or those on long term disability. The plan administrator is sending out a survey on this topic, but would welcome thoughts from any readers of this board.

I have been asked by a local Chamber to research the possibility of developing a multiemployer plan for their small business members. My understanding is that multiemployer plans are mainly for unions and trade organizations. Could a local Chamber establish a multiemployer plan for their members? Could a local Dental Society establish a multiemployer plan for their members?

If the answer is YES, are there any limitation? Thanks for the assistance!

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The field directive concerning cross tested plans (issued approx. March 1998) states that the plan must provide that the trustee be given written notification from the employer as to the amount of the contribution to be allocated to each group.

QUESTION: When must the notice be given and what authority is there on the timing of the notice?

How to restore long-term disability benefits after 24-month mental health cutoff, when there are prior undeclared physical disabilities, which, hopefully, should change the category of benefits.

I'm trying to find a cite that addresses deferrals from severance. I'm not sure if deferrals are allowed from severance pay received after the employees termination, since the participant is no longer actively employed. Any help would be appreciated. Thank you.

A dental plan that is part of a self-funded health/dental/flex arrangement excludes coverage for preparation of dental devices (crowns, dental appliances, etc.) in instances where the device was partially prepared (e.g. where impression for prosthetic device was made, or tooth prepared for a crown)before coverage under the self-funded plan began. Presuming that the prior work was covered by a group health plan and there has been no break in service for purposes of HIPAA, would the pre-ex. condition exclusions prevent application of these restrictions?

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