I've read the PLRs dealing with situations where an employer may make a restorative payment to a qualified plan. Under certain circumstances such a payment is not considered a contribution subject to 401(a)(4), 404, 415 and other requirements. The PLRs all seem to indicate that a genuine controversy must exist (threat of lawsuit, DOL investigation) What about when a plan sponsor knows of a potential fiduciary breach. May plan sponsor make restorative payment when no participants are aware of potential breach? Any thoughts? Thanks. Ed

IRA owner, age 62, dies in early 1999. Surviving spouse will be 59 1/2 in November 2000, before the end of the year following the year of death. SS would like to take penalty free death distribution(s) before 59 1/2 and then make it her own IRA before the end of 2000. Can she do this? In other words, does a taking a death distribution mean she has irrevocably elected to treat it this way?

SS does not want to start a 5-year substantially equal periodic payment plan.

Thank you.

[This message has been edited by Steve Palmer (edited 03-05-99).]

Client has stock available to employees and is seeking software to record ee name, date of purchase, cost of stock, etc. Does anyone know if such software may be available in the marketplace?

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We have a cafeteria plan that allows pre-tax employee contributions to pay premiums for third-party health insurance policy. The cafeteria plan also has a flexible spending arrangement to reimburse proper medical expenses not paid for under the health insurance policy.

Election forms under the FSA must be submitted by 4/30/99. At some later date, we anticipate that we will change to a different health insurance plan that carries a lower premium, but requires greater employee payment of expenses (i.e. higher deductibles and co-pays).

I believe the new "cost changes" reason under the '97 proposed regulations for making an election change allows an across the board adjustment to the amount deferred under the cafeteria plan for the lower premium under the new health plan.

The question is whether employees can make a mid-year change to increase FSA deferrals. The "cost changes" rationale would not seem to apply because that deals with an increase or decrease in premiums for a third-party health insurance policy.

I question whether the "coverage changes" provision of the proposed regulations (or any other proposed or temporary regulation) would allow a mid-year change of the FSA because the "similar coverage" actually would be provided under two plans - the new health plan and increased FSA deferrals.

Any thoughts would be appreciated.

Is anyone aware of a proposal system that would be compatible with Quantech?

The 415 limit is a personal limit by employer. As long as your guy owns a certain percentage (I think 50%, but I'm not sure) of the Corp., then for 415 purposes it's the same entity as the Sole Prop. and the service could count. You should be careful with the DB accruals because the 415 $ max (130,000) still requires 10 year PARTICIPATION in the DB plan to get it.

Are stepchildren considered "children" under the definition of "family member"? There is a specific reference to "adopted children" being considered "children", but i cannot find any reference to stepchildren?

If the employer contributes 3% can HCEs defer $10,000, or are they stuck with the 125% of NHCE percentage? The 3% does not push the HCE over 15%.

Thank you.

An employer would like to establish a nonqualified deferred comp. plan for an executive, with a 10% of annual comp. deferral. However the employer would like to allow for an additional deferral of a "bonus" in the first year of the plan, in recognition of the executive's prior service to the company. Provided that the deferral election is in place prior to receipt of the bonus and the bonus is subject to the withdrawal conditions that apply to regular deferrals (i.e., term. of employment, death, disability, etc.) does this pose a problem?

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My employer gives the employees their 401(k) employer contribution match usually just once a year. My question , Is the employer restricted to a time limit as to when to deposit such funds? I am guessing the limit to be either 6 months or 1 year but I really don't know. Thanks

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http://www.geocities.com/CapitolHill/Congr...2077/links.html

Can a non-individual be an owner of a Roth-IRA? What are some examples? Can a corporation, trust or Custodial entity be an owner of a Roth IRA?

We have cleaned up our plan, processing automatic distributions for those participants with less than $5,000 in the plan. The only problem is that some of them were terminated 4 years ago and have not given us a forwarding address so all of their statements and money are coming back to us. I've tried people searches on the internet with no luck. Is there a way to find them? Are we responsible for finding them? What happens if we can't find them? Should the money be put back in the plan?

At the beginning of this year, our company bought a small company of about 60 employees. The employees of that company currently have a 401(k) plan that they will continue to contribute to until we merge their plan into our plan. When we bring those employees into our plan, will we have to terminate their current plan? I need some guidance as to how to go about this.

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Julie

Some Blue Cross Blue Shield health insurance carriers have demutualized over the last few years and have issued shares of stock to corporate policyholders in the process of converting to stock ownership. Has the DOL issued any rulings on whether that stock is a welfare benefit plan asset that must be sold and used for future benefits or whether it may be retained by the employer as a general corporate asset?

Had an audit today of a one-man MP Plan in the SF Bay area. Never had an EZ audited.

Anyway, the auditor (nice lady, like all SF auditors) raised, to me, a really curious issue. My client is 65+ and has begun distributions. She wanted to know where in the plan it said that he could begin to receive distributions, unless he was "retired".

My initial reaction was "What the hell are you talking about?" except, the document really doesn't address (by my cursory reading) the issue flat out. It talks about when terminated people get their benefits, disabled people, dead people, etc., but doesn't specifically say a person, still employed past Normal Retirement Age may elect to begin receiving benefits.

It felt like arguing "Show me the air, and I'll believe it's keeping me alive". I mean, it's a retirement plan, but "retirement" isn't defined, but Normal Retirement Age and Date are (or course).

Anyone else feel that you actually have to quit working and shut down your business to begin receiving benefits?

Can you imagine trying to defend a practice of not paying a rank-and-file guy against the DOL unless he quits?

We never did agree on the subject (closing letter will be some weeks) but, I argued, the whole document is about getting benefits, and only the special cases when they can be delayed are addressed.

BTW, it's a prototype from a big Illinois company with some smart people working for them.

Assuming a plan year ending 12/31/98, what is the latest date the Top Heavy minimum contribution must be made to avoid plan disqualification?

Can someone provide a cite?

What do I do if a potential new client decides 4/1/99 to set up a new 401(k) plan and wants to use safe harbor provisions? Does the fact that notice was not given by 3/1/99 preclude the possibility of such a plan for the calendar year 99?

Can you tell me if I will suffer the 10% early withdrawal penalty if I take out money from my roth IRA to help pay back a graduate student loan?

Does anyone have a more recent table of the safe harbor definitions of compensation other than the one published March 14, 1994 in Pension and Benefits Week? Thanks

Company A, B and C are related companies. Company D is not related. Company D leases employees to Companies A, B and C (no payroll for these 3 companies).

Companies A, B and C would like to merge their 401 (k) Plan with Company D. Would this create a Muliple Employer Plan?