I thought this was resolved about a decade ago!

I just picked up a prototype DB plan that is funded with insurance. They are using a different mortality table for lump sum equivalence for males and females.

When I discussed it with them, they indicated that the Norris decision only applied to plans with at least 15 participants (this plan has three participants), and that they have a 1995 IRS approval.

Did I miss something? Isn't there something in the Code about this?

Meanwhile, I have to calculate a lump sum based on the terms of the plan document, which for now has a different mortality table for males and females!

What did I miss?

Is our adoption assistance program an ERISA welfare plan? I have not been able

to find any DOL advisory opinions on this topic.

Is our adoption assistance program an ERISA welfare plan? I have not been able to find any DOL advisory opinions on this topic.

I am looking for articles or statistics that can speak about costs over the past 3 0r 4 years.

Any help would be appreciated.

Can anyone give me authority for excluding nonresident aliens with no US earned income from ADP testing. I see that they are excluded from the definition of HCE under 414(q)(8), but I think that just implies that they are not considered employees for purposes of identifying HCEs and, therefore, there is no such thing as a nonresident alien HCE. In turn, that implies that a company’s nonresident aliens are NHCEs because an NHCE is an employee who is not an HCE. The ADR for all the nonresident aliens is zero and brings down the ADP for NHCEs.

I see two possible arguments if there is no cite directly on point. First, I am thinking 401(a)(4) is authority. 401(a)(4) excludes nonresident aliens from consideration when determining whether a plan is nondiscriminatory. Since satisfaction of the ADP test is deemed satisfaction of 401(a)(4), then nonresident aliens are excluded from ADP testing.

Second, under regulation section 1.401(k)-1(g)(4), the definition of eligible employee is an employee who is directly or indirectly eligible to make a CODA. The plan I am reviewing does not exclude nonresident aliens from eligible employees; therefore, nonresident aliens appear to be eligible. However, they don’t have W-2 compensation and therefore have zero compensation under the terms of the plan. It seems that they are not directly or indirectly eligible to make a CODA.

Can anyone help with authority in the regs, an IRS ruling or notice, improve my reasoning (well, that shouldn't be too tough).

Does anybody have a draft ruling request under Rev. Proc. 90-49 that I might be able to look at for style? Thanks. Ed

Recently had a plan brought to my attention that is top heavy and also provides that a certain class of employees is excluded from participation. The question is whether these employees who would otherwise be eligible to enter the Plan (over 21 and completed 1 Year of Service) but for their employment classification have to receive the top heavy minimum contribution. The top heavy regs drafted back in 1984 mention that employees barred from participating due to level of compensation (the old "excess-only" plan) or who are not electing to defer (401(k) plan) must receive the top heavy minimum; they don't mention employees in excluded classes of employment who are not participants. What are peoples' thoughts on this situation (admittedly pretty rare as most TH plans usually are of such small size that exclusions would probably run into ongoing 410(B) problems).

This is becoming more common. Plans with different elgibiity for 401(k) and Profit Sharing. Sceario is this. Top Heavy Plan: 401(k) entry is 3 months of service and Profit Sharing is 12 months. Both have quarterly entry. If an employee is hired in Dec 97 for a 98 plan year, would he need to have the required top heavy contribution?

Is there any reason why a SEP cannot invest in a private placement of stock in a community bank?

Is it permissable for an employer to withhold a final distribution for 3 months from the employee's termination date? If it is why is it so? Does the 60 day notice play into this type of restriction?

Can anyone please offer me guidance if a 457 plan can allow for loans?

Can you tell me if there are any rulings from the IRS on this topic and if so, where I could locate them?

Thank You

I have an IRA through my company's 401(k) plan. Its value is around 35K. I am planning to begin graduate school this fall and want/need to tap into the fund to supplement loans for expenses. My questions are:

Rolling this 401(k) to a standard IRA and then to a Roth IRA will not push me over the 28% tax bracket for income in 1999. So, I roughly estimate about a $9800 tax that will be due for converting this 35K IRA to a Roth. Is this correct?

Once this is converted, can I somehow withdrawl money from the principal amount for educational expenses and not have to pay the 10% early withdrawl penalty?

Who collects this 10% early withdrawl penalty anyway? The IRS, or the company the account is with?

If anyone can help, I would appreciate it.

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Matt

A company makes an annual 401(k) match in the form of publicly traded company stock. Currently, they value the stock based on the average market price on the day preceding the date of transfer to the trust. They are wondering what latitude they have to use other valuation dates--e.g., date that the Board approved the contribution, year end valuation date, etc.--and whether these valuation dates need to be reflected in the Plan document or other materials.

I'd be interested in any thoughts or experience out there!

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Can a participant under the "purchase of pimary residence" safe harbor borrow to buy property that home will be built on? Wants to amortize for 10 yrs.

Can anyone tell me which of the mutual fund companies (if any) are offering SIMPLE IRA accounts to individual SIMPLE IRA participants where the plan has been established with another institution?

Thanks.

Mac

A local CPA says various of his clients have been telling him that there is a dollar maximum on the amount that can be accumulated in an IRA. News to him, news to me. Anyone have an idea where this is coming from? My best bet is a life insurance agent or broker giving bogus advice, but I'd be interested in knowing if there's any basis for the rumor.

Thanks.

Mac

An employer fails to make the required top heavy minimum for 1997. Can this be corrected under APRSC, or will this have to go through VCR? Also, if APRSC correctable, what would the time frame be for making up this type of contribution? Rev Proc 98-22 examples seem to go both ways. Any help would be appreciated.

I will be involuntarily separated from my employer in the very near future. They are providing all employees with a separation (monetary) package upon termination; however, they are taxing ALL employees at the 42% tax bracket. This happened to me about 4 years ago when I lost my previous job to downsizing.

Isn't this separation package a sort of "penalty payment" by the employer to stop (former) employees from suing them, etc. Is there any type of legal action in process to either stop this awful taxation and/or to assist people to recover the lost tax dollars??

My brother voluntarily retired in January after 36+ years with his employer. Prior to making his (retirement) intentions known, he inquired about the possibility of an incentive package to encourage employees to retire early. The H.R. people said there were no plans to offer any such package to employees. In April, he learned that they have in fact offered such an incentive package to employees. Is it possible for him to still obtain this incentive package, since the H.R. people LIED to him about it??

I was downsized in 1995 after 25 years with a major company. Although I had enough company service to retire, I was not old enough. Now, my former employer is merging with another company. I understand it is my former employer's aim to FORCE all downsized employees to take their pension after they reach age 50. Apparently, they are not planning on offering the pension in a "lump sum," just monthly.

Can my former employer FORCE this upon us??