Employer started a 401(k) Plan a number of years ago. Since then employer started a number of other businesses that are members of the same control group but Employer failed to have the members participate in the 401(k) Plan. There probably is a 410(B) violation for 2 or 3 years. Any creative suggestions?

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Marjorie A. Rogers

Sutin, Thayer & Browne

Albuquerque, New Mexico

mar@sutinfirm.com

I am consultant to an insurance company. I have done businees with some of the agents for 5-10 years who know me and refer me to other agents, as well as to clients.

The insurance company has product which has an administrative arm to it, and they charge for administration. The fees are competitive so if I want the business, I know I will have to lower some of my fees, which is OK. The company calls it "recordkeeping services." We all know there is a world of difference between "pension administration", "employee benefit consulting" and "recordkeeping".

I am frequently asked, and not by the experienced salesmen, "why should we use your services when the Company offers their services?"

I have thought of a comparison chart, but does anyone have anything put together already? The scenario would be the same for a fund house administration or for a bank that does administration.

Obviously we stress the value of our personal service, we will be there for the client in 3 years, we are specialists, one on one relationship, etc., etc.

Thanks,

Steve

A client has a 401k plan (001)and a separate ps plan (002). Would I effectively merge plan 001 into 002 via an amendment. we have determined that we do not need to file a 5310.

Can the opinion letter date be entered on line 22b of the 5500? I heard that a plan is more susceptible to audit if line 22c is no and 22b is blank?

I know it is not logical to do this, but is there something that dictates that only pre-tax contributions can be accessed for the purposes of a 401(k) loan? If there is, what are the implications if loans have been granted & the after-tax money was included?

I know that the Simple 401(k) plans are not subject to the ADP/ACP tests. Could someone tell me what non-discrimination tests they ARE subject to? (i.e. the 415 limit).

I have a 401(k) plan at a company which was recently purchased. The original company was a subsidiary of a larger compnay. I am now an employee of the new company. Part of the acquistion was the dissolution of the old 401(k) plan. I have been told it could take 6 months to a year to roll my money over to my new 401(k) or an IRA. Can this be right? I should be able to move my money when I want. Thoughts?

The company I work for has a 6 month introductury period. After working for only 6 weeks I was diagnosed with lupus and my doctor requested that I go on 2 months disability to recover assuring me that my job status could not be affected. However, I just got a letter from the company to say that I was terminated and that they could do that as I was still in the introductory period. What can I do and what are is my legal position. What resources can I refer to

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Sorry this is out of the norm for this message board. If I gift stock to my church, can I purchase the same value of that stock on the day of transfer, or do I have to wait 31 days (wash rules). My intent is to receive a stepped up basis. Thanks ! !

A company which is a member of a controlled group terminates its 401(k) plan and distributes the accounts to participants. However, another member of the controlled group also maintains a 401(k) plan which constitutes a "successor plan" with respect to the terminated plan. Thus, the distribution from the terminated plan violates Code Section 401(k)(2)(B)(i). What, if anything, can be done to correct this?

An employee made a temporary waiver of a QPSA and then terminated employment. Under 1.401(a)-20, Q&A-35, must the individual complete a new waiver within the first year following his separation for the waiver to be valid? Any difference if first waiver was made within one year prior to employee's separation? Thanks. Ed

Have you heard whether the IRS will finalize the new Table I rates for GTLI with the July 1, 1999 effective date?

A small not-for-profit needs a 403(B) plan document and adoption agreement. Investment companies aren't interested in providing a document because the participants' money goes to a variety of investors. The not-for-profit is hoping to avoid the expense of going to an attorney or accountant for their document. Does anyone know alternatives to obtaining a document? I'd appreciate any advice.

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staceym@elmore-cpa.com

a plan credits hrs of svc based on actual hrs an ee is paid or entitled to payment. If a salaried ee works overtime, say over 40 hrs in a week, is he credited (for benefit accrual and vesting purposes) with all the hrs worked? That is, is he credited with the hrs above 40 also?

3 HCEs have $34,000 in contributions including $10,000 in elective deferrals & $9,600 match (match formula is 100% up to 6% comp). After returning $4,000 4k to pass 415 testing, discriminatory rate of match exists. Do regs allow returning less 4k to maximize match. For example, return $2,200 4k & $1,800 match, resulting in $7,800 allowable for each 4k & match. If regs allow, is it still a document issue?

I cannot locate a refernce that discusses the Scheudule C or SSA. Part I and Part III of Schedule A tie to question 25 of the 5500 and this 5500 Questions is not answered for a 403(B) plan. Part II deals with trustees and 403(B) plans are non-trusteed. Thus it seems that the Schedule C is not needed. Is this true? Is there an IRS or DOL reference on this topic?

Alas, it seems that that the SSA would still be required. Does anyone have a reference that states SSA's do not apply to 403(B) plans.

When do the affiliated service group rules (414(m)(2))come into play when you are dealing with service organizations such as law firms? We have a situation where law firm A is opening a new law firm B; ownership in B is 50% by firm A, 25% by unrelated individual, 25% unrelated individual. The firms will not refer business to each other. I thought there would be no affiliated service group issue, but an example on some materials I have makes me question that since there is ownership between the two.

this is a nongovernmental plan, do they have to file form 5500? I know governmental 457 plans are exempt, what about nongovernmental?

I love these message boards as I think that they provide a useful interchange of information. However, for the second time I have been told, essentially to research the topic myself!!

I have thoroughly searched all old messages, benefits link itself and the IRS through BNA, CCH, etc.

Is anyone familiar with the current IRS position on orphan plans--plans with no sponsor. In 1985 the IRS indicated that they might be issuing some TAM's on this issue. Did they?? Anyone have a cite??

Thanks--and excuse my frustration!!!

A client posed an unusual problem. He contributed $2,000 to his $7,700 traditional IRA in January, 1998. In November, 1998 he converted the entire account to a Roth. No election to recharacterize the contribution was made before the transfer. The broker sent him a 1099 showing the entire account balance as a distribution. He thinks he can deduct the original contribution to the traditional IRA and then pick up what the broker showed on the 1099 over 4 years.

I would have thought that he would not take the contribution into income under Section 408A(d)(6)(a) and that the broker's 1099 was wrong, but then there was no election to recharacterize. To get the deduction I would have him elect to recharacterize the contribution as one to his traditional IRA by the time he files his return (I put him on extension).

He (retired lawyer) suggests that 408(d)(6)(B)(2) implies that he could deduct it.

Any thoughts on how this should shake out?

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