A premium only 125 Plan currently has 1 owner/officer. Discrimination testing has been passed. This owner wants to somehow give ownership in the company to the other 6 employees on an equal basis. That means all would own about 14%. There would be no non-key people in the plan. What happens? Do they have to stop the plan or since the plan does not discriminate in favor, can they keep it?

I am looking to establish the criteria for selecting a 401(k) third party administrator in the small case market. For example, how are TPAs selected by Nationwide and Manulife (i.e. years of service, quality of service, etc.)? How are TPAs paid (commissions and/or market allowances)? How many small 401(k) plans are bundled vs. unbundled? What is the sales potential for unbundled plans? What is the trend?

Any info on TPAs would be much appreciated.

Discount broker was supposed to convert my entire IRA account to a Roth IRA. I just got my statement and only stocks and 2 mutual funds were converted. A Money market and a mutual fund are still in the old IRA. The answer I got from them was "too bad, nothing can be done, even if it was their mistake". I wanted the whole IRA converted in 1998. Am I stuck with this mess?

Recently, I have been encountering difficulties with some 403(B) employer payroll submissions. Public school payroll departments and common remitters are occasionally making mistakes in their attempt to submit employee salary reduction contributions to 403(B)(7) custodial accounts. In these instances, contributions are made to one or more accounts in which the participants receiving them are not entitled.

The employer or common remitter subsequently explains that they made an error in their previous payroll submission. To correct the error, they

submit a new payroll for the current month with a negative contribution applied to each participant that previously received an over-contribution. However, only the participant or beneficiary of the custodial account can authorize the removal of money from the 403(B)(7) once it has been deposited.

Does anyone know what other mutual fund companies are doing in these instances?

A US Citizens livig abroad earns $50,000 foreign wages, all of which are excluded as foreign earned income. Question: Do the excluded wages count as "compensation" for Roth IRA purposes? And, are the excluded wages included in Modified AGI?

A small company of 6 employees would like to administrate their own Flexible Spending Plan. Is this still OK according to the IRS?

A spouse (<59 1/2) is the beneficiary of a death benefit from a qualified plan. My understanding is that spouse can (1) roll the proceeds into an IRA, or (2) receive a distribution from the plan.

In scenario (2) the distribution is taxable income to the spouse but the 10% penalty on early withdrawal (<59 1/2)is waived.

If the spouse elects (1) a rollover, then it must be to an IRA. They can not roll to a qualified plan.

My question: If the spouse elects rollover and then takes a distribution from the IRA are they subject to the 10% early withdrawal penalty or is the penalty waived because the IRA is proceeds from a death?

Any cites are welcome. Thank you.

mck

Does anyone know of companies that provide health insurance for parents of employees or allow their employees to purchase the health insurance for their parents? Thanks

Does anyone know where I can get DOL Opinion Letters on the Internet??

Company A is a parent company located in the United Kingdom. Company B is wholly owned by Company A and Company B is located in the US. Company C is also wholly owned by Company A and Company B is also located in the US.

Would you agree that the plans of B and C will require coordination for testing since they are part of the same controlled group (with an overseas parent company)? If my understanding is correct, the employees of A would be excluded from the testing to the extent they are nonresident aliens with no US source income. However, all the employees of B and C would have to be treated as employees of a single employer, right??????????

Can a custodian (i.e. bank, security firm) be named an owner of a Roth IRA?We have received requests for this. If a custodian can be an owner, how do the wage limits for Roths apply?

I am interested in understanding the definition of part time employees and the full time benefits that must be extended to them under law.

We are adding 2 or 3 new subsidiaries with the same benefit plans as parent but different eligibility requirements. How do I set this up? Do I need to have seperate plan docs for each company, or can I just amend for the new subsidiaries?

I would appreciate any guidance or confirmation on this issue. Does the compensation limit under Sec. 401(a)(17) ($160K this year) only apply in calculating the Sec. 415 limit but not the maximum exclusion allowance under Sec. 403(B)(2) with respect to determining the max. salary deferral amount per employee? Thanks.

My employer is considering buying new software for HRIS, given our recent rapid growth. We are now a company of 200 Ees and still growing. Can anyone provide feedback on ABRA, ADP and other software that is working well/not effective/easy to use/good or bad customer support/comprehensive for payroll and benefits/easy for data entry/etc.?

Is a hospital indemnity plan (maintained by an employer subject to COBRA) that pays a fixed dollar amount per day of hospital confinement subject to COBRA?

Tax Exempt employer established a 403(B) plan. It has now implemented a 401(k) plan for all employees, and wants to limit the 403(B) plan to only those employees who were employed on 1/1/99. Can the employer do this? The statutory language of 403(B) suggests that all employees (with limited exceptions) be offered the right to participate. Is anyone aware of any authority (statements by Labor-PLRs, etc.) which would permit an employer to limit the 403(B) plan in such a manner? By way of information, the 403(B) plan had a match, and is subject to ERISA, but as of 1/1/99, the match is now being made to the 401(k) plan.

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jpb

Where can I get a summary of state and/or federal employment regs? I'm specifically trying to find out the reg for how long an hourly employee can work over 30 hours a week before you are required to classify him as full-time.

If an employer with an overfunded DB plan converts it to a cash balance plan, hwat happens to the overfunded amount?

I do not believe tha plan is terminated so there should not be a reversion.

At the time a participant terminates employment, the plan's vesting schedule is X. The participant leaves his or her account in the plan. Later, after this termination of employment, the plan amends the vesting schedule to a more generous Y. Which vesting schedule (X or Y) applies to this participant? Thanks in advance.