A ISO Plan provides that employees will vest 1/36th for each month of employment following the ISO grant. To avoid having optiobns treated as NQSO because of 100,000 annual limit, may the employer and employee agree to extend vesting schedule? For instance, could the vesting schedule be amended to provide that employees would vest 1/60th for each month of employment following grant.

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It is very frustrating using the Quantech Financial Interface Link with Manulife Financial as you cannot deselect fields of data you do not want to import. It is either all the data or none of the data. Has anyone out there using this link found a solution to this problem. Help!

With the amendment of 457 through the SBJPA of 1996 to add paragraph (g), does this mean that 457(f)assets could be protected from the bankruptcy of the sponsoring entity?

Regards,

David

f a participant loan meets all of the requirements for the interest to be deductible,

(i.e. source is not from elective deferrals, lien on residence, non key person) but the

interest is being paid to their individual/fbo account, is it deductible on their personal

tax return?

in irc 72(p)(3), there is no refernce as to where the interest is being paid.

an married ira owner receiving mrd dies with a trust as primary beneficiary. the trust is not irrevocable at death. must the plan assets be fully distributed within the year following the year of death? any way to avoid, such as a disclaimer by the trustee so the surviving spouse which might allow a rollover?

When the prices go up, the tough get budgeting....With healthcare cost increases several percentage points north of general price trends heading this way, I'm sure many firms are dusting off the plan design/forecasting/budgeting tools they applied annually during the late 80's - early 90's. If you're the chief tool-sharpener at your firm, what implements do you plan to hone first? Do you have your sights set on any emerging cost-management techniques?

On the other hand, if your firm's yawning in the face of impending price increases - maybe because none are in sight for you - can you shed some light on your reasons for calm in the face of the brewing storm?

Facts: Law firm with 6 attorneys (young) and 4 staff (old). New comparability doesn't work. They want the minimum commitment and maximum flexibility. Any comments on this safe harbor 401(k) design? Contribution type (1) 3% nonelective safe harbor to NHCEs only; (2) elective deferrals to lesser of $10,000 or 415 limit; (3) 3% discretionary profit sharing to HCEs only; (4) discretionary profit sharing allocated using permitted disparity (i.e., not trying to use the 3% safe harbor as a base); and (5) discretionary profit sharing allocated pro rata if any 404 room left. Company's maximum commitment is 3% to NHCEs, but HCEs can defer full $10,000 and add to that amount in increments to optimize disparity.

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RWS

IRS Notice 98-52 makes it clear that 401(k) plans that are in effect and have fiscal years beginning on or before April 1, 1999, must give Safe Harbor notices no later than March 1, 1999, in order to take advantage of 401(k) safe harbor treatment for 1999.

However, is it safe to assume that a new (calendar year) 401(k) plan can be adopted long after March1, and still elect safe harbor status for 1999? (e.g., sponsor adopts a calendar year k plan on November 1, 1999 - this plan can elect safe harbor treatment for 1999 - right?)

How about an existing calendar year plan that was not a k plan until it is amended on November 1, 1999, to add k features. Can this plan elect safe harbor status for all of 1999?

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Rev. Proc. 97-41 says that 403(B) plans must be amended for SBJPA by the end of the 1998 plan year, but that qualified plans have until the end of the 1999 plan year to be amended for the GUSt requirements generally. Any ideas about why the IRS chose the require 403(B) plans and contracts to be amended earlier?

This seems like a simple-minded question, but I'll ask it anyway. For a non-ERISA plan, what would be the consequences if the amendment is late? As 403(B) plans aren't qualified, what can the IRS do about incorrect documents? The audit guidelines focus on operational errors.

(As you might have guessed, I have a new client that missed the 12/31/98 amendment date.)

I do not believe any employer contributions other than top heavy can be made to a SARSEP.

Does anyone have a cite for this?

Thanks,

Steve

It has been several years since I have compared a DB Plan with a Profit Sharing Plan. Where is the best place in the code or Regs to start my review?

Which "must have" ERISA/EB books/outlines do people recommend for someone in this field?

Client has 401(k) plan which provides for quarterly investment changes and quarterly participant reports. Client wants to permit participants to make investment changes more frequently but at their expense. Investment manager proposes to charge a flat fee for each additional change (eg, $200 per change). Client also wants to let participants request "enhanced" reporting which would

include info not required in standard reports(eg, performance of participant's account versus S&P 500). Again, participants would have to pay a flat fee ($200) for each enhanced report. I believe that the fees (if reasonable) can be paid by plan an charged against accounts of appropriate participants. Is ther any discrimination problem because the HCEs (who likely have the larger balances) can more easily afford the fees?

A pension plan was terminated and purchased annuities through an insurance co. about 12 yrs ago. Can a person still have rights to obtain plan documents and review his pension calc. Is the insurance co. the trustee who has all files and responsibility of administering plan in accordance w/ provisions? And do we request such documents from the ins. co. in same manner as if it were the plan sponsor?

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Upon enrollment, do newly hired employees need to be notified in writing SEPARATE FROM THE SUMMARY PLAN DESCRIPTION, that the plan has a pre-existing condition limitation which may be reduced by credible coverage under HIPAA?

Does having this information in the SPD suffice?

So far, I have gotten conflicting answers.

Two key employees from company A leave and start company B, in which they are 50/50 owners. A & B are not common ownership.

Company B establishes plan, and they roll their funds from A's plans into it. Rolled funds are substantial and represent 96% of B's balances.

For top-heavy test, are the rollover funds considered related to B's plan or are they tested under A's plan? I only ask this as the individuals were key employees in both companys.

Can a governmental 401(a) plan have mandatory pre-tax contributions? Would this be allowed under section 414(h)? If so, should there be special language in the Plan Document to allow for the pre-tax contributions?

We are investigating the outsourcing of our COBRA / HIPPA administration. I would be interested in hearing of experiences with vendors (good or bad) of others who have gone through this process.

If you have comments that you would rather not post to the list, please feel free to email me directly at shakes@lenscrafters.com.

Thanks in advance.

Scott Hakes,Director of Benefits

LensCrafters

Cincinnati, OH

In a recent discussion with another practioner, I heard about this method for correcting a failed ADP for one HCE : the HCE requests his/her w-2 corrected for the year in question and the plan administrator deems the excess to be an advance contribution for the next year. Has anyone used or heard of this approach ?

Do you know of any conferences or training materials dealing with non qualified plans.