Census information getting ready to be sent to clients with 12/31 year ends. Has "Key Employee" definition changed or is it same as previous year?

[This message has been edited by PWBAer (edited 11-19-98).]

Is it possible for a plan to have the hourly employees vest 100% immediately and the salaried employees vest on a 2-20 schedule.

Participants must be allowed to make a diversification election within 90 days following the end of each plan year during their six year election period. The trustee then has 90 days following the expiration of the 90 day participant election period (in other words 180 days after year end)to implement the participant's diversification election.

How do you handle the 90 day/180 day requirement when the stock appraisal isn't available until after both time periods have expired? I suppose you could calculate the number of shares available for diversification but you don't know the value of the shares.

Any help would be appreciated!

What happens when participants in a self directed 401(k) Plan do not make investment elections. Can the Plan provide for a default election, and will this affect the protection 404© provides? What happens if the Plan does not have a default and the fiduciaries put the money in an FDIC insured money market account?

My company currently pays 100% of premiums for employees and dependents' health insurance. Our 1999 premiums went up almost 10%. We are looking at a way to control costs without having to have the employees contribute to the premiums. We are considering not covering any spouse who has health coverage available through his/her employer. Does anyone have a policy on this subject? Has anyone had to put a policy like this in place? How was it handled? I appreciate any advice. Thanks!

I read in a 1992 PPD ERISA Newsletter

that in 1993 Congress was expected to

enact technical corrections that would

include an exception to the 20% withholding requirement on certain hardship distributions. Any news on this? 20% still required for these distributions?

Okay - situation - taking over. Prior P/S&401(k) was restated in '96 and signed in December. IMHO filing should have happend no later than the due date for the corporate return or Sept. 15th..... is that correct for a restatement? Any help would be appreciated.

Does it matter that this is an indiviually designed document going in on volume submitter...?

I have generally taken the position that a company cannot set up a retirement plan for its independent contractors, only its employees. (See the thread on 401k Plans for independent contractors.)

However, I understand there are some "employees" that by law can be considered as independent contractors for some purposes and as employees for others. Specfically, I have heard that this applies to life insurance agents. In other words, life insurance agents are technically independent contractors, but can be covered under the insurance company's retirement plan.

If this is true, to what other agents/brokers does this apply. Real estate agents/brokers? Travel agents that work for an agency? Others?

For money being distributed from a DC plan after age 70-1/2:

1. If the distribution was less than the minimum required under 401(a)(9) in a previous year (say 1996), does that affect the minimum required in the current year (say 1998)? Does the answer to the previous questions change if no excise tax has been paid on the inadequate distribution?

2. Assume that nobody can reconstruct the minimum distribution methodology used in prior years (single or joint life, recalculate life expectancies or not) because data is unavailable. What rules govern the methodology to be used in the current year?

Plan sponsor forgot to file 5500C/R in time. Filing was due July 31, and extended to October 15.

1. Is the $25 per day penalty measured from July 31 or from october 15?

2. Is the penalty supposed to be paid along with the 5500C/R, or will the IRS send a bill? Are there advantages of either approach?

3. What success do plan sponsors have in avoiding the $25 per day penalty. In this case, the plan sponsor put it under a pile of papers, and ...

Oops!

Would like some thoughts regarding an Employer Match to be done with Employer Stock. The question came up between stock on the open market and that of treasury stock. If treasury stock is used, could this be a possible prohibited transaction? Taking this a little further, if an employee wanted to sell other funds and invest in the treasury stock. This is not an ESOP, but a 401(k) plan. I've not run across any plans yet that have treasury stock and am not sure of the answer.

I am looking for information on Florida's mini COBRA rules.(For group health insurance plans sponsored by Florida based businesses with less than 20 employees.)

Can anybody recommend a good tool/utility that calculates various optional forms of benefits. I'm looking for software that will calculate various J&S, L + X certain, Lump Sums, etc. equivalents of a projected monthly benefit. The current tool we use is will be obsolete on 1/1/2000.

We recently took over a plan that was transferring from an insurance to a brokerage/mutual fund investment product. Plan participants were informed that the assets were in a money market fund at the insurance company pending transfer. In fact, they were invested in the market. The transfer was to take place 7/1/98, but did not occur until 8/7/98 due to delay on the part of the insurance company. Asset value dropped significantly. Is there any authority for the plan sponsor to make up the investment losses? If the answer is yes, would the contribution be deductable?

Does anyone know of any DB plan that offers payout options for periods other than for one's lifetime? Are such options allowed under the IRC? I am referring to the BASIC BENEFIT; not the DROP option.

[This message has been edited by joel (edited 11-18-98).]

A limited partnership is owned by 8 partners. 2 of the 8 partners are S-corps. (traders). The limited partnership has 12 employees who provide administrative services to 8 partners. Realize that an affiliate service group exists. Is plan drafted to indicate that all partners are participating employers to insure that employees of S-corps can participate? Any thoughts? Thanks. Ed

An individual is employed by a governmental agency. The individual participates in a PERS deferral plan as well as a Section 457 plan as a government employee. The individual also has a separate business which he operates and participates in a Simple Plan. Question: What Annual Addition Limits (if any) apply to this individuals participation in the three (3) plans?

Every one knows that Minimum Distributions are not Eligible Rollover Distributions, and therefore, are not subject to 20% withholding.

However, minimum distributions ARE subject to withholding. My questions is this: are Minimum Distributions "Periodic" or "Non-Periodic" distibutions? The answer affects the manner in which withholding is calculated.

I believe that minimum distributions are periodic distributions, even when they are paid out of individual account plans. This is because the distributions are calculated on the basis of life expectency, and paid over life. The fact that a participant could elect to accelerate distributions in the future should not impact their classification in the current year.

I seem to recall that, before the days of "Eligible Rollover Distributions" (i.e., before the UCA took effect in the early 90's), we treated minimum distributions as non-periodic. However, the regs defining Eligible Rollover distributions now make a compelling case that minimum distributions are "Periodic."

Has anyone seen official guidance on this question? Should minimum distributions always have been subject to withholding as periodic distributions, or has there been a change over the years (officially recognized or not)?

Is an executor fee, which is reported on a 1099-MISC and not subject to SE tax, considered compensation for purposes of determining deductible IRA contributions?

I recently lost a part time job which I relied on to supplement my income. This was sudden and unexpected. Due to this loss I have found myself deep in debt just from living expenses. I applied for an emergency withdrawal from my 457 account. Instead of making a decision my employer sent the application into the plan administrator to ask their opinion and they stated that it wasnt an emergency and that the employer could still authorize it but would be subject to an audit and plan cancellation. My employer then denied my request. Any ideas on how to appeal this decision?