What is the lastest legislation regarding the ability to roll 403 b monies into a 401 k plan. Non profits have had access to 401 k since jan 1 1998 but can't roll old 403 b assets to this type of plan.What is new on this subject?

I am dealing w/ two companies that used to be a controlled group (A=parent and B=sub). 7/1/97 Company B was sold by Company A. Company B, both prior to and after the sale, has a group of non-union hourly employees that are specifically excluded from the plan. The salaried employees of B participated in A's plan. The hourly employees of B had their own separate plan, but with lesser benefits. ABT has always passed so there hasn't been an issue with excluding the hourly group from participation in the more generous plan.

At 7/1/97, the date A sold B (after the sale there is no more controlled group), the hourly plan for B terminated. The salaried employees of B that used to participate in A's plan, now have their own new plan effective 7/1/97. So for the short plan year 7/1/97 - 12/31/97 (this is a calendar year plan), B has a plan for salaried, but there is a huge group of hourly employees (there are more hourly employees than salaried) with no plan benefits at all.

I am not concerned about the first half of the year when A and B were still a controlled group. I am however very concerned about B's ABT for the second half of the year (hasn't been run yet due to lack of census data on the hourly group).

I have heard there are some transitional rules with regard to years where corporate ownership changes and 410(B). Does anyone have any knowledge of these special rules, or could anyone point me to a reg cite? I have done some research and haven't really found anything useful.

Thanks for your help.

We currently offer retiree medical coverage, which includes an option for retirees to select a medical risk HMO option, which is available to retirees aged 65 and older. If the retiree's eligible dependents are not age 65, however, they must remain under the regular indemnity plan for retirees. We would like to change the plan's eligibility provisions to provide that a former employee may NOT select the medical risk HMO option at age 65, unless all of his eligible dependents are age 65 or over. The reason is to simplify the administration of the plan. Does anyone see any problem with this?

May an employer that establishes a qualified plan for non-union employees subject to the prevailing wage requirements under Davis-Bacon subject retirement contributions to a vesting schedule? Any thoughts? Thanks. Ed

My employer announced a transition from one service provider to another to begin March 1, 1998. The transition was to completed by the May/June time frame. At that time, 2/10/98, all fund management (transfers, distributions, loans) was suspended as part of a "quiet period". Our last statement from the previous administrator was for the period ending 2/28/98 (mailed in mid-May) and a letter was enclosed indicating we would get a statement in mid-July from the new plan administrator showing the opening balance as of March 1, 1998 and activity through June 30, 1998.

To-date, I have never seen such a statement from the new plan administrator. On June 26, 1998, we received a letter indicating the transition was taking longer than anticipated and that the "quiet period" would continue but should be live within the next 30 days. On 7/31/98, we received another letter indicating the same delay with a new predicted "go live" date of 8/31/98.

The new plan went "live" on 8/25/98.

All during this transition time, 2/10/98 through 8/25/98, I had no control over my money and at the same time, have no accounting of my money during the "quiet time". I have lost alot of money from that final previous plan statement and now (including contributions of 10% with a totally vested company match). After not receiving any accounting information from the new plan administrator, I called their on-line information service for my current balance.

Has there been errors/omissions in the handling of this transition process that someone should be held accountable for?

A law firm (C Corp) is owned by a father (45%), son (30%), and unrelated third lawyer (25%). The wife of the father is an employee and participant in their 401(k) Plan and wants to take a loan from the 401(k) Plan.

I think she is a party in interest by virtue of her relationship to the father and son whose combined ownership exceeds 50% and therefore can not take a loan.

Am I analyzing this correctly?

[This message has been edited by LCARUSI (edited 10-07-98).]

[This message has been edited by LCARUSI (edited 10-07-98).]

I may be missing the boat on this one, but please help. May a Plan Sponsor amend his disability plan to redefine the term Total Disability after a claim is submitted and apply the new definition to the pending claim? I say no..but why? Would the answer change if it was in a Defined Benefit Plan ( ie would 411(d)(6) apply to the definition? Can you apply the new amendment to claims already submitted if the claim has not been decided and was just recently submitted?

My understanding is that Q&A 22 from the 1996 Grey Book, which stated that the SSLI annuity option WAS subject to the 417(e) minimum benefit rules, continues to represent the IRS's position. That is, the SSLI option IS considered to be a decreasing annuity and is not exempted in the recently released 417(e) regulations as a Social Security supplement. I am having a hard time convincing my client's actuary of this fact even though he attended the same EA meeting as I did. He states that he has had informal discussions with the IRS and contends that an SSLI option meets the "spirit" of the regulations' exemption. What discussions have you had regarding this topic? Are you aware of anything published that would support your position?

[This message has been edited by Phil (edited 10-07-98).]

Does your organization provide employees with an adoption policy? Paying for any of their time away from work during the time of adoption? Or pay anything toward the expenses incurred for adoption? If so, I would appreciate receiving some information from you. Thank you in advance for your help.

I work at an organization that is a merged outpatient clinic and hospital. The clinic is able to close for severe weather and of course the hospital is not. I am interested in learning how other organizations handle severe weather days when employees are unable to report to work. Do you require the employee to use vacation or PTO? Do you pay the employee for time missed if your facility closes? etc. Any information that can be provided is greatly appreciated. Thank you in advance.

I've seen the IRS amendments for terminating DC plans but can't locate them now. At what site did they appear?

This was in response to BPS re: Divorce calculations. I must have hit the wrong button to post the reply.

Use what the document says to use. You might throw on a "GATT" provision (making the document individually designed, if its not already) if it saves your client money.

I had one case where the plan was underfunded. In the divorce negotiation, my client said "Take out my employees' lump-sums and we'll divide what's left in two". This was accepted by opposing council.

[This message has been edited by Chip Brown (edited 10-07-98).]

looking for a reliable source of information regarding ira fees charged by custodians. Any ideas?

Is anyone aware of any circumstances when pre-tax elective deferrals under a 401(k) plan may continue after an employee's (otherwise) eligible compensation has exceeded the 401(a)(17) limit for that year? For instance, a highly-compensated individual who elected to defer 2%, would hit the 401(a)(17) limit prior to hitting the 402(g)

limit. Are you aware of any rulings (PLRs included) that speak to this issue?

I would like some information about D C Exchange. How do vendors and fund companies interact? How many funds and fund companies are available? What are their charges. Do the trade on the new DCC&S platform?

We are a small to medium size compay in GA and wishing to create a policy for exempt employees that would keep these employees on the payroll for a period of time before going on STD or LTD. I would appreciate any text of policy your company has on this matter. Thanks

I have a client with a 401(k) plan (no hardship distribution provision). One of the participants just missed his second quarterly loan payment in a row. The loan policy in place for years wasn't followed -- it provides that the plan administrator is to provide notice and an opportunity to cure. If we don't use the proposed regulations (1.72(p)) is it possible that when final regulations are issued that this will be treated as a deemed distribution, regardless of how the plan administrator handles this file? Any advice on this whole situation would be appreciated.

I have a client that is starting up a new 401(k) Profit Sharing Plan. They do have some employees that fall under the Davis Bacon Act. They are wanting to exclude these employees and cover under a separate benefits package. These employees are not collectively bargained, therefore to exclude the 401(k) Profit Sharing Plan would still have to pass 410(B). My question is how would you word the exclusion statement under the plan to exclude those employees that fall under the Davis Bacon Act and no others. Once again they are going to set up a separate benefits program for Davis Bacon Employees, which as of yet I have not seen.

Any help here would be greatly appreciated.

We have three sisters who each own 33.3% of company a & company b. They do not work for either company, but their husbands work for company a. They want to set up a new plan for a but not b. Company a has 13 employees, company b has 50. I am assuming they have to offer a 401(k) to company b. Right? Any plan design ideas here?

Thanks for any input.

Can an employee make a salary deferral contribution 1n 1998 for the tax year 1997 up to due date of his employer's tax return, including extensions? If so, how would the employee report and deduct the contribution on his 1997 1040? Code sections 404 & 408 and commentary indicate that a contribution after the close of the tax year is allowed but I can find no guidance on how to report it. It can't be reported on 1997 W-2 because contribution was made in 1998. HELP! NEED AN ANSWER BEFORE OCTOBER 15 1040 DEADLINE!