KJohnson

txdd--The date for determining beneficiaries was moved up but I don't think the date for determining separate accounts was changed. By establishing separate accounts you are not changing beneficiaries. The final regs, like the proposed regs state: However, the applicable distribution period for each such separate account is determined disregarding the other beneficiaries of the employee’s benefit only if the separate account is established on a date no later than the last day of the year following the calendar year of the employee’s death. What do you mean by "Also, the children would have to be named as beneficiaries on each IRA to enable the split. " I agree that an IRA may only be "split" among children who were named beneficiaries to the IRA as of the September 30th of the year following the year of death. (and that separate accounts must be established for those individuals by the December 31st of the year following the year of death if individual life expectances are to be used). However, after the split, each IRA would be in the name of the decedent with only one child as the beneficiary payee.

Even if there was not a specific designation of separate shares, I thought that the new regs allowed you until the December 31st of the year folloiwng the year of the IRA holders death to segregate into separate shares for the named beneficiaries.

By the way, here is a link where Derrin Watson goes over the attribution rules in a similar context. http://www.benefitslink.com/cgi-bin/qa.cgi...d=134&mode=read As an aside, I don't know the guy but I sure do use his book when this stuff comes up.

I agree that the controlled group between the hospital and the ASC changes the analysis. In situations such as these I have wondered about the "too remote" analysis because all of the billing for the doctor's services at the ASC are almost always run through the P.A. Thus, since the P.A. is billing for the services (or receiving payment for the services from the ASC), it is hard to say that the P.A. and the ASC are not "regularly associated in performing services for third persons".

Jeff, you can send me a private message and we can discuss this. However, I think deemed/attributed ownership for A Org status might be the key. I think that if the medical practices are all C Corps and that no doctor has more than a 50% ownership in the C Corp then you may be o.k. In such a situation it would appear that the ambulatory surgical center (ASC) could be deemed to own all or a portion of each medical practice but the medical practices would not be deemed to own any of the ASC. Therefore under the affiliated service group rules, the ASC could be an A-ORG to the medical practices FSOs but the medical practices would not be considered A-ORGs to the ASC’s FSO. All A-ORGS to the same FSO are aggregated. The hospital would presumably not be an AORG or BORG to the medical practices (presuming that no Doctor has an ownership interest in the hospital itself) so that there would be no requirement to aggregate the hospital and the medical practices. There would however, be an obligation to aggregate each medical practice with any employees of the ASC. The ASC may not have any employees but you run the risk of having the hospital employees be the leased employees of the ASC. It seems the key is to avoiding problems here may be to use the revised definition of leased employee. A leased employee used to be individuals who, among other things “performed services of the type historically performed in the business field” of the recipient employer. Because of this, even if the ASC leased all of its employees from the hosptial those employees could still be considered employed by the ASC. However, the definition of leased employees in 414(n) was revised to drop the “historically performed” test and replace it with a “primary direction and control” test. Therefore, if the employees remain under the “primary direction and control” of the hospital and the ASC does not have “primary direction and control” the “leased” employees will not be considered employees of the ASC. Thus, although the ASC and each medical practice will have to be aggregated, there will be no “employees” to aggregate in the ASC. Huh? Ken ___________________________________________________ What's the frequency Kenneth? --REM

I think they can be split, but each IRA must remain in the name of your deceased mother. Each IRA should be titled: Mary Smith [Mother], deceased, for the benefit of Jane Smith [Child #1]" Mary Smith [Mother], deceased, for the benefit of John Smith [Child #2]." etc. Be sure to split them by the end of the calendar year following the year of death if you want to use separate life expectancies for required distributions. I have never heard that you might lose the IRD deduction by doing this. Does he have a cite for this?

You've probably posted this on the wrong board. No plan is required to be submitted to the IRS for a determination letter. However, it is a VERY good idea for an individually designed plan. Depending on the current status of your plan, the time for filing for a determination letter on a GUST restatement may have already passed at the end of February 2002. However, in certain instances if you were previously on a prototype or volume submitter you MAY have until the end of 2002 (or possibly a little later) to submit your individually designed plan for a determination letter.

I went back and checked my subject files-- Look at GCM 39271

SNK There are a whole series of TAMS and PLRs but the best place to look as to the IRS position is in the multiemploeyr plan audit guidelines which can be found here: http://benefitsattorney.com/cgibin/framed/...gi?ID=10&id==10 Here is the text: 4.72.14.3.5.6 (05-04-2001) Service with Employer Who Fails to Make Required Contributions A pension plan (including a money purchase pension plan) under which service credit or allocation of contributions is conditioned on an employer's making required contributions violates the definitely determinable benefit rule for pension plans of Reg. 1.401-1(B)(1)(i). It does this by allowing an employer's actions, in effect, to determine the amount of benefits accrued by its employees. It also violates the requirement that all years of service with the employers maintaining the plan be taken into account for participation and vesting purposes as well. If the plan trustees are unable to collect the full amount owed, the plan may incur an accumulated funding deficiency. See DOL Reg. 2530.210 and Rev. Rul. 85-130, 1985-2 C.B. 137. In contrast, because the definitely determinable benefit rule does not apply to profit-sharing plans, multiemployer profit-sharing plans may provide that a delinquency in contributions will be allocated only to the delinquent employer's employees. This does not violate the definite allocation formula requirement of Reg. sec. 1.401-1(B)(1)(ii). (Note that IRC 401(a)(27)(B) requires that a plan intended to be either a money purchase pension plan or a profit-sharing plan must be so designated in order to be a qualified plan.)

I agree with the above--I think the Rev. Rul that mbozek is referring to is 96-47 . The IRS' position gets real interesting in the ESOP context where many plans of closely held corporations "disinvest" all terminated participants in company stock and put those participants into more conservative investments pending pay-out. If you are interested in a "sprited" discussion on this issue and the 411(a)(11) implications you can look at this link. http://benefitslink.com/boards/index.php?showtopic=5893

As I mentioned in my prior post, I think "forcing" participants to go through one broker who knows what he is doing is a good start. However, what brokers are are generally good at is what they are paid for-- advising individuals on stocks. The "niceties" of account administration is not usually their forte. Even some of the best brokers are not aware that the trust has a separate EIN, that the plan's trustee should be the account holder etc. This is compounded when, as the title of this thread suggests, the participants want to use separate institutions. I have seen situations where the ability to completely self-direct does not seem to be as important to participants as the ability to use their own broker. Oviously the brokers want these assets to generate commissions. I frankly have seen this lead to a recordkeeping nightmare Some brokers may report electornically and others through paper. Those that report electronically may use different formats. In such a situation you need a competent recordkeeper/tpa to "ride heard" on making sure that everything is reported and titled accurately. Then, of course, if you go through an integrated or bundled service provider, you have the age old issue of those that the provider might be good at investments are not good at administration or vice versa. Here is a good article on that issue: http://www.benefitslink.com/articles/selecting.shtml Keeping employees/participants happy with their plan is very important and offering personal brokerage accounts can make participants happy (until they lose all of their accounts when they realize they are not stock geniuses) However I think the decision is one that needs a good deal of thought and study by the plan sponsor before it is implemented.

Clearly there is great pressure to add PBAs. In fact a Hewitt study of 290 plan sponsors in the U.S. with a combined total of approximately two million plan participants and $105 billion in assets showed that 55% were adding or considering adding PBAs. http://was.hewitt.com/hewitt/resource/rpts...t_brokerage.htm This doesn't mean it is for everyone. It is definitely not for an employer who is unwilling to hire someone to perform the increased accounting burden. You may want to look here regarding 404© protection and PBAs. http://www.benefitslink.com/reish/articles...08.99.404c.html You may want to look here to see an article on the general prudence of offering PBAs. http://www.reish.com/publications/article_...m?ARTICLEID=281 The brokerage accounts need to be titled correctly (in the name of the trust) you need to make sure that contribution go into the right accounts (and does not end up in a participant's "non-plan" account with the broker.) The participant cannot have direct access to the account for purposes of receiving a distribution. There are potential issues if the broker "combines" any PBA and non-plan account for purposes of price-breaks on commissions or charges on non-plan assets. Most importantly someone needs to reconcile all of the brokerage statements. In the small employer context you need to find someone to "step up to the plate" for recordkeeping purposes and to reconcile data from all of the brokers. Where I have seen this work best is to coordinate the brokerage option through a single broker so you know where to look for records of transactions. Of course this takes away some of the attractiveness of the brokerage option. PBAs may be right for your situation but just realize what you are getting into. Talk to your TPA or recorkeeper about this and any increased fees that may be involved.

RTK raises some good issues. For more, search under the Message Boards or benefitslink for personal brokerage accounts or "PBAs" Also there is a good short article in the Journal of Pension Benefits" that I received today regarding some of the administrative, prohibited transaction and other issues you can run into in allowing this feature.

I think that you get there this way--2530.204-2 are regs under 204(B)(1) and 204(B)(3) of ERISA. Then look at the last part of 2530-200(B)-1(B) which recognizes that 204(B)(1) and 204(B)(3) are just DB rules and do not apply to DC plans. I guess this makes sense since many DC Plans have a "last day" rule for a contribution even if a participant has 1000 hour or more of service.

MGB--I agree with initial participation and vesting--You can't have anything more than 1000 Hours. However, for purposes of receiving the contribution I would assume you are referring to the ERISA accrual computation regs under 2530.204-2. These seem to be truly "DB" oriented. Have you seen anything formally or informally applying these regs to a D.C. Plan. I thought I had read some where that DOL had made statements that these "accrual" rules don't apply to DC plans. Of course a 2040 hour rule would ordinarily present a 410(B) nightmare. However since a collectively bargained plan gets a 410(B) "pass". This would not be an issue.

I think the IRS's comments were made in an attempt to resolve two business concerns of practitioners: 1) Some employers wanted to merge the plans effective 12/31/01 so that the 5500 for 2001 could be a final return. However, I never really saw an additional short-year 5500 as that much of a burden. Also I always wondered whether this would actually work and whether you would still have to have the merger on 1/1/02--thereby facing a one day short year. 2) Employers with standardized prototypes wanted to merge prior to the accrual of the money purchase contribution in 2002 (500 hours) which may have been before the due date of the 2001 contribution. (Of course they could have "frozen" the plan prior to the 2002 accrual, made the 2001 contribution and then merged the plans.) This was really a non-issue for me. The vast majority of MPP plans that I have on our volume submitter have a last day/1000 hour requirement for a contribution and so they are only going through the merger or termination process now. That said, if Wickersham or Holland express a view regarding an interpretation of the Code or the regs after seriously considering a question, I tend to sleep pretty easy in passing that intepretation on to a client.

I think it is pretty solid advice. The IRS gave the same advice at the 2001 ASPA conference as well as the Mid-Atlantic conference this past spring. I know that there were a number of employers who did "feel lucky" and followed this informal guidance. Although nothing is beyond the realm of possiblity, I doubt that the IRS would have any desire to try and put this horse back in the barn. I agree that this does not change the "nature" of the contribution for 2001. It is still a money purchase plan contribution subject to QJSA rules, in-service prohibitions and the like. However, I believe that the IRS stated at the ASPA conference that any future forfeitures would not be so restricted.

Just looked into this and found the following from the 1999 ASPA IRS Q&As 2. Q. When can you terminate a SIMPLE IRA? Rumor has it that once you are passed the notification date, the employer must maintain the arrangement for the next entire calendar year. A. It is either the notification date or the beginning of the next plan year. Though there is no official determination at this time, the conservative approach would be to use the notification date as the limit for termination.

This is from the Corbel website: What impact will the merger have on the funding of the money purchase plan? The answer depends on the provisions of the money purchase plan and when the merger is effective. A contribution is not required to be made to the money purchase plan if the participants have been provided with an ERISA 204(h) notice on a timely basis and participants have not accrued the right to a contribution at the time of the merger. The IRS has also informally indicated that there is not a deduction or minimum funding problem if a contribution for the money purchase plan is actually made to the profit sharing plan after the plans have merged. For example, suppose an employer maintains both a profit sharing and a 10% money purchase plan. The employer wants to merge the plans in 2002 but wants to retain the 25% deduction limit for 2001. Based on the informal IRS position, the plans could be merged as of January 1, 2002, and the employer could make the 10% money purchase contribution to the profit sharing plan by the due of the 2001 tax return.

I am not sure whether this answer's the quesiton, but you may want to look at: ERISA Reg. 2520.102-4 "Option for different summary plan discriptions" answers this question. "In some cases an employee benefit plan may provide different benefits for various classes of participants... (...) In such cases the plan administrator may fulfill the (SPD requirement)by furnishing to each member of each class of participants...a copy of a(n SPD) appropriate to that class. (...) (The SPD) may omit information which is not applicable to the class of participants...to which it is furnished." There is more to the reg so you may want to look at the whole thing.

http://www.ebia.com/weekly/articles/2001/C...HarryBeker.html

Christie--In case you did not see them the 419A did come out on July 11th. You can find them here: http://www.benefitslink.com/taxregs/419Af6...-prop-2002.html

jaemmons--I thought that regs had to be issued before that provision of EGTRRA was effective.

You may want to look at this link which discusses the regulatory exception and DOL opinion letters on that exception. http://www.benefitslink.com/boards/index.php?showtopic=1490

MGB--For some reason in the multiemployer/collectively bargained world, the term "annuity fund" was used for dc plans (traditionally money purchase pension) that were set up years after the original db plan. I assume that is what he is referring to. However, because of the IRS' position on crediting delinquent contributions in the multiemployer context, many of those money purchase pension plans were converted in the last five or six years to profit sharing plans. However, those profit sharing plans usually kept QJSA provisions for all types of money to avoid the problems of segregating the MPPP assets from the profit sharing plan assets. To answer the question--if, as I suspect, the plan is subject to the QJSA provisions, you need to look at Reg 1.401(a)-20 Q&A 27 which says that spousal consent is not required if it is "established to the satisfaction of the plan representative that there is no spouse or that the spouse cannot be located..."