mbozek

What is it if not expert services? I dont see ERISA consulting being rendered by non experts. S-O was intended to prevent Accounting firms from engaging in non auditing activities that give rise to conflict of interest and prevent the rendering of impartial advice/ auditing of publicly held cos. The big four accounting firms have divested themsevles of consulting services that gave rise to conflict interest in Enron that brought arthur anderson down.

check the proposed regs on 457 plans.

only employer RE is subject to 10% limit. Non er re is subject to diversification requirements of ERISA, i.e., must be prudent investment under plan's investment policy.

I dont see how you can restate a mpp to a psp without either merging or terminating the mppp. In a merger the surviving plan must maintain all the provisions required for a mppp; in a termination all of the mpp provisions are required (e.g., spousal consent , annuity payment requirement.)

Establish the plan with an effective date of 1/1/02 so that only service on or after 1/1/02 will be counted for eligibility. Thus ee A will be participant for 2002. But once employee B completes 1000 hrs then B will be eligible to participate in the plan.

A deferred comp plan is established by an employer and the plan terms are a condition of employment for employees the same as the salary paid and job responsibilities. As previous posts have stated the maximum deferral % is 100% of comp but there is no requirement that the plan permit such a contribution. The employer can establish a lower % or a maximum $ amount if it is not feasible to do so and most er do not permit a 100% contribution because of other amounts that must be deducted e.g. FICA tax, 125 contributions, in NJ state taxes on deferrals, etc.

I dont understand your reference to employer standpoint. State laws are preempted as they apply to NP plans subject to ERISA and there are no fed rules which limit amt of 457 deferrals. I dont know if any state have laws that limit amt of deferral to govt plans.

A: I thought the restriction only applied for years in which the employer contributed to a qualifed plan, 403(B) annuity, sep or participants accrued a benefit for such plan. IRC 408(p)(2)(D). Maintaining a frozen plan does not prevent contributions to a Simple Plan.

There is no CR if the election date/form for the distribution is made prior to the time the compensation is deferred. A haircut or penalty is required to avoid CR only if the participant may elect a distribution withhout approval by the independent plan admin. after the amount has been deferred.

Just: Without knowing what kind of documents you are referring to it is impossible to answer the question. Also you have posted the question on the message board for IRAs which are not subject to QDRO requirements. IRAs are divided and tranferred tax free under a divorce or separation instrument and do not require approval of the plan administrator.

As long as the employee does not own more than 50% of the stock or interest in the employer maintaining the PS plan, the employee can contribute to a sep plan for a separate business.

What does the note or loan agreement say about the terms of repayment and the investment of the loan repayments? A Loan note is a contract and the plan is bound by its terms. Also what does the plan document say about loans? Was the change to the pooled fund documented by an amendment to the plan? A change over to the pooled fund could be a material change in the plan which should have been disclosed to participants as a summary of material modifications, although I dont know what the claim is for the failure to disclose. Finally I dont what is the relevance of the employee who would have repid the loan had he known that the funds would be placed in a fooled fund. The participant has a legal obligation to pay the loan off. Repayment doesnt have anything to do with how the funds are invested.

Direct rollovers are only required if the plan provides for a lump sum payment. A qualified plan does not have to provide for a lump sum and can choose to pay only annuity payments. Your shuold review the plan provisions. The IRS could have issued a determinaton letter without requiring the direct rollover provison because the plan did not provide for lump sum payments when it was submitted. Also plan cannot allow cashouts of small benefits unless there is a provison that allows for such payments. You need to review the plan document. Check and see if the employer adopted the direct rollover as a separate amendment and never made it part of the plan. I think the IRS published a model rollover amendment that could be adopted without being sumitted for a determinaton letter.

Under the (a)(9)-3 reg cited above at Q/A-3(B), the surviving spouse must take a MRD by the end of the year year the owner would have attained age 70 1/2 (2002). However, the spouse could rollover the IRA balance to her own IRA by 12/31/02 to avoid taking a MRD in 2003.

Under IRS proposed regs 1.409(a)-1 Q/A B-2 (d), a 5% owner is determined under the rules of IRC 416 as of the plan year he attains age 66 1/2, regardless of whether he/she ceases to own more than 5% of the employer in a subsequent year. You should confirm whether this provison is retained in the final regs.

Most states ( exept LA) have state guaranty funds which will provide for a guarantee of the some benefits for contracts issued in the state. You need to find the state that regulates the insurance co and then call the Insurance Dept in your state to find out how to make a claim. Insurance companies become insolvent, not bankrupt and an administrator is appinted in the state of docmicle of the company to work out the insolvency and try pay off all of the benefits. If the company is insolvent benefit payment/claims are frozen and the administrator works out some form of payment schedule.

Try TIR-1403, Q M-15 , (Also IRS Announcement 75-110)

Any np plan with employer contributions is subject to ERISA unless the employer is a state entity or a church. However, under Dol regs an employer can establish a separate plan limited to employee salary reductions to avoid ERISA issues such as spousal consent for loans and distributions and fiduciary responsbility for investment issues. Although not recommended, a non ERISA plan is not required to be in writing as long as the employees have a written agreement for salary reduction. The restatement can be limited to the current plan with employer contributions- There is no requirement to include the salary reduction program. While normally the salary reduction contributions are made to a separate contract for ERISA and accounting reasons,( EG. the employer contributions are subject to ERISA fiduciary requirements) there is no requirement that there be separate contracts.

no- an IRA is not subject to ERISA.

no

Since a self funded health plan does not have any assets there is no termination approval by the IRS. The Employer can simply send a Summary of material modifications to the employees informing them of the effective date of the changes. (EG: The self funded benefit plan will be terminated for expenses incurred after 12/31/02). The SMM can double as authority to terminate the plan. A board resolution to terminate is required ony if the employer established the plan by corporate resolution. Most state corporation laws do not require board approval to establish a health or welfare plan and few employers seek board approval. Kirk is correct. Small employers frequently set the plans up with a minimum or lack of paperwork and run the program without any TPA or formal approval process to save money.

403(B) = 12k+3K+2K= 17k: 457= 12K+12K= 24 or 41k combined.

In a non profit 457 plan the investments are general assets of the employer so any use of the assets would be subject to the non profit's by laws, charter and IRS rules relating to unrelated business income tax. In a govt plan a trust is required but the use of the plan assets for lending will be subject to state laws for pension plans since govt plans are not subject to ERISA.

The only reason for a govt entity to get a det letter is for the benefit of the employees since there is no tax deduction. But there are few rules that affect govt plans other than the exclusive benefit rule, 415 limits, 401(a)(9), comp limits and there is no IRS program to audit govt plans. (govt plans do not file 5500.) So many govt employers forgo the cost of getting a det letter. Also many govt employers have 457 plans which have fewer rules and no disqualfication risk.

The checks are made out to the retirement plans which are usually the record owners of the group annuity contract. So your co must have some sucessorship interest to the plan to cash the check. Otherwise send the check back to Principal.