What happens when eligiblity for both is the same?

A one-person DB plan. Participant, age 55, wants to take distribution and roll it over to a Roth IRA.

What are his options?

(a) in-service distribution? (not possible since he is less than NRA)

(b) terminate plan? (is it possible to establish a new plan in the future?)

Any other options?

Thanks.

We have a client who is purchasing another company and that company will be adopting the 401(k) plan that is in place. Our client wants to know if they can have different eligibility & entry date requirements for the new company. Possible?

Thanks

Do matching contributions count when testing profit sharing contributions? I know the match is subject to ACP, but am not sure whether they count as profit sharing contributions.

Hi,

I am over 50 with an indvivual k plan and my salary is 100k. The 25% company profit sharing contribution is 25k plus I defer 22k fir a total of 47K. Maximum contribution to a plan for 2010 is $54,500.

Can I have the company make a matching contribution to get me up to the max? The plan is a TD Ameritrade Indvidual Prototype plan.

Thanks for your help.

In calculating the present value of accrued benefit of a participant for loan limit purposes, would you use plan rates? Lump sum distribution 417e rates?

I have a new client who asked me a strange question.

He asked his broker if the broker's fees could be paid outside of the plan and the broker told him no. He now wants to know if he can "put the money back into the plan" to cover the brokers fees (i.e., make the accounts "whole"). This wouldn't be a contribution obviously, but I've never had a client want to do this, or if it can be done. Has anyone had this question, or know the answer?

Thank you so much!

Material advisors who make a tax statement on or after November 2, 2006, with respect to transactions entered into on or after November 2, 2006, have disclosure and list maintenance obligations under sections 6111 and 6112. Persons required to disclose these transactions and/or maintain lists of advisees who fail to do so may be subject to the penalties under sections 6707A, 6707, 6708, 6662, and/or 6662A

For those of you that deal with 419, captives, abusive 412i and section 79 scams YOU should file. Lance Wallach

Former participant wants to take a distribution but would like the check made out to his spouse. Is this permissible? If so, I would think 1099r reporting would be under the participant of the plan and not the spouse receiving the check?

Thanks,

Plan is TH For 2009 (TH in 2008), question regarding the allocation for TH. Lets say the key makes a deferral contribution (and no other er contributions are made) of 5% of comp, my understanding is that then all P's eligible for a TH will receive 3% TH contribution (based on full yr comp). However, if the key defers only 2%, then all eligible P's will receive a 2% TH allocation since this is the highest percentage for the key, is this correct?

With apologies to Jim Stafford:

I was born a turkey (ba dum ba dum)

Been a turkey all my life (ba dum ba dum)

All my friends are turkeys (ba dum ba dum)

Got a turkey for a wife (ba dum ba dum)

They say that this Thanksgiving (ba dum ba dum)

Is gonna be my last (ba dum ba dum)

They want to cut my head off and stick dressing up my a**!!!!

I am advising an ER that has a health plan that has been in place since before 3/23/2010 and continuously covered EEs since. The major medical benefit is provided through a high-deductible ($10,000 per year) insurance policy that once met, provides coverage with co-pay and co-insurance responsibilities of the EEs. The health plan also includes a buy-down MERP--the ER pays for dollars $2,501-9,999 of the health expenses applied to the insurance annual deductible, yielding a net annual deductible to the EEs of $2,500 per year. The health plan does not call for the ER to pay any part of the co-pay or co-insurance responsibilities of the EEs under the insurance policy.

The ER would like to preserve the grandfathered status of the health plan, avoiding many of the new PPACA '10 requirements. In assessing the plan design for 2011, and what can be changed without jeopardizing the grandfathered status, we've discovered a quagmire that the regulations (Treas Reg § 54.9815–1251T) do not seem to address. The problem is that the TPA has been since before 3/23/2010 determining employees' claims as though the ER is responsible for paying 50% of those co-pay and co-insurance responsibilities of the EEs. Granted, the TPA has not been operating the health plan as written.

To keep the grandfathering, the regulations make clear that there can be no increase to the EE's "cost-sharing" of the co-insurance and only moderate increases in the EE's "cost-sharing" of the co-pays. If we instruct the TPA to operate the health plan as written from this point forward, are we increasing the co-insurance and co-pay obligations of the EEs and jeopardizing our grandfathered status? Or is that type of administrative correction to bring the operation in compliance with the health plan's documents allowed without compromising the grandfathered status of the health plan?

My client wants to introduce an early retirement window plan with a COBRA subsidy as well as a nice cash payment. The client's health plan is fully-insured. Does Section 105(h) cause a problem here?

Plan sponsor issued a maybe 3% Non Elective Safe Harbor Notice for 2010 Plan Year. Sponsor funded 3% for January 2010, then in February decided they couldn't afford contribution and issued a "No we're not going to be Safe Harbor notice". Plan is Top Heavy for 2010 and Sponsor did not realize top heavy implications and now wants to rescind their "No we're not" notice and be Safe Harbor for 2010. Can this be done???

Thanking you in advance for your help.

I hope somebody's available to help me out in this short week. I've inherited a plan with lots of loan problems.

1. An employee took a $2,500 loan on 10/19/04.

a. The first payment was not made until 1/24/2007 (Well outside the Grace period, should the loan be defaulted as of 3/31/05)

b. Here we are in November 2010 and the participant is still paying down the principal of the loan. Maturity date is 11/06/09.

c. Would I have the option of defaulting as of the maturity date or less likely at 3/31/10(Maturity plus grace periord)

d. Must the 1099 include interest accured through the date the loan is defaulted

2. I have several other loans that haven't gone past the maturity date but did have more the two quarters without a single payment. Do I have the option of re-amortizing those, keeping the same maturity date. Or do they have to be deemed at the end of the quarter following the quarter of the missed payment.

-We are taking this client through VCP as they are still operating on a pre-GUST doc so we can easily tack on items for correction. This plan is audit size and I have no idea how it go so far out of whack. Any help is greatly appreciated.

Assuming the valuation has the assumption that the expected benefit form is a lump sum distribution then the annuity factor used to develop the Fdg Target and TNC should then be the GREATER of (a) 417e factor or (b) actuarial equivalence (if different), is that correct ? I realize the discount will use the 430 segment rates but I'm just concerned with the annuity factor itself. Thanks.

• New 401(k) plan established in 2009.
  
• Business owner born in 1939.
  
• All of the money in the owner's account is Roth elective deferral source.
  
• Spouse/beneficiary is 13 years younger.
  

It appears that the owner will be required to take 4 RMDs before the 5 year period is satisfied. (Obviously, he is annoyed that no one mentioned the 5 year rule, or RMD rules, before he set up the plan.) This year's RMD amount will be ridiculously small.

Is it possible to specify that the distribution is all basis and leave the earnings in the plan?

I've been doing some reading about 403(b) participation when a not-for-profit agency has a for-profit subsidiary. In this case, the 501©(3) does not want to include the employees of the new for-profit LLC in the 403(b) plan. The easy answer is to say that since the LLC is not a 501©(3) organization, those employees can be ignored for 403(b) purposes. Could it be that easy? One reason I'm concerned is that the 501©(3) expects to add more for-profit businesses over the next few years, so I want to cross this bridge now rather than waiting until there's a bigger problem involving even more people.

We have a client medical practice corporation. There are two shareholders, each owns 50% and each is a member of the board of directors (only two members on the board). Upon termination of employment, the shareholder physician employment agreements provide that the employee (shareholder physician) is entitled to receive the A/R directly attributable to his physician services as it is collected during the 180 days after termination. Payments of the A/R collected will be made as it is received but not less than monthly beginning 60 days after termination. The issue it seems to me is whether this arrangement meets the requirements of 1.409A-3(i)(1)(iii), in particular -3(i)(1)(iii)(B), as to whether employee has effective control of the corporation. I have not seen any guidance as to what constitutes "effective control" for this purpose. It is clear that with two 50% shareholders, neither has voting control and all decisions require unanimity but I am not sure what criteria might come into play for the "effective control" analysis under this provision of the 409A regs.

Any thoughts would be greatly appreciated.

I am looking for some guidance here. Plan renewal date is December 1, 2010. The client is renewing a plan with exactly the same provisions as last year except for 1 thing. Instead of Rx copay $15,$25,$40, it is now $100 Rx deductible and then $15,$25,$40.

I know the deductible can go up 15% plus medical inflation. But what if the current deductible is zero?

They would like to keep their grandfathered status, even though they do not have any discriminatory practices. Everyone has the same entry date, same % of premium paid across the board, no one excluded once probationary period has been met.

Thank you.