I've always understood the 402(g) limit to be, for 2010, 16,500, whether pre or after tax. But I have read on a company's web site that their employees may exceed this limitation if the excess contribution is designated after tax contributions. I then found this on another employer's web site...and this is not part of a plan with Roth provisions.

1. May 401(k) plans allow this? Where in the code is this allowed?

If so....

2. must the employee's after tax contributions be subject to the ACP test?

3. may after tax contributions only be made if the full pretax 402(g) salary deferral has been made, or may the employee designate any part of their salary deferral as after tax??

4. Are the after tax contributions subject to the 415© limitation?

Any other information on this would be appreciated.

BruceM

Under this new pension law, are there any circumstances in which quarterly pension contributions are required for a small DB plan? Ours never has and never will have more than 50 participants.

It used to be 100 participants made a difference, I think, so we paid once a year. Are we still exempt from paying quarterly due to our size?

Participant A borrows $40,000 from a MPPP (when A's account balalnce is $150,000). Participant A then borrows $30,000 from the same employer's PSP (when A's account balance is $250,000).

The MPPP is then merged into the PSP, and the MPPP trustees assign A's $40,000 note to the trustees of the PSP (who accept the assignment). Does the combined $70,000 worth of loans now in the PSP violate the $50,000 loan limitation of IRC Section 72(p)(2)(A)?

Plan historically had a 6 year vesting schedule but shifted to a 5 year vesting schedule when adopting a restated adoption agreement some time ago. The 5 year schedule is in all cases more favorable than the 6 year schedule. A dispute has arisen over the impact of the amended vesting schedule with respect to former employees who were not 100% vested when they separated from service and remained participants in the plan at the time of the amendment.

I had always assumed that such former employees should generally be governed by the vesting schedule in place at the time they performed services /received contributions under the plan--i.e., that old money generally tracked old rules. Others say, however, that all participants in the Plan should get the benefit of the new, more generous vesting schedule regardless of the fact that they did not perform any service after the change was adopted.

I suppose I could see where a plan could be amended to provide for application of the more generous vesting schedule across the board--to existing employees as well as former employees participating in the plan--but would that be the normal operation / intent of adopting a restated prototype adoption agreement with an enhanced vesting schedule? Couldn't an argument be made that forfeitures of the former employees under the old (less generous) schedule belong to the other participants such that giving them the benefit of the new (more generous) schedule is problematic? And couldn't an argument be made that those unvested participants who just happened to stick around in the Plan after termination instead of taking an immediate distribution or roll-over got a windfall that other former employees who had previously taken money out of the plan did not receive?

Thanks for any advice on this.

Can a Safe Harbor 401k plan be amended mid plan year to change a provision that doesn't have an effect on the 3% SH NEC, but might have an effect on contributions made above and beyond the SH NEC?? Thanks.

I have a client that discovered an error on their trustee statement for a previous year. They are inclined to file an amended Form 5500 but want to know if it is necessary to have an amended audit attached to the Amended Form 5500.

Any thoughts?

I need some TPAs who do daily recordkeeping on Relius and trade with TD Ameritrade. Preferably in the Southeast, NC, SC or around that area would be great.

Thanks!

For an HSA contribution, I have read you can make the contribution up to the tax filing date (April 15, 2010 for 2009 year). However, does the Plan need to be established on/before 12/31/09 in order to make the contribution? Just wondering if they can set up the HSA in 2010, make contributions for the 2009 year.

Thanks,

I have a husband and wife DB plan. Husband several years ago converted his PVAB to a 414k account under terms of the plan. So far so good.

He is now coming upon his age 70 1/2 minimum required distribution point. Question: must his MRD be figured under the 401a9 annuity rules or can he use the account balance method?

I'm nearly certain I've seen discussion of this, perhaps at an ASPPA conference or something, but I'm darned if I can put my hands on anything.

Participant terminates employment on, say, Sept. 1, 2009. 12/31/09 valuation is processed, distribution paperwork sent to the former participant, who signs the distribution request paperwork on February 14th, 2010. Participant is subsequently rehired on February 20, 2010, BEFORE any distribution is processed.

Plan does not permit in-service withdrawals.

I believe distribution cannot be made. But I was just wondering if there is anything "official" from the IRS or in the regs that specifically states this. As I said, I'm certain I've seen discussion, and I think on these boards as well, but I've done several searches and can't seem to find it. Thanks!

A census taker visits some number of families and determines that on average they have 2.6 children.

(a) What is the least number of families in this census?

(b) Given that the least number of families was polled, how many children in total did the families have?

© So, (a) and (b) are too easy? Agreed. So, in how many ways may these children have been distributed among the families (e.g., one family could have had all of them, or they could have been split among two families, etc.)?

Calendar year 401k plan uses prior year testing method for ADP/ACP. Some employees terminate in late December and are paid the following January, with elective deferrals coming out of the last paycheck (I think these are matched as well).

Sponsor would like to exclude such contributions from ADP/ACP tests.

Here is language from definition of "includable compensation" in the prototype document:

To be included in determining an Active Participant's "deferral ratio" for a Plan Year, "includable contributions" must be allocated to the Participant's Account as of a date within such Plan Year and made before the last day of the 12-month period immediately following the Plan Year to which the "includable contributions" relate. If an Employer has elected the prior year testing method described in Subsection 1.06(a)(2) of the Adoption Agreement, "includable contributions" that are taken into account for purposes of determining the "deferral ratios" of Non-Highly Compensated Employees for the prior year relate to such prior year. Therefore, such "includable contributions" must be made before the last day of the Plan Year being tested.

Are there any permissible methods to exclude these contributions from ADP/ACP?

Thanks for your help.

As part of the accountant's audit report for the New Jersey state pension plans:

http://www.state.nj.us/treasury/pensions/p...ioncombined.pdf

on page 20 there's this:

"Income Tax Status

Based on a May 2007 declaration of an outside tax council retained by the Attorney General of the State of

New Jersey, the five pension funds/systems (TPAF, PERS, PFRS, JRS, and SPRS) comply with the qualification

requirements of Section 401(a) of the Internal Revenue Code."

Apparently complying with 401(a) is important enough for a government plan to note in the audit report.

The problem is that the plans do not comply with at least three sections of 401(a):

401(a)(16) - maximum benefits - Lots of 47 year old cops retiring with benefits over 415 limits.

401(a)(17) - maximum salary - Lots of school superintendents making over $245,000.

401(a)(29) - Obviously minimum funding requirements are not satisfied under PPA

Would this mean that New Jersey's plan is not qualified and whatever has been set aside is taxable to plan participants?

Please help. We are not in agreement in our office....

What 403b plans HAVE to file a Form 5500 for 2009 and beyond? All? Some? Only ERISA plans?

Is there a comprehensive list of employers that must file the Form 5500?

Thanks for any guidance you can provide.

We have a small employer that allows his employees to go out and get individual health plans, which run through the section 125 plan pre taxed. We were always aware these had to be individual plans - but can't really find the definition of "individual plan" A member of the employers went out and got a State Bar plan (in his name) and is calling it an individual plan. When the policy is part of a group trust - doesn't that disqualifiy it from an individual plan? Any comments or revenue ruling on this one would be greatly appreciated!

A large VEBA had 100+ whole life insurance policies. The policies have been surrendered. The cash went back into the VEBA and is being used to pay retiree benefits. The cash received was more than the premiums paid, so there was a gain. Is that gain taxable to the VEBA? the person whose life was insured, the retiree getting benefits?

The insurance company issued 1099s in the name of the person whose life was insured. That doesn't make sense to me. If the money went back into the VEBA, I wouldn't think it would be taxable at all. However, VEBAs aren't my forte, so I'm asking for help.

403(b) about 25 participants, some have loan balances, same company has a 401(K) that has a loan and rollover provision. Can they rollover the loan balances to the 401(k)? My guess is YES. Another question, what if the participant who wanted to rollover the 403(b) loan balance had an outstanding loan in the 401(k)? The 403(b) loan rollover would not be treated as a new loan would it?

403(b) about 25 participants, some have loan balances, same company has a 401(K) that has a loan and rollover provision. Can they rollover the loan balances to the 401(k)? My guess is YES. Another question, what if the participant who wanted to rollover the 403(b) loan balance had an outstanding loan in the 401(k)? The 403(b) loan rollover would not be treated as a new loan would it?

since they are updating some things on the computer and somewhat shutdown processing stuff, I have turned to the dark side (no, I am not running DB plans)...

this is the ugly 'invisibles', the clothes are there but the person (people) aren't and you have to figure out what the movie is, from the clothes or the background setting - then type the title correctly into the box correctly to see if you are correct. after nasty ADP testing season you deserve to get frustrated by something else (other than poor basketball picks)

I have a client that is an LLC and has provided K1's to partners of the entities that own the LLC. The income I guess is an amount to cover their taxes. The Accountant will not provide K1's stating that since the entities own the LLC they are not eligible for the Plan. However if the partner is receiving the K1 not the entity shouldn't they be eligible for the Plan?