I am new and am unclear on where to post a question like this.

I am an employee of a very small company. There are 2 people in the company and I am the employee. I get a W-2. We are a web services company. The company has been around for 12 years or so and I have been a part-time and then full-time employee for about 9 years. I have been full-time for 7 years.

During this time I have never received a salary increase, except for when I went full-time. There are no benefits whatsoever. The good thing about working for said company is the very flexible schedule provided. In the past few years, while I keep track of vacation and sick time myself, there seems to be no set limits. I take very little time off so I suppose it's not an issue. But the flexibility is good. I do work evenings and weekends sometimes to keep up with work and I consider myself more than an employee. My boss and I have become friends over the years, albeit not "best" friends. She does work for other clients on her own, too.

I would like more compensation. I responded to a posting looking for programming expertise. I landed the contract worth several thousand dollars. I could have taken on this client on a 1099 basis but chose not to do that and shared the opportunity with my boss with the stipulation that I would have 50% of the profit realized from this client. My boss agreed. However, now my boss seems to be backpedaling on this and has stated that would rather give me a bonus of some sort. I am told the problem is a book-keeping one and since the hours worked on this contract per month are variable, it's difficult for boss to figure out. Boss has payroll company and bookkeeper. Other business my come from this new client and I would like a piece of the action for that, too.

Incidentally, we have only one other major client. I do the lion's share of work for that client and all the work for new client, plus anything else asked of me. I usually work out of my home office but are now going to the city for major client 3 days a week. I am receiving no extra compensation for that except parking allotment.

My question was going to be this: Can I receive a W-2 AND 1099 from my boss, segregating the 1099 work for this new client. But now I think the answer to this is 'no'. I could have received a 1099 from the new client only.

Any comments would be welcome on how to handle this.

THANKS!

I just found out my ex-husband (divroced in 1998) did not file a QDRO with his employment. I have moved since then and live in another state. Do I have to get a QDRO signed in state and county of divorce or can I get one where I currently live. Need help desperately with this situation.

I am trying to derive rough estimates of the value of lump-sum payouts for workers separating from a job with a DB plan before retirement (using national survey data) for a thesis paper. My understanding (I am not a practitioner in this field) is that the lump sum payout for DB plans is the present value of the annuity payments a worker would have received in retirement (adjusted for mortality risk). My question concerns valuing the lump sum payment option (assuming the plan allows one) for workers who leave their job long before retirement age (say, age 40). In that case, does the present value of the annuity paid in retirement need to discounted back to the worker's age at separation? In other words, the procedure I had in mind first involves taking the PV of the annuity payments in retirement, starting at, say, age 65 and based on male/female life expectancies at that age; then, as a second step, discounting that amount back to the date of separation. Is this (very roughly) how the actual calculation works and, in particular, is the second step necessary?

Thanks for any help (and I apologize if this is too elementary a question for this forum)!

I am working on restating 2 Documents for a client. One Plan is a 401k Plan that excludes all employees performing work covered by Davis Bacon Contracts. The other Document is a Prevailing Wage Plan that excludes all classification of employees other than those covered byt the attached Davis Bacon Contract.

Question

1. It sounds to me that the 401k Plan is excluding all employees from the Davis Bacon Plan? The former TPA states no that they are excluding compensation made with the Davis Bacon Plan.

2. Doesn't 410b need to be done? If so for each Plan excludinig each classification? If compensation was excluded shouldn't 414s test be performed?

Any other thoughts?

The trust holder for the company's defined benefit plan issued duplicate checks for the plan's consultant services. The consultant cashed both checks. The consultant is now issuing a check to the trust holder in the amount of the duplicate payment. Does this scenario constitute a prohibited transaction? Are there any reporting obligations required on the part of the plan? Thanks.

Have you heard any rumors that Accudraft has been sold?

Let's say an employer maintains a 401(k) plan for its employees. A participant retires and then starts receiving minmum distribution payments in connection with his/her attainment of age 70 1/2. The checks are payable to the individual who is the participant and bear the correct social security number. Unfortunately, the participant moved without informing his//her employer of the change of address. Therefore, the checks are still delivered to the same home address in the name of the participant at the same social security number. However, in the meantime, an individual with the same first and last name as the participant has begun cashing the checks although s/he has also been reporting the distributions on his/her tax return. The error has since been discovered and the individual who had cashed the checks is now willing to pay the amount back to the plan.

My question would be what should be done by the plan other than through the SCP program of simplying issuing the checks to the intended participant? I see no qualification issue on the part of the plan since it paid the checks to the correct SSN and to what it thought was the correct address. Similarly the participant should not be subject to the excise tax because the circumstances should make him/her eligible to satisfy the reasonable error test resulting in waiver of the tax. Does anyone see anytihing else here that I have not specifically mentioned?

A client of mine is interested in updating its Plan's definition of Actuarial Equivalence to a more recent table. Are there any issues in doing that? I believe we need to preserve the old basis (as a minimum) during the year of the switch?

I know that some people talk about prices in terms of a percentage of annual revenue. What ranges are you seeing for non-producing TPA firms?

Would a TPA (fiduciary or not) be liable if an employer stops funding the plan so the TPA cannot pay participant claims?

I am trying to track down a copy of the Retirement Equity Act of 1984 (Public Law 98-397). Does anyone have any suggestions as to how I can obtain a copy online. I can't seem to find anything online using google. I need a copy b/c I am trying to determine the genesis for Q&As 4 & 5 of Treas. Reg. 1.411(d)-4. Any suggestions as to how I can retrieve a copy of the REA or the proposed regulation for 1.411(d)-4 would be helpful.

A 401(k) plan was with investment company A and switched to B a few years ago. A was involved in late trading and sent a bunch of settlement proceeds checks to the sponsor. The checks have prior trustees names on them, and B won't take third party checks anyway. The "pay to" description on the check is sufficiently mangled/shortened that the plan sponsor could (probably) deposit the checks to its own trust account. (It's a law firm and yes I mean the firm's trust account, not a plan account.)

Question - although it would be a prohibited transaction to deposit the checks to the firm's own account, writing a check or checks back out of the account immediately would correct the transaction, right? Would there be any lingering effects from this PT, other than the need to file a 5330 and pay an excise tax on the use of the money, $1 or whatever?

I'm weighing the hassles of trying to get the checks re-issued versus doing something "wrong" but easy.

thx

The owner wants to use part of his 401k plan account to purchase the whole life policy he currently owns on himself. Is there an exemption for this? I find the exemption for selling policies out of the plan to participants.

For current Datair users that may be using the Automatic Rollover provision:

Have you noticed Datair's definition of Missing Persons w/c appears to negate the ability to auto rollover (within 30 days) a terminated participant when you don't have a forwarding address (i.e. cannot locate them). The provision requires a 3 year wait before you can auto r/o the account balance.

I'm wondering if any Datair document users are even aware of this provision and if any are really adhering to the 3 year wait.

3.11.7 (prototype)

3.13.9 (VS)

Missing Persons. If the Trustee mails by registered or certified mail, postage prepaid, to the last

known address of a Participant or Beneficiary, a notification that the Participant or Beneficiary is entitled to

a distribution and if (a) the notification is returned by the post office because the addressee cannot be

located at such address and if neither the Employer, the Plan Administrator nor the Trustee shall have any

knowledge of the whereabouts of such Participant or Beneficiary within three (3) years from the date such

notification was mailed, or (b) within three (3) years after such notification was mailed to such Participant or

Beneficiary, he does not respond thereto by informing the Trustee of his whereabouts, the ultimate

disposition of the then undistributed vested Account balance of such Participant or Beneficiary shall be

determined in accordance with the then applicable Federal laws, rules, and regulations.

Line 8b. Schedule of Active Participant Data. Check “Yes” only if this is a multiemployer plan covered by Title IV of ERISA that has active participants

Finally looking at my first MB for 2008 and it looks like most multi's are now required to provide the age/service chart? Just making sure because they were always exempted from this before.

What is the timeframe for revoking a prior J&S waiver? I thought it was 90 days prior to benefit commencement date, but somebody else thinks it should be 180 days prior.

thanks!

I recently went to the Social Security retirement website and did some pro-formas for a client for his Cafeteria Plan, using the IRS Quick Calculator I was shocked to see that the reduction in Social Security benefits at retirement was much more than expected. The assumptions I used were as follows: dob: 07/14/61; annual salary; $40,000; retirement age: 68; I then ran the same scenario with a reduction of $5,000 a year and was shocked to see that the reduction in monthly income from Social Security was $134.00 per month or $1,608.00 per year at age 68. The savings (on the $5,000 salary reduction) assuming a 30% combined tax bracket was only $1,500.00 per year?? I realize that the Quick Calculator is only an estmate, but this is much more of an issue than I ever thought. Anyone have any ideas if this is correct or not and how do we handle this objection to participating in salary reduction plans?

Plan excludes hourly employees.

Participant will go from being a salaried employee to an hourly participant in October.

I think the assumption is correct that he will no longer be able to participate in the plan as he is in an excludable class.

For testing purposes/matching, what compensation should be used? Full year comp? Or comp up to the date he becomes hourly?

Any input is appreciated.

I'm having a bit of a disagreement with some of my colleagues. The issue is what amounts are totaled for purposes of the 409A separation pay plan exception. We can't agree on whether amounts that are exempt from 409A under the short term deferral exception are counted against the total permitted be paid out pursuant to a separation pay plan.

In other words, is the following permissible:

409A separation from service, participant receives a lump sum of $200,000.

One year later, (beyond the short term deferral period), participant receives an additional $400,000.

Clearly, the first amount is exempt under the short term deferral excpetion. The question is, is the second?

I'd love to know your thoughts.

This is probably easily answered.

Is there an additional restriction below a 50% lumpsum option when the lumpsum amount exceed the PBGC Guarantee amount?

For an individual age 55 is this $349,238?

If the Notice provided to participants only tells of the 50% restriction, is the Notice in sufficient?

What should we do now? Send additional Notices? Will we be fined?

I am sorry I should have said the Plan is at 75% funding.