A state legislative staffer has asked whether any state lets persons who are not employees or usual kinds of contractors participate in its 457 deferred compensation plan. The staffer specifically mentioned Medicaid providers (presumably physicians and other professionals who contract as individuals with the state Medicaid agency). I think that doing so might require an unusual interpretation of the law and regulations for 457 plans. But it doesn't seem out of the question, since such providers MAY be "independent contractors" under IRC subsection 457(e)(2). If anyone knows of a state that has tried this or any similar expansion of 457-plan eligibility, I would like to know about it. Thanks.

If a pension plan is charged an erroneous investment fee due to a billing error but the fee amount was caught and subsequently returned, is that a prohibited transaction under Section 4975©(1)(D)? Does the plan have to file a Form 5330 and the investment company responsible to pay the excise tax if applicable?

I always thought PEO was just a fancy name for a leasing company, but apparently there are significant difference between the 2 entities. Can someone describe briefly (or not so briefly) how they are different and how each operates?

Does anyone know what would happen to a profit sharing plan that only has profit sharing contributions (no deferrals or other contributions) that does not make profit sharing contributions for over three years? Does the IRS consider this to be a partial plan termination?

I have an EOY cash balance plan that we need to do an AFTAP certifcation by 9/30. My 12/31/07 valuation has determined the accrued benefit used for funding for 2007.

How would you do a 1/1/08 AFTAP? Lump sums in the cash balance plan are not subject to 417(e). A lump sum would be the hypothetical account balance. How does that come into play when determining the 1/1/08 Funding Target?

I have discovered what most of you may know: the Board's Search function is case sensitive. So, a word at the beginning of a sentience, if properly capitalized--or a word improperly capitalized--will not be found if the search is with a lower-case initial letter.

Does anyone know how to circumvent or disable this case sensitivity, or do we just conduct a search like this--employee* Employee* EMPLOYEE*--if we want to find all posts/topics containing the word employee or employees?

Thought this would have been discussed but I sure can't find anything.

New Company starts a plan in 2008.

I want to use Prior Year Testing and use the "Early Participation" rule and thereby exclude the otherwise excludibles but add back the HCE (owner).

I think the test becomes void as the HCE is tested against no one. Pass.

2009

Prior year testing, I am again looking at a null set of NHCEs so year 2, the only HCE (Owner) is tested against nothing (rather than 0). Pass again

2010

Safe Harbor as there are actually a lot of employees and now they are in the regular test.

Sound right?

Does anyone know why this RR was even issued?

What prompted it ?

What is it trying to resolve ?

Any links to any discussions or articles on the subject would be greatly appreciated.

Former participant in a P/S Only Plan (10 years ago it was only a P/S Plan, now it is a 401(K) Plan as well) was 0% vested in his P/S account balance when he terminated. Entire account balance was forfeited per document at the time of termination.

Now the participant has been rehired 10 years after original termination. Per document it seems that the 0% vesting along with having been gone for more than 5 years (5 consecutive breaks-in-service) creates a situation where former participant is treated as a new employee and must serve the eligibility period all over again.

Vesting seems to be the issue that needs some feedback. The 10 year gap period clearly restricts the use of post-break service from being credited to pre-break service, but as we read the document it appears that there is nothing that prevents the pre-break service (two vesting years of service) from being included in post-break vesting calculation going forward. Thus, he will begin with vesting service of 2 years and move forward upon rehire.

With regard to the pre-break vesting service crediting, does this sound like a likely treatment given the fact pattern above?

Thank you for any feedback and insight.

What does the bite out of the lower right-hand corner of the suitcase (?) in the list of new posts/active topics mean? That I've posted under that topic?

Can anyone suggest a plan administrator's manual for 403(b) plans?

Well I'm in a bit of a bind. I was just told that I had an IRA opened for me about 16 years ago by my father. He put money in it and fostered it for a while. But through his moving out west he can't find any of the info on it. And with his current age he can't remember what firm he was with. I have looked everywhere and can't find a lead. Is there any way to find a lost Roth IRA?

Will the EBSA accept a scanned version of the schedule B or do they require the original signature from the actuary?

I've got a couple questions...

1) are required quarterly contributions due for all plans that are less than 100% funded? or

2) is it just for underfunded plans with souls over 100 or is it 500?

Thank you,

Andrew

I have been putting off taking the ASPPA DB test for years. Looks like I need to get started on it. This is the second time this has come up this month.

A prospective client is making a lot of money now. He wants to put in a DB plan and fund it to the maximum this year and next.

Can we put on a 401(k) Plan also?

Is it true that they could have a 3% SHNEC plus a 3% discretionary nonelective Contribution. Will they also be able to defer the 402(g) limit?

What is the 415 limit on a combination like this?

Also, do I need to watch out for the gateway requirements?

Is a Funding Deficiency considered to be a negative Carryforward Balance in calculating a 1/1/08 AFTAP ?

A client has told me that he's been advised that he may make a 2007 contribution to the company defined benefit plan for a person who received no W-2 for 2007. Does someone have a cite to support this?

A little discribtion: This is a sole-proprietorship run by the husband. His wife was an employee in prior years, through 2006. She was not paid during 2007/2008. He is now funding the defined benefit plan for 2007 (his tax return is on extension until 10/15/08) and he tells me that per his discussions with pension folk (not his paid advisor though, who is currently not available), that he can make a contribution for the non-employee / wife.

Has anyone located or seen a draft of the "new" 402(f) notice? If so, please tell it I am looking for it.

1.401(l)-2 of the Treas. Regs. states that, in performing an integrated profit sharing allocation calulation, the maximum excess allowance for a plan year is the lesser of: 1) the base contribution %; or 2) the greater of: a) 5.7% (as required to be reduced if the integration level is different that the taxable wage base) or b) the % rate of tax under OASDI, currently 6.2%, (also as required to be reduced for fractional taxable wage base concerns). Therefore, if, for example, an integration calculation is performed with a base contribution % of 7%, the regs seem to indicate that the maximum excess allowance could be as a high as 6.2%. However, I have never seen anything greater than a 5.7% maximum excess allowance allocation in any prototype plan or considerd within any general discussion of the topic. Is there a problem with exceeding the 5.7% limit that is not evident from simply reading the regs?

I am trying to upload vesting information to John Hancock. I do not have the module that lets RA link to them.

Does anyone know of a report that will print in an Excel compatible format and have the vesting for Discretionary nonelective seperate from Safe Harbor?