Can an ERISA 403(b) plan use entry dates so long as they comply with the 410(b)(4) rules on service? For example, can they have a 90 day waiting period for all employees, and then let all employees in on the first day of the quarter following 90 days of service?

Thanks in advance

Plan fails both the ADP and the ACP. Client processes refunds for the ADP failure. After the refunds are processed, the test is deemed to pass. (However, due to the leveling method, if the test is rerun, it would show a failing result.) Now in order to correct the ACP failure, deferrals will be shifted from the ADP to the ACP. Now, we know that the ADP is passing by virtue of the deemed passage because of the refunds. After we shift, we are required to pass the ADP. Do we actually run the ADP test again? If so, there is a great chance that the plan will fail (again because the leveling doesn’t “actually” correct the issues. Am I correct? Or do we simply take the ADP post corrections and utilize that in the aggregate and not recalc the actual tests. (I hope that this makes sense.) Any comments would be greatly appreciated.

an ESOP that had a 7 year graded schedule, the new restated draft doc states that any participant who has an hour of service after 2006 will now be on a 6 year graded schedule. Is this now the case for all ESOPs who had 7 year graded?

We have a takeover plan for an employer (sole proprietor) filing a 5500EZ.

There are no employees and the employer is the sole participant.

It was noticed that the EIN used for earlier filings was the SSNo. of the employer.

For the 2007 filing we tried to file the form electronically, but were unable to do so since the software (DATAIR) does not accept the data and returns an Error message.

Any advice as to how we should go about. Surely we would have to amend the earlier years filings using the appropriate EIN.

We are an employer located in MA with a fully insured dental plan that is issued in NY. Does anyone know whether or not we are required to provide dependent coverage until age 25 for non-students? We have placed a call to our acct mgr but he is unavailable for several days so I thought I would try this venue. Thanks.

One man DB plan. The client has made contributions exceeding the 404 maximum deductible contribution by $80k+. The client wishes to terminate the plan. The plan appears to be overfunded on a termination basis as well.

I understand what happens to the excess assets in an overfunded plan, but I'm not sure how to deal with the undeducted contributions. He can't jsut take them out. There was no mistake in fact which could give him a basis for applying to disallow the deduction.

Somewhere I thought I recalled amortizing them over an extended period and deducting them as an ordinary business expense, but I'm not sure where I got that from.

Anyone have any insight?

Thanks!

Employer hires an individual who produces a Social Security card. Individual works long enough to meet 401(k) plan entry requirements, but declines to make salary deferrals. Employer learns, when uniformed officials appear at their door to deport him, that the individual is an illegal alien.

Do we include him as a zero in the ADP/ACP test?

He was still employed on the last day of the plan year. Is he due a top heavy minimum contribution?

Looking for a source that explains what should be included in a Plan Document beyond what is is the SPD.

Very basic question on 401(k) deferral elections / salary reduction agreements but never really thought about it until a client just asked.

The basic plan document states that a participant may elect a certain percentage OR dollar amount to be withheld from pay. Can the plan be amended and only allow of having a certain percentage withheld and no longer allowing a specific dollar amount to be withheld each pay period?

Thanks!

In order to pass our ADP test we have to decrease the cap on our HCE deferral % from 15 to 12. This will create a problem for a select group of HCE's who are at the bottom of the HCE salary scale. With a 12% deferral cap in place they will not hit the 402g limit. My question is if the do not hit the 402g limit, where does the catch up come into play. Do participants have to hit the 402g limit in order to have catch up contributions? Does the HCE just elect a 12% deferral and because that is the max they can defer, they can also elect the catch up?

Thanks...Mike

nothing seems to fit. Some questions:

1. I read the instructions to 5310-A to require that present value of assets spun off is not less than the present value of benefits spun off and de minimus to be exempt from filing. I consistantly read others who advise that satisfying one or the other is is enough. What's right?

2. The 5310-A is required 30 days "prior to merger, consolodation, spinoff or transfer of plan assets ... " Is that 30 days prior to the spin-off date specified in the agreement (the closing date), or is it the date of actual transfer? It seems unlikely data will be available on closing date.

Thanks.

We are going through our first termination of a cash balance plan. The plan is a calendar year plan that is terminating on July 31, 2008. We are calculating a contribution based on the salaries through July 31st. The question I have concerns the interest credits. For example, assume that distributions will be done on April 1, 2009. My opinion is that the interest credits continue until the actual date of distribution and thus the final contribution amount would not be determined until April 1st. The other option would be to determine acount balances with interest credits at July 31, 2008, make the contribution based on the July 31 asset value, and then the account balances would be adjusted with actual gains and losses until April 1st. Since this is a defined benefit plan, I don't think this second option is correct, but I just wanted to see what ideas other people have.

Thanks.

Feel free to add any comments.

What is an appropriate differential between smoker and non-smoker rates? What legal requirements surround implementation of these?

Jill owns 100% of company A and owns 48% of company B.

Jack, ex-spouse of Jill, owns 48% of company B and Johnny, son of Jack & Jill, owns 2% of company B.

Company B is a manufacturing company and company A is a distributor of products made by B and other companies.

1) Are A & B a controlled group of companies?

2) Is this a brother-sister organization or affiliated service group?

The issue:

A maintains a DB plan. Does the plan need to cover the employees of B?

Does anyone know whether Form 843 or Form 5330 is the appropriate form to file for a refund of an overpaid excise tax that relates to a Code 4975 violation, i.e., a late transmittal of contribution to a 401(k) plan?

I understand the Form 843 is the form generally used for refunds, but the instructions to the Form 5330 indicate that it is the appropriate form to be used to file a refund for an overpayment of excise taxes (but does not include a "claim for refund" form to attach to it.)

Any help is much appreciated.

An employee who was covered under employer's 401(k) Plan accepted a position in another of the employer's offices. However, the new office is run by an agency. Those employees are paid by the agency which is reimbursed by employer/plan sponsor. Participant terminated employment with plan sponsor and is no longer on any of plan sponsor's benefit plans. Instead he is covered by the agency's benefit plans. Participant wants a distribution from the 401k plan. Is this a severance from employment under Code SEction 401(k)(2)(B)(i)(I)? We are asking because the individual would still have to be credited with service as a leased employee. Since this participant is fully vested, it is not an issue in this case. Would the answer be different if the participant was not fully vested and still accrued vesting service as a leased employee?

If the plan provides that the employer will make a contribution of a set amount, in this case $30,000, to an employee's deferred compensation account each year, is there any prohibition under Section 409A to the employer increasing the amount at its discretion.

The plan document provides that employer will make a contribution of $30,000 to the employee's deferred compensation account by the end of the fiscal year. Could the employer change the amount to say $80,000? If so, does it need to amend the document before the last day of the prior fiscal year?

Under the terms of the plan, the employee has no discretion to make salary deferrals, rather, all funding comes from the employer contribution.

I'm looking at establishing a Roth IRA in a Target Retirement Fund. Does anyone have a preference on which one to choose, or is there even much difference in them? Right now, I'm looking at Vanguard 2040 Retirement fund, or the T Rowe 2040 Retirement fund. Is there really much difference in Vanguard or T Rowe?

Thanks.

403b participant still working at same employer (a major university) for 30 years has built up significant pre-1987 contributions which have a RMD starting at age 75, these are commingled with post 1987 contributions which have an RMD starting at age 70. I see no documentation showing what are client’s pre-1987 contributions. Client would like to defer starting RMD as long as possible.

Is it possible for 403b plan to segregate these two amounts, roll the post 1987 amount into an IRA, and for the pre-1987 amount hold it in 403b until age 75, than roll at age 75 to an IRA?