Can a business with non-union employees operate and contribute to both a Simple IRA and a profit sharing plan at the same time? Based on the Simple IRA section in IRS pub 560 I am under the impression that it is not permissible unless the profit sharing plan is part of a collective bargaining agreement. And even if there is a collective bargaining agreement contributions can still only be made for one plan or the other per each employee, correct? Am I missing anything here or would a business who operated both plans for more than one year be out of compliance?

Thanks

401(k) plan sponsor files Form 5500 for the first plan year without attaching independent auditor's report ("Accountant's Opinion"). Dept. of Labor's EFAST division spits out letter requesting completion of the return. Plan sponsor engages independent auditor and sends several letters to EFAST updating them on progress. No further communication from EFAST is received.

Is the plan "under examination" under EPCRS Sec. 5.03?

It was always my understanding that the "examination" part of "under examination" was limited to examination or investigation by IRS Employee Plans division and not other agencies. However the model Plan Sponsor's representations in Appendix F are a bit ambiguous:

"To the best of my knowledge (1) the subject Plan is not currently under examination of either an Employee Plans Form 5500 series return or other Employee Plans examination."

Comments appreciated.

Here's an interesting issue.

An employer self-insures its STD. It allows employees to "buy" coverage through their cafeteria plan, either with salary reduction or after-tax premiums. As is typical with cafeteria plans, there is no separate fund and this is OK due to the DOL non-enforcement position for employee contributions made through a cafeteria plan.

The question.

Will the STD payments be tax-free to the employees who contributed on an after-tax basis? Code Section 104(a)(3) provides that payments are tax free if made from insured plans, and "arrangements having the effect of ...insurance." If there is not a separate fund apart from the employer's assets, would this type of self-insured arrangement qualify the participants for the section 104 income exclusion?

I believe the answer is yes, but would love to hear any well-reasoned opposing view.

George

Can you exclude classes of NHCEs from the Safe Harbor contribution. Assuming you pass 410(b) and the plan is not TH they get no ER contrib and it is OK?

Or do you then somehow create two plans (like the early participation rules) 1 SH and 1 Non-SH?

Not 98-52: "a prescribed level of safe harbor matching or nonelective contributions are made on behalf of all eligible nonhighly compensated employees"

Not sure where to find the answer to this question.

Cross Tested Plan

The document (Lenorad Street) states full year compensation is to be used for allocation purposes and has 1/1 and 7/1 entry dates.

Can I use compensation while a participant for testing? Any thoughts would be greatly appreciated.

1. The instructions for Schedule A says that if a plan elects PPA-simplified reporting I only have to fill in A, B, C & D and jsut the commissions/fees info in Part I.

Is there some place on the forms that the plan elects this?

2. For 1(e), persons covered by the contract, who is considered "covered"? Is it the number of people who have a position in the contract? Or is it everyone with an account balance, since, if the plan is participant directed, they could, indeed, be in the contract but decide not to.

If a company made systematic errors (over the course of a few years) that led to it consistently making untimely contributions to a plan and wants to file for a VFCP exemption, will the DOL treat all of those late contributions as a single transaction (and therefore not subjecting the transactions to the three year rule limitation)?

I saw on the DOL's FAQ sheet re: VFCP that they said that they (unofficially) will treat some sets of multiple transactions as a single transaction. Does anybody know if there are specific rules they apply? Would this company's scenario fall into the DOL's view of a 'single transaction'?

thanks for your help.

I believe we've discussed that a new plan effective say 1/1/08 can be treated for funding purposes as if 1/10th of the 415 limit was available (allowed) on the first day of the plan year (1/1/08).

Is this a special rule just for the first plan year only ? or for the second year (2009) for funding purposes could you treat it as if you had 2/10ths of the dollar limit on 1/1/2009 ?

I have a client tha has two 401(k) Plans - One that we administer and another that we do not. A participant has taken a hardship withdrawal from the plan we administer and I was curious if the suspension extends to both plans or just our plan. I am thinking that it would not, but I am not sure and have not been able to readily find a site. If you know the answer or can provide a site, please advise. Thanx!

To the tune of Sgt. Pepper's Lonely Hearts Club Band

It was 20 years ago today

When Congress had to have a say

That they really don't like single pay

So they want to make it go away

They voted on TAMRA back then, so we're celebrating it today

It's seven-seven-zero-two-cap-A

It's seven-seven-zero-two-cap-A

Where MEC rules are all codified

Seven-seven-zero-two-cap-A

Who knew endowments could be modified?

Seven-seven-zero, Seven-seven-zero

Seven-seven-zero-two-cap-A

Watch out when taking income

The tax rules have been bent

Withdrawals can be taxable and loans plus ten percent

So when know all the facts

You can't avoid the excise tax

Unless you hold the policy

Death benefits are tax-free

Pay attention to the seven pay and don't change it in any way

It's seven-seven-zero-two-cap-A

It seems to me that I have seen somewhere that amounts forfeited under a defined contribution plan are supposed to be reutlilized (to defray expenses, reduce future contributions, etc.) within a certain time period, but I have not been able to find anything specific now. Is anyone aware of any IRS guidance on this subject?

Are contributions to a 457 plan required to be included in the average benefits testing of a 401a New Comparability plan of the same employer?? And along the same lines are there separate 415 limits or does the $46,000 limit apply to the combined plans??

I have a owner only plan where the owner has two sole proprietor business that have both adopted the plan. For 2007 his net Schedule C for business 1 is $150,000 and his net Schedule C for business 2 is ($200,000). Would the correct way to handle this be to use a combined net Schedule C of $150,000 ($150,000 for business 1 and $0 for business 2) and to instruct the owner that only business 1 can take a tax deduction for the contribution (in case that wasn't obvious)?

Suppose a participant is at the 415 dollar limit, terminates employment and wants a lump sum. In determining the lump sum benefit, the greater of 5.5%, the plan rate or a rate that produces a benefit of 105% of the benefit using minimum value lump sum interest must be used.

Must this same methodology be applied if a participant is not at the dollar limit but is at 100% of final average comp?

The 404 cushion amount in PPA is currently 50% of the funding target. I thought I heard that this should have been 50% of the funding target AND 50% of the target normal cost... and that adding 50% of the target normal cost to the cushion amount would be in technical corrections.

As far as I know, the tech corrections bill now in Congress doesn't have this item. Can someone update this information?

Thanks...

Is there an annuity product that lets you choose which index you want to be attached to, and then guarantees that you will receive that interest rate, and never lose any principal? How can investment companies guarantee income when the market is taking such losses? Do these types of funds generally have higher fees? It just sounds too good to be true.

Thank You.

Company has a number of ex-employees on COBRA. Company wants to terminate all its group health plans. Contemporaneously with the termination of the Plans, the remaining employees will become "employed" by a leasing organization or PEO for payroll and health plan purposes. The remaining employees' jobs will essentially be the same.

Can the Company terminate the COBRA coverage for the ex-employees because the company no longer maintains a health plan for the benefit of any employees?

Are Native American corporations (tribes, casinos, etc...) required to file a Form 5500?

Does the Universal Availability requirements under IRC section 403(b)(12) and the regs 1.403(b)(5) apply to 403(b)(1) and 403(b)(7) plans? I feel they do apply and the only real differences between a Church 403(b) and one for other eligible employers is that no document is required unless for a 403(b)(9) Retirement Income Account and the possible effective date of the regs

Anyone have a mandatory DB Contributory Plan?

If so, how to handle the ee contributions for determing Target Normal Cost?

Is it Gross Normal Cost minus ee contribs? Something Else?

Any help appreciated, thanks.