Participant dies with an outstanding loan of about $3,000. The total account balance, including loan balance) is only $3,500. The sole beneficiary (non-spouse) elects a cash distribution.

Is the entire $3,500 taxable to the beneficiary? Or, is the outstanding loan balance taxable to the decedent and the remaining balance taxable to the beneficiary.

Any help with this situation would be appreciated!

A large contribution was made early in 2006. Some of it was reported on the

2005 Schedule B. Some of it was reported on the 2006 Schedule B. Some of it

has not yet been reported.

Can the 2007 Schedule B list it as being made in 2006? Will this cause any

problems? Does this violate any rules?

Thanks for any help.

My company, a large health care organization will be receiving proposals/presentations from two consulting companies to be our executive comp consultants. Does anyone know of good questions/issues to ask during these presentations to better evaluate them? Any good sources on issues/questions?

Thanks.

It is my understanding that contributions to 403(b) and Keogh for self-employed persons must be aggregated for calculation of the 415 limit, but that a separate 415 limit would apply if the individual also participated in a qualified plan (i.e. a university), for a possible total 90k limit.

Am I correct?

Does the situation change if the individual has a SEP-IRA instead of a Keogh as a consultant apart from his work at the institution, or does the same result occur.... 45k total for the SEP and 403(b), and a separate 45k for the institution's qualified plan?

Thank you. Any citations to reference materials that explain how aggregation works across many plan types would be great.

Can a NQ deferred compensation plan allow for participants to choose investments without creating some rights to those funds? It would seem that as long as there was a substantial risk of forfeiture on those assets including the earnings from investments, you wouldn't have an issue.Thanks

I've read what I can find regarding the use of IRA to form or purchase a company. I've got a client that is proposing purchasing a business, forming an LLC in which his self-directed 401k account and him are equal owners. It just seems wrong but the TPA is saying it's fine. It smells like a PT to me. Any thoughts? Thanks!

We have 3 physician practice groups and 1 management company that comprise an Affiliated Service Group (ASG) through 9/30/07. They participate in the same plan, Plan A. We break the ASG effective 10/1/07 and create new retirement plans for the 3 practices groups, Plans B, C, and D. How are the minimum coverage test (410(b)) and ADP/ACP tests for Plan A run for 2007? Who is counted and what compensation is considered?

I have searched the boards as I believe that Tom Poje answered this one at some point in the near past, but I can't seem to find it.

I have a 401(k) plan where the plan doc excludes bonuses from compensation for purposes of 401(k) deferral contributions & nonelective allocations. As far as ADP testing, the doc defines compensation for ADP testing as 414(s) comp.

If I use bonuses in my definition of compensation for ADP testing, the test "fails by less" than if I use the compensation off which deferrals were calculated. It's not a great amount, but enought to reduce the required refunds for the HCEs.

Is this acceptable?

This is an example I received from an ERISA attorney. I am under the impression that you cannot fix the 415 violation using the catch-up for the calendar year that ends in the plan year. Am I wrong? (I thought it was "use it or lose it".)

Participant B, who is over 50 years old, had catch-up contributions of $1,000 for 2005 due to a correction of an ADP testing failure for the Plan year ended March 31, 2005. This equaled Participant B’s pre-tax deferrals of $1,000 for January through March, 2005. From April 1, 2005 to December 31, 2005, Participant B made $14,000 of pre-tax deferrals (equal to the $14,000 limit of Code Section 402(g), with no catch-up contributions). Participant B made pre-tax deferrals of $4,000 from January through March, 2006, and received $6,000 of matching contributions for the Plan year ended March 31, 2006. Therefore, his annual additions subject to Code Section 415 for the Plan year ended March 31, 2006, prior to considering transition benefit contributions would be $24,000. If the transition benefit contribution formula provides a contribution of $30,000 for Participant B, that amount must be reduced by $10,000 in order to satisfy the Code Section 415 limit of $44,000 for the Plan year ended March 31, 2006, unless Participant B’s pre-tax deferrals can be recharacterized as catch-up contributions. $3,000 of Participant B’s pre-tax deferrals from April 1, 2005 to December 31, 2005, may be treated as catch-up contributions because only $1,000 of catch-up contributions were previously taken into account for 2005. In addition, Participant B’s $4,000 of pre-tax deferrals between January 1, 2006 and March 31, 2006 may be treated as catch-up contributions. Therefore, $7,000 of Participant B’s pre-tax deferrals may be treated as catch-up contributions, and only a $3,000 reduction applies to Participant B’s transition benefit contribution. A $27,000 transition benefit contribution should be made to Participant B’s Plan account for the Plan year ended March 31, 2006.

What is the valuation deadline for plan years starting 1/1/08? It's 4 1/2 months right... Is there a lives restriction that it does apply for? Like under 100 lives?

If an employer waives the deductible for a HDHP (such that employees have first dollar coverage), can the employer go back and correct this first dollar coverage by making the employees pay the waived deductibles? Or does the failure to collect the deductibles mean that the employees will have excess contributions to their HSAs and will face an excise tax unless the contributions are taken out of the HSAs?

Please let me know if you have any inisght or experience with this issue. Thanks.

If you have a calendar year 401(k) plan that opted to include match contributions for the first time in April, do you only include the eligible compensation from April – December for the ACP test?

I must admit I've never seen this issue before and haven't been able to come up with a definitive answer. I have a potential client who is the 100% owner of an S-Corporation that is a member of an affliated service group. The ASG sponsors a safe harbor 401(k) plan for all members of the ASG. My client is also the 100% owner of a separate sole proprietorship which receives 1099 income from consulting. It is my understanding that none of the income from the consulting work is derived from the ASG.

My question is whether being a member of a controlled group with a member of the ASG taints the sole prorietorship so that it cannot sponsor it's own plan? I haven't been able to find anything one way or the other, and it doesn't make sense that a completely separate business can be dragged into the ASG, but I thought I'd put the question to you.

Would a first year 401(k) plan that is a eligible automatic enrollment arrangement include permissible withdrawals in the test balances?

If an unmarried participant in a qualified profit sharing plan designated a non-spouse individual as his beneficiary, does his later marriage nullify the then-existing designation? More specifically, is the original designation of the non-spouse individual as beneficiary valid even though the participant later married and did not obtain his spouse's consent to waive her survivor benefits?

Please let me know if you have any inisight or experience with respect to this issue. Thanks.

Does anyone use Hartford and MFS in the Financial Institution Interface to import their gains/losses? I keep getting errors. I tried to use the text, comma delimited and fixed width file formats from the MFS website and none seem to work. Same with the Hartford reports. Any help you can provide will be helpful. Thank you.

Corp's fiscal year is 4/30

DB plan is on calender year.

Can employer make 2007 plan year contribution in December 2007, then the plan year 2008 contribution in April 2008, and decuct both in 4/30/2008 fiscal year?

Any different answer if they make 2007 plan year contribution in Jan 2008?

I have gone from a large firm with a high deductible plan with an HSA feature to very small firm that does not provide insurance benefits. My new employer is willing to pay half of my premiums for an individual insurance policy. At this time I am utilizing my COBRA benefits. I would like to continue my HSA. Could I have my employer contribute the portion of my insurance they are willing to pay directly to my HSA account and then I pay my premiums for COBRA (and then my own high deductible plan) from there?

After explaining the HSA to my employer, they are potentially interested in setting it up for themselves. What kind of information could I provide to them and where are the best resources for researching this option.

I am looking for a definitive answer and possible site verification realtive to the cummulative affect of form 5330 as it applies to prohibited allocations.

An individual received a prohibited allocation for numerous years and as of this point in time it has not been corrected. For simplicity purposes, assume the individual's allocation for 2000 was $1,000 and 2001 $2,000.

When completing the form 5330, for 2000, the excise tax would be $500. Would the 2001 form 5330 pay excise tax on $3,000 ($1,500) or $2,000 ($1,000)? What about going forward through 2007?

any assistance would be greatly appreciated.

Tried a search but didn't find this topic.

In a situation where someone dies, and has no spousal waiver on file, but names a child as sole beneficiary...

What sources would you perhaps use to attempt to determine if there is in fact a surviving spouse? This isn't a plan we administer, so I have no idea whatsoever what plan records they have available. One could perhaps ask the child, but I don't know how old the child is - obviously you wouldn't want to traumatize a young child with such questions! Perhaps employer health insurance records, if they had any? Is the existence or non-existence of a spouse required information for health insurance? Just looking for ideas of possible sources. Thanks in advance!