Is it permissible to designate that payment be made upon the occurrence of an IPO?

Thx.

I have had a brain freeze & want to amke sure I am thinking about this correctly.

A, B & C have been part of a brother/sister controlled group. A is sold in a stock sale & is no longer part of the controlled group. The sale took place last week; we were informed today. I'm quite confident that employers will move slow enough where nothing will change in the way they operate their plan for a month or more. Ultimately I do kniow that B& C will continue the plan. The document does contain grace period provisions for 410(b).

My question is the ADP/ACP test. It seems to me I perform amy single ADP/ACP test from 01/01/07 through the date of sale & then in a separate ADP/ACP test from the date of sale through year end for A and for B/C.

I'm kind of hurried on this particualr issue & just hoping for some verification.

Thanks in advance for any guidance.

Assume Company A and Company B plan on entering into a purchase agreement where A will purchase some of the assets of Company B. Some employees of Company B will become the employees of Company A. Company B has a VEBA to cover the health benefits of its employees. Is it possible to spinoff a portion of the VEBA assets to the new company to fund the health benefits of the newly "acquired" employees of Company B similar to a pension plan spinoff? If so, would those assets have to go into another VEBA?

Participant rolls his balance out of one plan and into another plan. He has a current outstanding loan in compliance with the loan provisions of the Plan.

Plan he is rolling into allows for loans and accepts his outstanding loan balance and will takeover the loan administration.

Does distributing plan prepare a 1099-R form for the loan "rollover" and use code "G"?

Any thoughts appreciated.

We currently offer Domestic Partner coverage in our medical care plan and under our voluntary accidental death and dismemberment insurance. Does anyone know if it is legal to offer medical benefits to the children of a domestic partner from a previous relationship? I am assuming if we decide to do this, then the amount of premium paid for this classification of dependent would be taxable to our employee?

File Updated on November 12, 2008.

Note: In this version, the year in which the plan year begins and ends must be entered. For more information or a tutorial, please call me (317) 254-0385, during regular business hours

The attached file contains the full retail version of QP-SEP Illustrator Software and More!

After installing the program, retrieve (with ALT+G) the "Unusual" client file in KEO-SAR (see icons after installation) for a comprehensive example (EI and W-2 income, outsie gains/losses, guaranteed partner, ineligible owner, and so on) or just design your own plan - SEP, SARSEP, MP, or PS.

See the COR-SAR program for corporate plan types.

The calculator/solver is driven by the macro ALT+C. If you also need to find the best integration level after using ALT+C, follow with ALT+E.

(a) E.g., you have already solved for a contribution that gave a particular owner a $35,000 contribution with ALT+C. Now use ALT+E to find the best integration level. 50 million calculations are performed and may take a few minutes. Follow the prompts.

(b) E.g., you have made a contribution of $100,000 (shown in cell E-4) by changing the base percentage or by using the ALT+C macro. Now use ALT+E (on cell E-4) to find the best integration level.

SEE TUTORIAL IN INSTRUCTIONS (Start / GSL QPSEP / QP-SEP Instructions)

GSL Galactic Consulting Software Installation (For all Microsoft Windows®-based operating systems, including “Vista”)

Install to hard drive. Run (open or execute) GSL-QPSEP to install QP-SEP (Cor-Sar and Keo-Sar) programs. Accept all defaults. Program will install two icons on your desktop. Click on the desktop icon to launch desired program. Your screen may go blank for a few seconds while program loads (this is normal). Once Title screen loads, press any key to exit Title screen and enter input screen. Press [Alt]+Q at any time thereafter to Exit program. Repeat the process to install SIMPLE Illustrator (GSL-SIMPLE). A third icon will be created.

QP-SEP Illustrator™

Designed to be used for: Designing retirement plans and allocating contributions under SEPs, SARSEPs, profit sharing, and money purchase pension plans for corporations, partnerships, and self-employed individuals.

Key features: Automatically calculates net earned income, self-employment tax, integration spreads, actual deferral percentage (ADP), top-heaviness, and limitations on contributions and their deductibility. Ineligible owner and guaranteed payment partner situations can also be handled. Other factors, such as outside W-2 income and self-employment gains and losses, are also taken into account (if entered). Top-heaviness is based on document type entered, e.g., model or prototype. Client illustrations can be printed, saved, and recalled.

Starting the program: To operate program or to view the instructions after installation, click the Start button, select Programs, open (click on) the GSL-QPSEP and click (open) the icon for the program you wish to run (COR-SAR for corporations, or KEO-SAR for unincorporated entities) or to view or print the instructions and other information charts. The program can also be started directly by clicking the yellow and red "COR-SAR" or "KEO-SAR" icon on your desktop.

SIMPLE Illustrator®

Designed to be used for: Calculating, allocating, and illustrating contributions under SIMPLE IRA and 401(k) SIMPLE plans.

Key features: Maximum contributions -- salary reduction, matching, and nonelective -- are automatically determined, applied, and illustrated on two or more pages. Each illustration contains either two or three side-by-side comparisons from which an employer can choose. Deductible limits and limitations on annual additions under Internal Revenue Code Sections 404, 408, and 415 are automatically taken into account when applicable. Salary reduction amounts can be maximized for each employee, be entered as a dollar amount, or as a percentage of each participant's compensation. Beyond entering the data, there isn't really much else to do. The program is highly functional in doing pretty much everything that has to be done. In the case of a partnership or sole-proprietorship, the nonowner contribution expense is automatically allocated to the owners, but may also be manually entered (provided the percentages total 100 percent).

Starting the program: To operate program or to view the instructions after installation, click the Start button, select Programs, open (click on) the GSL-SIMPLE and click on the icon for the program you wish to run ("SIMPLE Illustrator") or to view or print the instructions and other information charts. The program can also be started directly by clicking the yellow and red "SIMPLE" icon on your desktop.

If you mention "BenefitsLink" you will be treated as an existing user for update purposes.

Call Gary Lesser of GSL Galactic Consulting at (317) 254-0385 for user support, renewals and telephone tutorial. E-mail: qpsep@aol.com Internet: http://www.GaryLesser.com.

ACCEPT ALL DEFAULTS WHEN INSTALLING. THE PROGRAM CAN BE EASILY UNINSTALLED.

GSL_QPSEP.ZIP

GSL_SIMP.ZIP

Non working spouse qualifies for max spousal IRA Can the $ go in an existing rollover IRA from a previous qualified plan?

If a plan terminates in 2006 or 2007 and the payouts are in 2008, does the plan have to pay the lump sum greater of Gatt factors or PPA factors or just Gatt Factors or just PPA factors?

I have a client who failed their nondiscrimination deferral percentage test in their SARSEP for 2006 plan year. Do they have to refund the excess or can they make a QNEC to get the NHCE's percentage high enough they can pass? Any help would be greatly appreciated!!

Does a non-profit corporation that sponsors a DB plan have a 404 limit ? I'm thinking not, in which case couldn't they fund say 1 million dollars for a Key employee plus 1 NHCE where otherwise they would be restricted to less if a for-profit entity ?. The normal 415 limits would apply, so I guess they essentially are just advance funding the plan. Nothing in PPA 2006 changes this to my knowledge, assuming I'm correct in the first place. Any thoughts on this ?

A client is terminating a defined benefit plan that has lump sum distributions as an optional form of benefit. If participants are offered an immediate lump sum upon termination, does the plan also need to buy an annuity contract that gives annuitants (who didn't opt for an immediate lump sum) the option of electing a lump sum distribution upon retirement? It seems to me that participants can get the benefit of a deferred lump sum payment by taking an immediate lump sum and rolling it to an IRA, but I don't see anything in 411(d)(6) regs that specifically permits the plan to eliminate the lump sum from the annuity contract.

This is a pricey feature, and it's not always possible to find a company that will offer it.

I have a client who has two separate divisions. Each division has its own plan. Both are PSPs with 401(k) features. Elig is 21/1 with semi-annual entry for both. The plan for division A is providing a PS cont. The plan for division B is not. I have begun to test coverage and I am currently failing the ratio test for division A. I am moving on to the ABT. I am going to calc the ABPT, but I have a question. The plan for div A defines comp as while a participant. The plan for div B defines comp as the whole year. When I calc the ABPT, I assume that I use partial year comp for plan A (as defined by div A's doc) and whole year for B (as defined by div B's doc), correct?

If so, is there any way I can use partial year comp for B? (Presumably this will help my results.)

A hypothetical follow-up. If either of the plans were to define comp differently for each component of the plan, I would have my choice as to which to use for the ABPT, correct? Provided it meets 414(s). (I would think this is a no brainer. I would want to use the partial year for a better result.)

Thanks in advance.

Can a plan sponsor of a safe harbor plan decide to change the discretionary match formula midyear and still satisfy the safe harbor requirements? From reading the regs, it seems like this is permitted, but I'm having trouble rationalizing this. Most plans that I have seen make the "discretionary" match with each payroll, and the participants know ahead of time what the match formula is from enrollment meetings or highlight sheets of some sort. How does this differ from the concept of a fixed match, which you cannot amend midyear? How are other practicioners dealing with this? Do you allow sponsors to make this change midyear? If not, what authority are you reliant on to disallow the requested amendment?

Thanks for the help!

An independent contractor contributes a portion of his SE income to a SEP IRA.

The independent contractor also is participating in the company's MPPP.

Any thoughts for correction?

I am looking at a DB plan for a not-for-profit organization that has/had an individually designed plan with an age 70 NRA. Benefit Commencement Date was defined as the latest of (1) reaching age 65, (2) 10 YOP, (3) terminating employment. So, if you quit at age 65 you could get your benefit but the document clearly says that it would be actuarially reduced from 70 to 65. Tha plan has a favorable determination letter dated in 1995. I didn't think any qualified plan could have a NRA greater than 65 & 5 YOP. How is this possible?

The plan was subsequently restated for GUST and put on a prototype but the age 70 NRA remained.

Other than the special ability to increase the NRA under notice 2007-69, could a single participant-owner DB ever amend the plan to have a higher NRA without violating 411(d)(6)? He is already 100% vested and his accrued benefit would be properly adjusted.

It appears that simply postponing the ability to have an in-service distribution from the initial NRA to the higher NRA would violate 411(d)(6) and he couldnt do it. Is it somehow possible to preserve the ability to have an in-service distribution at the earlier NRA?

Hypothetically, what if the plan did not allow for in-service distributions at NRA? Then could it be done without it being considered a cut back?

2 questions about this, please

Question #1

When does the 90 days start? I was first told that it started the day the money was deposited in the trust. Now I'm being told it's the day it's taken out of the paycheck.

Question #2

What do you have to do to loose your 90 day free look?

Part A

Let's say an employee has one withdrawal at whatever the plan states is the default amount. Then 1 week later for the next payroll that employee changes the amount coming out of his paycheck to a different amount. Does the employee still have access to the 90 day free look?

Part B

Let's say this employee hasn't made any changes to their deferral amount but has logged on to the asset holder and has changed the investment option to something other than the default. Can this employee still benefit from the 90 day free look?

Thanks

Christopher

I understand you can take money out of a Roth IRA after 5 years to use for the purchase of a 1st house without paying taxes/penalties, but I'm not sure when that 5 year period begins. IRS Publication 590 defines it as "after the 5-year period beginning with the first taxable year for which a contribution was made". However, since you are able to make a contribution up until April 15 and still report that contribution on the previous year's tax return, I need some clarification.

I opened my Roth IRA around March 2004, so I was able to report those contributions on my 2003 tax return. According to Publication 590's definition, does this mean my 5 years starts on January 1, 2003 (the "1st taxable year")? When exactly can I withdraw funds and be past the 5 year point?

I was divorced in 2001, according to the divorce papers, the ex gets 1/2 of my 401K as of the date of our separation. Now, 6 years later, I receive QDRO papers, wanting me to sign the papers stating she gets 1/2 of my 401K as of the date of our separation and any gains or losses.

Up until a couple of weeks ago, I didn't even know about QDRO, I thought she would get what the divorce decree states. Neither attorneys brought it up during the divorce.

If the QDRO would have been done at the time of the divorce, how would it have read???? with or without the gain/loss statement. Would I have had a choice in how it read then.

And what about now, do I get a choice now? Can they really make the rules now after 6 years????

My 401K has changed hands, how would they even be able to figure out the gains/losses?

Setting up a new safe-harbor 401(k) Plan effective for 2007 (2 docs and 1 eligible NHCE).

Can the Plan provide for an enhanced safe-harbor match for ADP purposes on deferrals in excess of 6% of comp - i.e., 100% on employee salary deferrals up to 7% of comp ('cause $15,500 / $225,000 = 6.89%)?

No additional matching contributions to be made.

Thanks!