I think this is a simple question, but I can't put my hands on an answer.

The ESOP allows distributions in two forms- company stock or cash. Cash is paid in 5 installments. Stock is immediately bought back with a 5-year note (it's an S-Corp ESOP).

Would the payments on the 5-year note be eligible for rollover? On it's face, it seems like it would be difficult to rollover the loan payments since the distribution happened in year 1 of loan (when the stock was actually distributed and bought back). So, is a rollover possible?

I regret to inform you that Brett Kates, age 51, a frequent contributor to this message board as B2Kates. and someone I knew for 20 years, died Wednesday, August 8. Brett was an accomplished lawyer, practising in the areas of employee benefits, primarily, but also estate planning and asset protection. He was an author of law-oriented books, and for a period of years in the 90s he spoke to accountants and other professional audiences throughout the USA on Form 5500 reporting and other plan administration issues. Brett also had plenty of non-professional interests, most notably his beloved Philadelphia Eagles, to whom (which?) he was devoted in the bad years as well as the good years.

Unfortunately, Brett suffered from serious health problems starting as a very young man. While he had successful heart transplant surgery a couple of years ago, he had his ups and downs since then. For the months preceding his passing he was working and enjoying life with his family while waiting for a kidney transplant opportunity. Nevertheless, Brett and his wife and children and extended family fought through his travails with courage and strength, which was and will always be an inspiration to his wide network of friends.

Can a c-corporation with only one employee (the owner) establish a flexible spending account or will the plan automatically violate the concentration test? Is there an exception when there are no non-key or nhces?

Plan covers union members, whose benefits are determined pursuant to collective-bargaining agreements. A Joint Venture between 2 organizations is the plan sponsor and plan administrator. The three trustees are the Manager of the Joint Venture, one employee rep, and one union rep. A short amendment is needed prior to terminating the plan. Who can sign the adoption resolution?

BTW, the document is a non-standardized proto which was approved by the union's attorney prior to adoption.

Thanks,

Monica

I have the 4th Edition, and am wondering what's new in the 5th Edition (i.e., whether it's worth the investment to update). If I buy, will I have to pay for a supplement when the 457f regs come out and are analyzed, or will that be provided no-charge to the 5th Ed purchasers? I wonder if maybe Gary Lesser and Peter Gulia could enlighten me before I make the decision to buy or not to buy the 5th Edition.

If the employer pays the premiums for the following benefits: Life, AD & D, Long Term Disability, and a cafeteria plan does NOT exist, would a Form 5500 with related Schedule A information have to be filed if the benefits have over 100 participants?

If filing is required, and a cafeteria plan document does not exist, what plan number do you put on Form 5500?

I'm getting confused about filing a Form 5500 and Schedule A information for benefits in a cafeteria plan (when there are more than 100 participants and/or a Trust has been established) as opposed to filing for welfare benefits plans not covered under a cafeteria plan.

Do we need to file if our welfare benefit plans have more than 100 participants and the benefits are not under a cafeteria plan?

Can someone please clarify this for me?

Thank You

I know qualified plans can no longer use class-year vesting, but does anyone know of any problems with this in a 457(f) plan?

Maybe I'm wrong but it looks like one of those "can't find anything that prohibits this" kind of things . . . . . A 100% business owner employs, among others, his sister. Since she is not an officer nor an HCE, could the business set up a new comparability-style profit sharing plan where the sister can be isolated by herself in an allocation group (via her compensation level) and get 100% of the contribution (as long as it doesn't exceed $45K)? The owner, along with everyone else, would get nothing and he's OK with that since he's worked out a cash deal with his sister outside of the plan.

with respect to a public employer that has a reservation of rights clause relating to welfare benefits, do the state and federal constitutions' prohibiton on impairment of contracts play a role?

caselaw searches return nothing.

I'm trying to remember what the new regulations for Top Heavy Testing are. I have an owner who is taking a distribution but he is retaining ownership in the company. I say that we need to consider this distribution still for 5 years, my boss says no just 1. So I need to ask which is correct or are neither correct?

Thanks for the help.

It is my understanding that a sole proprietor can continue making contributions to a SEP arrangement after age 70.5 even though minimum distributions are required.

I am unable to find anything regarding contributions to Keogh (PS) plans after age 70.5. Can the owner of a solo practice continue making Keogh contributions after he reaches 70.5, until he retires, say, at age 75?

My best guess is No, but I can't back that up with any authority/citations.

I thought I would start with this discussion group since many who post here are involved with small company plans such as seps, simples, etc.

Thanks!

Say a client sponsors a VEBA plan and decides that they want to fund some of the benefits with life insurance.

For one of the participants they want to purchase a poplicy with a face amount of say $1 million.

The participant already has life insurance with a face of $1 million.

Could this policy become part of the plan where the plan sponsor pays future premiums and (as prescribed under IRC 419) only the calculated portion of the premium is the deduction, where the calculated portion includes the amount of premium for one year's of life insurance coverage and for pre-funding the other post retirement medical benefits to be provided by the life insurance cash value at retirement?

This being considered as an alternative to implementing an additional policy.

Thanks.

I recently inherited a roth ira from my father. It is currently set up at the broker where he did business as

My name beneficiary roth ira of my father's name

I believe this is the correct way it should be, and I did specifically fill out an inherited beneficiary roth ira with the broker when the account was established. Now, I want to transfer some of the inherited beneficiary roth ira to a different broker. (Actually, 2 different brokers, so that I will eventually have the original account and two additional inherited beneficiary roth ira accounts.) The question is, when I filled out the forms with one of the new brokerage houses, they only had a choice of a roth ira. Nothing specifically states that it is to be an inherited beneficiary roth ira. I suspect this brokerage house is simply not set up to handle this kind of account. I have not yet tried to actually transfer any assets into the new account, because I think the account they are setting up is not going to be the needed inherited beneficiary roth ira account. I noticed, for example, that the original application stated things like who was the original holder, what was his social security number, death certificate, and how I plan to take distributions (in 5 years or over my life time). The new application did not mention any thing about those things, so I suspect I may not be able to deal with them. Is this true? Or, can it just be a traditional roth ira as long as the entitle it "my name beneficiary roth ira of my father's name"?

The CEO (the CEO is not an owner) of a manufacturing firm (Company A) decides to move the plan to a new broker and TPA (Company B). The equity owner of Company A is not involved with the day to day management of the Company A, nor is he a plan trustee or administrator nor is involved in the decision to move the plan. After doing some research it is found that the owner of Company A has an investment in a venture fund (Company C)that has invested in the TPA firm (Company B). This investment is with Company C and the investor has no control over what the venture capital (Company C) can invest in or any managment control over any of the companies that Company C invests the venture capital in. Would this be consider a Prohibited Transaction or Arms Length Transaction? Is Company B considered a party in interest?

I am eager to hear your thoughts around this question.

Working on a takeover case and couldn't figure out which officer at the company had been signing the 5500 for the last 3 years......turns out it was the former TPA! Apparently, the practice at that firm was to have the client sign a POA (Form 2848) at the time the Annual Request letter goes out. I've never seen that practice before and just wondering if this creates a huge potential liability for the TPA. Anyone ever seen this before?

We have a 401k Plan that previously had no HCE contributions, though the document specified prior-year testing. The client would like to restate the plan to Safe-Harbor status (using the non-elective contribution) for this year so the 2 owners can max out their 401k contributions for 2007. Can this restatement be done still for this year? Would the effective date be 1/1/07 or 10/1/07? When does the notice need to be distributed to participants by? Having trouble locating timing requirements for notice... all info we have found has addressed plans amended with "current-year" testing, not prior-year - does this really matter since no testing was ever required at all?

When SIMPLE IRA assets are invested in an investment that has a surrender charge (an early withdrawal penalty), upon withdrawal the surrender charges may or may not be deducted based on the type of SIMPLE plan:

 Surrender charges would be applicable if the SIMPLE plan was a Form 5304-SIMPLE (non-DFI SIMPLE – a plan in which each employee designates the financial institution for which new contributions are directed to).

 Surrender charges would not be applicable if the SIMPLE plan was a Form 5305-SIMPLE (DFI SIMPLE – a plan in which the employer designates the financial institution for which new contributions are directed to).

What if the SIMPLE plan changes from a 5304 to a 5305?

 A Form 5304-SIMPLE plan is established by an employer.

 Bob, an employee, directs a total of $5,000 to the “High Cost Trustee. Inc.” (a designated financial institution chosen by Bob).

 Bob invests in the “High Cost Fund” which is subject to a 7% surrender charge if funds are withdrawn in the first 3 years.

 A year later the employer decides to change to a Form 5305-SIMPLE plan and the employer selects the “High Cost Trustee. Inc.” as the designated financial institution.

 An additional $5,000 in SIMPLE contributions are directed to the same account (Bob’s SIMPLE account at “High Cost Trustee. Inc.” invested in the “High Cost Fund”).

1) Bob decides to transfer his entire SIMPLE IRA to another SIMPLE IRA at a new financial institution. Is Bob subject to any surrender charges (or just surrender charges on the portion that was invested when the plan was a 5304-SIMPLE) and who keeps track of each contribution – the trustee?

What if the SIMPLE plan changes from a 5305 to a 5304?

 A Form 5305-SIMPLE plan is established by an employer.

 Bob, an employee, directs a total of $5,000 to the “High Cost Trustee. Inc.” (a designated financial institution chosen by the employer)

 Bob invests in the “High Cost Fund” which is subject to a 7% surrender charge if funds are withdrawn in the first 3 years.

 A year later the employer decides to change to a Form 5304-SIMPLE plan and Bob tells his employer he to keep sending the new contributions to the “High Cost Trustee. Inc.” as the designated financial institution.

 An additional $5,000 in SIMPLE contributions are directed to the same account (Bob’s SIMPLE account at “High Cost Trustee. Inc.” invested in the “High Cost Fund”).

2) Bob decides to transfer his entire SIMPLE IRA to another SIMPLE IRA as a new financial institution. Is Bob subject to surrender charges on the entire account (or just surrender charges on the portion that was invested when the plan was a 5304-SIMPLE) and who keeps track of each contribution – the trustee?

I know that a SIMPLE(k) can be amended to revoke the SIMPLE election, but I'm having trouble finding any kind of citation to this effect. If anyone can point me in the right direction, I'd appreciate it.

Thanks!

Northwestern Mutual has been removed from the employer's approved list of product vendors.

Does this constitute under the Regs a plan termination with Northwestern Mutual so that an eligible rollover distribution may be made by the employer? I believe that just the removal from the approved list is not enough under the regs. I am of the opinion that the employer must first adopt a written 403b plan and list NW as one of the product providers and then formally terminate/remove NW from the Plan Document. What say you?

Joel

I am unable to find any cite regarding the calculation of the 415 immediate annuity value at attained age under the following scenario.

Plan has AE which has different pre and post retirement interest rates. No early retirement.

Assuming a normal retirement age of 65 and a participant 55. The maximum lump sum payable is based on 5.5% interest and GAR 94. However, what is the benefit at 55? Is it ratioed down from 62 to 55 using pre or post interest rates?

Thanks for any and all responses.