Does anyone have a sample financial statement for an ESOP plan that also has a 401(k) provision?

Are these tracked somewhere? Can somebody give me a link please? Thanks.

Employer has 90% of their payroll considered "contracted employees" NOT Independent Contractors since they are on the payroll.

Can they establish a 401k Safe Harbor Pla, where the only employees eligible are all the Administrative and Internal Operations employees, can they exclude "contracted employees" eventhough they are on the company payroll?

Do I qualify for NUA treatment from my 401k?

Here is my situation:

My client retired in 2003 at age 55 and was in four plans at that time. She took a lump sum distribution from the retirement plan and rolled it over to an IRA. She elected a deferred distribution from the severance plan and the supplemental retirement plan. She retained her 401k. She has taken partial distributions and dividend distributions from her 401k in the past. She will not take any partials in the future. She will turn age 59.5 in late 2007. Immediately after that (early in 2008), she wants to take a lump-sum distribution from her 401k, take the company stock in-kind, and claim NUA. Will she qualify?

Will her past partial distributions disallow her from claiming NUA even though she will do the lump-sum after turning 59.5? Will her previous participation in “other plans” disallow her from claiming NUA from her 401k?

Thanks,

401(k)/404© plan SPD contains a listing of investment funds and it looks out of place to me for some reason. Is it advisable to list the available funds as long as the SPD notes that the funds are subject to change w/notice, or should just general information about specifying/changing investments be included.

This does not appear to be an attempt at a 404© notice. Is it ok to try and use the SPD to satisfy the 404© notice disclosure?

We have a client with a strange provision in its plan that credits participants with an extra year of service for each five years of actual service they complete. Is this a protected benefit under Code Section 411?

Technically, the "extra year" doesn't accrue until the participant has completed each 5 year segment, but from a practical standpoint it seems pretty harsh to yank this benefit from someone with 4 years and 6 months of service. Any thoughts?

We have a client who consults with troubled suppliers to automobile manufacturers. Our client has been asked by an auto manufacturer to acquire the assets of one the manufacturer's troubled suppliers in order to keep it operating until a suitable business purchaser is located. Our client will continue operating the troubled supplier for a consulting fee, as it had been doing for some time as unrelated companies.

Our client wants to avoid including the newly acquired auto supplier in it coverage testing. The auto supplier appears to meet all the requirements of a QSLOB, with one possible exception: the separate management group requirement. Our client will not only be acting as the consulting firm for this troubled auto supplier, as it has been doing, but managing the company until it can be sold. While the auto supplier have its own separate management team, it will be taking direction from our client.

Under these facts, does our client meet the separate management team test?

An employer wants to set up a shared leave program - where an employee can donate some of their vacation time to a pool so others (who are out of vacation time) can pull from the pool.

For example, employee A has 100 hours of vacation. He donates 16 hours to the pool. Employee B has no vacation and becomes ill. They take 16 hours from the pool and are able to take 16 hours of paid time off.

The employer does NOT want employee B to be able to defer from this 16 hours of pay they received from employee A. Can they exclude this pay from their definition of compensation in their 401k plan?

A 401k plan fails testing and two owners take a corrective distribution.

The TPA has instructed these two owners they must re-distribute these corrective distributions amongst all other employees.

How is it that the owners take salary deferral and give these monies to eveyone else as an employer contribution?

I have a small plan (<20 participants) with a funding ratio of less than 5%. Due to their size AFC's never applied and they had a large credit balance so they never had to make a contribution. Benefit accruals were frozen years ago (pre 1980). Don't ask me why they still have the plan 'cause I don't know - they just don't want to terminate it.

The plan also pay's lump sums, so basically, they make a contribution whenever they need to pay someone. I was thinking PPA would put an end to that since lump sums would be restricted if funding ratio was less than 60%, BUT, it seems they are exempt from that rule since the plan was frozen on 9/1/2005 (ERISA 206(g)(5)©(ii). So, I think they can keep doing the "same old same old" and continue to pay lump sums.

Their required contributions will go up post PPA, and they can't use their credit balance anymore (it is gone anyway), but they can continue to pay lump sums even though their funding ratio is basically 0%.

Agree?

We have an employee who worked for one employer from Jan 1, 2007 until May 31, 2007 and during that time he deferred $7,100 into a 403(b) plan and the plan had a limit of $15,500 for the year. He stopped working for this employer 5/31/07.

July 5, 2007 he started with a new employer and he is eligible to participate in the new employer's SIMPLE IRA with a $10,500 limit for 2007. Since he already deferred $7,100 into the 403(b), what is his limit for the SIMPLE IRA for the remainder of 2007?

Thank you for any help you can provide.

i have a doctor group client. one of the dr. participants (employee non owner) wants to remain an employee but receive some income as an independent contractor (from the same company). the dr. wants to set up another plan to deal with that income. would the IRS frown upon this type of duel relationship ie. employee/indpendent contractor?

We have a participant who is requesting reimbursement from her health fsa for a bicycle.

She has already been reimbursed for a recumbent bicycle - the medical necessity statement from her doctor has already been supplied for this item.

We are questioning the reimbursement of the second request - possibly not a medical necessity for for recreational purposes. Any thoughts???

Would welcome thoughts on the following.

Company has a SERP plan for its directors. SERP benefits are nonelective, employer-provided funds which provide directors a specified annual payment amount for X number of years (up to maximum of 10) following retirement. The SERP provides for payout upon the later of (1) age 72, and (2) separation from service. The SERP benefits are subject to a vesting schedule which ties into the number of years of payment. The directors all have extensive service on the board such that they are all vested in the SERP benefits and all are entitled to the set annual payment amounts for the full 10 year period.

In the event of a change in control, all SERP benefits receive accelerated vesting if not already vested and will be paid to the directors in an accelerated lump sum payment equal to the present value of their benefit if it were to have been paid out over the 10 year period. Company is contemplating an event which would constitute a change in control under the SERP and thus result in accelerated distribution of SERP benefits.

If change in control occurs, half of directors will leave board and thus do not really have a problem with receiving their SERP benefits on an accelerated basis. (Some are actually over age 72 and thus would be entitled to distribution under normal plan provisions upon separation from service.) The other half of the directors, however, will continue on Board of the merged company. Some of them do not want to have their payments accelerated. Parties to the merger don't want their payments accelerated either since it would be a cash drain on the company.

I am not sure there is an easy way to delay those payments under 409A or traditional constructive receipt rules. I suppose they might try changing the definition of a CIC so as not to provide for immediate payout on that trigger but that would presumably carry over to the retiring directors as well--some of whom are interested in getting accelerated payouts. The subsequent deferral rules under 409A wouldn't seem to work here because there is no way the election to put off the deferral could be made 12 months in advance. I read the special change in control exception provided in Treas. Reg. § 1.409A-3(i)(5)(iv)(B) to apply to only nonvested compensation / amounts such that an election to avoid change in control acceleration would not apply where benefits are already vested and not subject to a substantial risk of forfeiture. Also, from a general constructive receipt standpoint, it seems the continuing directors are basically on the verge of receiving the payments (although not final agreement has been reached) and would be turning their backs on the SERP benefits if they delayed receipt now.

Am I missing an easy argument or method for basically waiving accelerated distribution of the vested SERP benefits that doesn't raise significant risks. Thanks.

We had denied a claim for teeth bleaching for the CFO of a good client. Now he is saying that this tooth is part of a root canal. Every few years the dentist takes off the cap, rebleaches the tooth and puts the cap back on. Does anyone consider this to be different from other types of teeth bleaching?

Can the terms of a participant loan to buy a residence be extended to longer than 5 years if the home that is being purchased is outside of the US? Proposed property purchase is in China. US citizen currently living overseas.

edited to add location and citizenship.

Has anyone ever received a DL where DB benefits were offset by a profit sharing plan that has tiered language?

In this case, the employer originally had the intent of just having a profit sharing plan but then adopted a floor offset DB plan later that year. The PSP was never amended to have comp to comp allocations. However, in operation, the plan always provided uniform allocations each year.

It is well known that the 3-year statute of limitations starts when form 5500 or schedule P is files, and never starts when it is not filed.

However, what if there is no requirement to file as assets are <$100k?

When is the start date, what is the statute of limitations, if any?

I can't believe it would never start, as then it would be extremely (unnecessarily) risky to follow the advise not to file if assets <$100k?

Thanks for your insights.

Thre Questions:

Q1: If a participant wants more than 20% withheld from a eligible rollover distrbution, or more than 10% from an ineligible rollover distribution, are people getting a signed WP-4? Our forms have always provided for the regular defaults, but we often get participants who want to do the right thing (i.e., withhold appropriately), and most of them end up not following through with the WP-4 and just go with the defaults.

Q2: Can any provide me any sort of logic for why the government wants to make it so hard for participants to have their taxes adequately paid via withholding???

Q3: I've seen many providers forms allow participants to request more than the minimum withholding without requiring the WP-4. Have others seen this too?

The more I think about it, I can't help but wonder if this is just not enforced. What IRS agent would care that a participant had MORE than the minimum withholding withheld? I mean, the government gets their money quicker and the risk that they'll never get it dimishes?

What is the story? Any thoughts or, even better, knowledge on the subject?

What happens if a distribution is made without spousal consent when spousal consent is required? The plan participant took a distribution from his 457 plan without getting spousal consent. The plan participant has since passed away. Is there any recourse for the surviving spouse?