very strange but true, and I only know this because the Dodgers have a minor league team (AA) here in Jacksonville.

Currently on the roster they have a guy from China whose name is Hu. He is a very good fielding shortstop, batting over .320 this year so a good chance he will make it to the big leagues soon.

Yesterday the Dodgers signed a guy out of college whose last name is Watt.

If he is any good, then someday at a Dodger's game it is possible that you will hear

Hu's on first and Watt's on second.

good grief, shades of the old Abbot and Costello routine.

I wish to prepare the simplest possible election form for my client who does not want an immediate lump sum. The plan provides for in-service distributions at or after normal retirement date, and the participant's normal retirement age is less than 70-1/2. It seems to me that the regulations provide four choices:

1. A life annuity (including C&C and/or COLA if permitted by the plan terms)

2. An annuity certain (including C&C and/or COLA if permitted by the plan terms) for no longer than the participant's life expectancy (in whole years, based on the table in the regulations)

3. and 4. Same as 1 and 2, but as a joint & contingent annuity

My questions:

1. Is the above correct?

2. Can a participant choose to receive more than the required minimum in any year?

If the answer is yes, then the only choice to give the participant would seem to be the one which produces the lowest required minimum, as this would provide the greatest flexibility. Is this correct?

If the answer is no, then offering all four choices would seem to provide the greatest flexibility. Is this correct?

3. If the answer is yes, does choosing a larger than mimimum distribution in any given year affect the required minimum in subsequent years?

4. What, if anything, would change if normal retirement age were greater than 70-1/2 (e.g., participation began at age 68)?

Thanks in advance.

I bill some of my Plans on the basis of Participant defined as Eligible +terminated with account balance.

Does anyone know of a report which shows active Participants and account balance for version 12X?

It would be great if it counted them, but I would settle for a report with a column of names, column showing status and a 3rd column showing account value, preferably vested value.

A client is employed by a local school district, the client is having a claim problem, asked the school district for the SPD - the response was we don't have to provide them since we are a government agency - this doesn't ring true. The plan is self-funded. Can you provide some advice on this?

If you have a participant that request a hardship withdrawal and the only documentation you collect was a signed statement by the participant that states the hardship is to pay medical bills. You are later audited the auditor discovers the participant did not qualify for the hardship. What/ who is pentalized and how? Can this cause the plan to be disqualified>

We have a client that discovered that several eligible employees were improperly excluded from the plan. This discovery happened during the existing plan year, and the employer intends to make QNECs for those improperly excluded employees. The question was raised, and I'm surprised I haven't seen it before, is do they need to amend their plan to provide for corrective QNECs? There was an earlier thread that dealt with this issue in the ADP context (i.e. if the method of correction provided for a QNEC to be made, and the plan, as currently drafted, did not allow for QNECs to be made, that the plan could be amended to allow for a correction by QNEC - from the EPCRS Rev. Proc).

I'm not really sure that this is a comparable - I've never seen a 401(k) plan that contains language that says "in the event of an operational failure, the plan sponsor may make contributions to the plan to correct such failure".

I thought I'd throw it out there and see what sticks.

Much obliged.

I am trying to find the simplest answer to the maximum contribution of a one person business - incorporated, that is making north of 1,000,000 per year.

He is establishing a DB plan this year and making the maximum contribution he can make into the plan is about 149,000 to provide the max benefit at age 62.

I understand that he can also use a solo 401k and defer 15,500 + 5,000 for a catch up since he is over 50.

QUESTION 1- Can he also fund up to 6% of compensation into a profit sharing portion of the solo 401k up to 29,500 (45,000 limit minus the 15,500 deferral= 29,500).

QUESTION 2- What is the 6% number based on in this total compensation- if he made 1,000,000 but he deferred 20,500 into the solo 401k plus contributed the 149,000 into the DB would his total compensation be 1,000,000 or 979,500 or 830,500.

QUESTION 3 - Is the 6% number essentially capping out at 491,667 of income (29,500/6%) - I guess this number would be clearer if # 2 were answered.

QUESTION 4 - Finally if an individual made enough money is he allowed to max out a DB plan and max out a 401k with a profit sharing up to 50,000 since he is over 50?

I have a client who needs a new prototype.

Accudraft.com recommended by a collegue. Does anyone have any experience with them? Tech support, quality of documents, etc.

I'm drawn to them because of price, frankly.

Thanks in advance for your input!

Can the DOL impose penalties for failure to provide a notice of Special Enrollment Rights? Does anyone have any insight into what action the DOL can undertake if they come accross such a failure. It appears the IRS has authority over this HIPAA provision.

This was in the NY Times 'Puns and Anagram' Crossword Puzzle this week:

5 letter word

"Government provision that might raise pension questions"

(I find it fascinating that whoever composed the puzzle even came up with something like this)

Mom died in 2005. Brother is executor, I am third in line to act if he fails to act. He has liquidated other IRAs and rec'd checks made out to him and to mom and put these into her trust/estate account at the bank.

We have 4 IRAs remaining that do not have a beneficiary listed. Have called the funding agencies and these can pass onto the estate per their contracts. However, one lawyer says we need to do probate?

Why, if there is a will and a living trust document and these spell out what happens to all assets, can't we avoid probate costs?

The estate is less than $100,000. There are 9 children to inherit. Thoughts of what is best strategy? Had thought of doing a 'stretch' of the funds but majority of siblings want to close out everything and move on.

We are all workable with each other, so, majority rules.

For the limitation year 1/1/05 to 12/31/05, a member has an excess annual addition of $1000.00.

All of their deferrals were matched, and the plan document says to prorate the excess from deferrals and match. If the refund was done correctly, then $700 in deferrals would have been refunded and $300 in match would have been forfeited.

Instead, $1000 in deferrals were refunded to the member.

Any idea's on how to remedy this failure? Would it be acceptable to have the member return the overpayment?

We have been approached by a consultant regarding our ESOP (we are an S-Corp). We currently limit distributions to cash, but the consultant says we can amend the plan to distribute stock with a "call option" so that the company can decide when it can come up with the cash to buy the stock from the participant. I assume the stock would also require a "put" option.

Has anybody heard of this? Issues?

I have a participant in a 401k Profit Sharing Plan who went out on disabililty in March 2007. She had an outstanding loan at the time and has submitted paperwork to have her loan balance offset due to disability. She is age 47.

Two questions:

1) What is the proper tax code to use for the 2007 1099-R to be generated for the loan offset.

2) Is she subject to the 10% early withdrawal tax penalty for the loan offset.

I think she should receive a 1099-R coded as '3' and she would not be subject to the 10% penalty, but I would like to see if anyone agrees.

Mahalo!

We have a rich 401k/profit sharing plan, and a middle-of-the-road health plan. The idea has been floated to give employees the option of choosing between receiving a full match/profit share or receiving a partial match/profit share, and in exchange we the employer will pay more towards their health care coverage.

In preliminary discussions our TPA says this can be done; however they have no clients who do this right now. They can investigate further for a fee.

Before we proceed, I'd like to know if anyone has or administers such a plan. We want to be innovative, but not bleeding edge.

Thanks!

In 2006, company went to trouble to set up a cafeteria plan to deduct medical premiums on pre-tax basis. Made all proper notifications and elections but then failed to set it up on payroll system as a pre-tax deduction. Error is not found until 2nd quarter of 2007. What's the correction?

Does anyone have any suggestions for a TPA for FSA and DCAP benefits for a small school district? Thanks.

This might be a silly question, but I want to do it right. An owner is 70.5 july 10th 2007 has an account balance as of the last valuation date(9/30/06) of 2,913,757 and his wife, who is the beneficiary, her DOB is 11/2/43. It states if the participants spouse is the sole beneficiary, then you use the divisor in the joint life expectancy table, in this case 25.4, but only if that amount is larger than the amount from the Uniform table. Well the DIVISOR in the uniform table is 27.4. However, when using these divisors the RMD in the Uniform table is 106341 and the Joint Last Survivor is 114715. I am thinking the rule means the highest RMD amount not the highest DIVISOR. Also, wouldn't you use the Joint Last Survivor table unless the spousal beneficiary is more than 10 years younger than the participant?

Thanks.

I have a 401k client whose plan allows for loans and hardships. The only source of funds in the plan are salary deferrals. This client has a participant who has already taken a loan and now wants to take out the rest of his money. The participant claims he doesn't fall under the hardship rules but says it's his money so why can't he have it?

The client is considering adding the in-service distribution provision so the participant can get his money but when I told him the participant would need to continue paying back the loan, he went ballistic and said that didn't make sense.

I figured the participant made an agreement to take a loan against his account balance and just because in-service provisions are added to the plan that doesn't negate the loan agreement. Am I way off base on this? Does the participant stop making the loan payments and then get 1099'ed for the entire amount at the end of the year?

Plan is invested in a CCT that is subject to the new 94-4-1 requirements. CCT files as DFE.

What amount is reported on the Schedule H & D, FMV or Contract value??