A couple of points I am going to present and would like either verification or difference of opinion if any exist. I'll try to keep things straight forward.

Background

Law firm has a 401k only plan for associate attorneys and a

401k, 401m and profit sharing plan for the partners and rank and file employees. Only NHCEs receive a 401m match.

It is intended that the partners' plan passes without aggregation.

We'll assume that the partners plan by itself is top heavy.

1. Regarding the ADP test, my understanding is that we include all non excludable employees in the company for the coverage ratio test, but only include the non excludable employees in the partners plan when performing the ADP test?

2. The partners plan passed the rate group non discrimination testing by means of the average benefit test. While the ABT is based on rates for all non excludable employees in order to test for the average benefit percentage portion of the test, it is still not deemed a required aggregation for purposes of providing top heavy allocations for the associates, thus associates would not be required to receive a TH allocation?

3. And finally, while the partners plan is being tested on a cross tested basis, the assoicates plan should not be required to receive a gateway minimum? The ABT uses cross testing for the associates plan as well of course.

4. To make a long story short, meeting coverage and/or non discrimination by means of the ABT does not warrant required aggregation as far as I can see? Otherwise it appears that the partners plan is being tested as a separate and distinct plan.

Thank you.

Looking for comments on pros and cons of commercial software available for cash balance administration and testing. Looking for user friendly menu driven system. The system would not have to handle non-CB plans. Thanks for any help.

The preamble and the regulatios are clear that separation payments made upon an involuntary termination of employment (or a voluntarytermination that is deemed to be involuntary) and qualify for the 2 year/200% of compensation exception are not subject to the 6-month delay for specified employees. What about separation payments that exceed the 200% cap on compensation but are made in a lump sum on the date of an executive's involuntary termination (or qualifying voluntary termination). If I am reading the regulations correctly, that payment is subject to a substantial risk of forfeiture and vesting occurs on the date of the involuntary termination. Thus, this payment qualifies for the short-term deferral exception and can be made without the 6-month delay. Am I reading this right? I have read several commentaries. Very few mention this (Deloitte's does) and several say that the 6-month delay is not available if a severance payment exceeds the 200% cap even if it imade within the 2 and 1/2 month extension. Thoughts are appreciated.

Along the same lines, please confirm that the 6-month extension applies to distributions to specified employees who terminate employment voluntarily when the voluntary termination is not deemed to be an involuntary termination. Plan says that employee can elect to terminate his employment anytime within one year beginning on the happening of an event. Payments are made in a lump sum on the date of termination.

thanks.

Participant has 2 loans outstanding. Plan only allows for 2 loans at any one time.

Loan 1 has 1 year remaining

Loan 2 has 18 year remaining on loan whose purpose was to buy property and build a home.

Participant is at final stages of refinancing the original bank loan from a building loan to a home loan. However, builder is now requiring payment of amount owed to him by end of month and refinancing won't be completed in time. If participant fails to pay the builder then she'll get a credit ding which will cause her refinancing to fall apart (evidently her low rate is contingent on no late payments on her credit report). Participant inquired about refinancing loan #2 to add the 6k that she still owes. Account balance is sufficient to add the additional 6k.

Can I refinance the 401k loan over the remaining loan period to pay this obligation on the original home?

Has the IRS changed their mailing address for Form 5310 filings?

The instructions to the form say to use P. O. Box 192, Covington, KY 41012-0192.

I use the United States Postal Service website for my mailing and mailing labels. When I enter the above address it keeps telling me the address is invalid. Anybody have a different address?

If I have a participant that died in 2001 and the nonspousal beneficiary has been taking the RMD under the life expectancy rule, with the passage of PPA, can that beneficiary rollover the balance in the plan (minus the 2007 RMD) to an inherited IRA? Thanks!

Judge Shabaz, WD Wisconsin, has dismissed the case brought against Deere & Co and Fidelity.

Here is the Memorandum and Order.

Hecker_v_Deere.pdf

I currently work for a publicly traded company who funds their employer 401(k) contribution with a 50% match in company stock. My company is currently evaluating the feasibility of enrolling in an HR outsourcing service that will include the transfer of our existing 401(k) to the plan provided by the outsourced service.

This new organization who will no longer allow the match to be funded via company stock and has recommended a plan where they will accept the stock match, sell it for a fee of about .05%, and then transfer the proceeds into each respect employee's accounts.

Does this sound like a very bad idea to anyone else?

Is there someone out there that could help me to understand the goods and the bads of this type of arrangement before we jump into a potentially bad situation????

HELP!

Company is owed by two peole; they decide to seperate and one of them is going to keep the plan. They did this as of 3/31/07 and changed the company name to reflect this. Four of the eleven plan participants were let go as a result (including the one owner). The remaining owner and employees are keeping the plan.

So, I have to do an amendment to change the company name, plan name, and remove one of the trustees. Doesn't a particial termination require an amendment, or do we just generate the distribution packets when the time comes? It's been a long time shince I have done a partial termination, so I apreciate the insight...

I am wondering what would be a reasonable rate to charge for consultancy fees

Does it matter the job and level of complexity? or should I just charge one flat fee?

I plan to charge per hour for projects that take five hours or less, and per-day for projects that take more than five hours.

My consultation services on on IRAs and DC plans, and usually involve providing techincal assistance and training

Guidance appreciated

Is anyone using the web based paperless loan feature?

I am interested in finding out how the promissory note is handled. Is it a part of the check? Is this really paperless or simply less paper?

To qualify for this credit, the employer must not have had within the last three years another qualified plan covering similiar ee's. I've read some commentary that "qualifed plan" for these purposes means any plan such as those that aren't "qualified" under ERISA like SEP's.

What exactly does "qualified" mean here? I have a new 401k plan, effectively that replaced the old SARSEP. Same ee's covered. Can this client take the Form 8881 credit or does the SARSEP knock them out?

Thanks for any help.

the participant had an outstanding loan for 10k and he dies. he has 100K in his account. who do you issue the the 1099 to? due to the default, i think you issue a 1099 to the deceased participant for 10K and the beneficiaries (if they take a distribution) for 90K... anyone know whether this is correct.

IRA Owner passed away at 54 and the Marital Trust is the beneficiary. The surviving spouse is 67 and due all income from the IRA through the trust. Our issues are as follows:

Spouse is not required to take distributions until decedent’s 70 1/2 year, but income is required from the IRA. If minimums are taken, the amount is based on the Spouse’s age and not the decedents, correct?

Also, if distributions are taken (before decedent’s 70 ½ year) do they have to be considered required minimums, Or can the Spouse (trust) take all of the income generated as a death distribution without worry of a minimum amount until that 70 ½ year? If distribution is taken before decedent would have turned 59 1/2, is there a penalty?

I can see an accountant in my future, but I was just wondering if anyone had come across this and had any ideas.

Is a judgment requiring that a trustee's account balance be forfeited or setoff (the trustee's account balance was forfeited to the plan's forfeiture account and redistributed to the other participants) a taxable event that is required to be reported on Form 1099-R?

I haven't been able to locate any authority indicating that it should be reported as taxable event but the DOL seems to think that it is.

I have the Schedule K-1 for both partners whose firm sponsors a 401k. There are no employer contributions for the 2006 plan year, just deferrals. Is the compensation for the partners the figure shown on Line 14A of the K-1, or do I need to subtract the 179 deduction (line 12) from that figure? Or is there another amount that should be used?

Thanks

I have to amend a plan because it was written to provide for monthly loan repayments, but the client now tells us that their payroll cycle is weekly and they (wisely) want to make all loans be paid through payroll deduction, one paycheck = one repayment.

How "material" is this change? The plan is a Datair prototype, where the Loan Procedure document is referenced to be part of the master document. Not that the employer is trying to hide anything here (that I know of), but if they can avoid confusing the participants with an additional notice, that would be nice. Is this a small enough issue that it doesn't warrant notification? Thanks.

We have an employee who died this year and was entitled to a severance payment before his death. We are paying it to his estate. I looked at the instructions to Form W-2, which indicated that we (i) submit a final W-2, listing the severance payment in the social security and medicare boxes (but NOT as income), and (ii) give the estate a Form 1099, which will list the amount of the severance payment as income.

Am I understanding it correctly that the W-2 takes care of the FICA taxes and the Form 1099 makes the estate responsible for paying income tax?

Does the company still have to withhold federal income taxes on the amount of the severance payment?

thanks in advance for anyone's insights.

A company sponsors several types of welfare benefit plans (health, LTD, life & ADD, group travel and accident and a cafeteria plan). They have typically been under the 100 participant limit for filing 5500s, but some of the plans did go over 100 participants during some years, then back down again. I can see that determining which plans went over the 100 mark, in which years, is going to be quite a hodge-podge.

I was told by another practitioner that there is much less concern at the EBSA about 5500 filings for welfare plans than qualified plans. She suggested that we not try to go back and figure out which plans should have filed for which years, but start being vigilant now, on a going forward basis.

I was wondering if some of you have had a similar experience and how you handled it.

3H is plan feature for "member of a controlled group." Do people agree that if ALL members of the controlled group and/or affilliated service are covered by the Plan, that 3H should NOT be selected? Being a "member" of a group implies that there are other members as well.