PPA says that as of 1/1/07 we must make a reasonable attempt to comply with the new rules. The safe harbor for the "description of the consequences" statement must include a description of plan investment options available and fees applicable if the distribution is deferred.

How are people addressing this in advance of the final regs on this topic?

We need a copy of a 5558 for a new client which, presumably, was filed by client's prior TPA. Repeated attempts to reach Ogden, UT service center by phone have been unsuccessful. Any suggestions as to how to obtain this form or to get through to this IRS faciltiy? Thanks.

Is it possible to forfeit a non-vested account balance when the participant terminates rather than waiting until a distribution is requested or until a break in service occcurs. The document states "immediately upon distribution". Immediately upon termination is not an option. Is it even allowed?

We have a question from a participant regarding installation of a running board for a SUV (due to other medical issues, SUV was suggested by doctor).

Husband has broken two bones above ankle and doctor has recommended a running board to make it easier for him to get into vehicle.

The cost of the running board and installation is approximately $525 - should this be a permiited reimbursable expense under a health fsa?

We have already obtained a note of medical necessity from the doctor and the blue book price of the SUV ($32,000).

Any thoughts are appreciated - thanks.

A financial institution is currently the trustee of a small 401(k) plan. They are charging ridiculous admin/trustee fees to the plan administrator. What process should the plan admin take to remove them as trustee? A letter and board resolution?

What are the rehired rules if you are already considered a participant.

Eligible participant terminates employment and gets rehired 3 years later, don't they become eligible immediately upon rehire?

What if the document is silent on this issue and there is nothing regarding rehires?

A participant died in 2005 at which time he was 52 years old. His designated beneficiary is his brother.

The plan document follows the 2002 RMD Regulations which state that "distributions to the designated beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died" (ie - the default is the life expectancy rule). Using the life expectancy rule, payments must have started by December 31, 2006. However, no payments have yet been made. What are the options:

Option #1) Double payment for 2007 - Consider this to be a failure to timely pay a minimum distribution required under 401(a)(9) - - Appendix A, .06 of Rev Proc 2006-27 - - and distribute both the 2006 and the 2007 life expectancy payment in 2007. The 50% excise tax is going to need to be paid by the beneficiary.

Option #2) Transfer him to the 5-Year Rule - Since he did not start payments by December 31, 2006 pursuant to the life expectancy rule, and since the IRS has ruled in PLR 9812034 that it could not extend the deadline for starting distributions under the the life expectancy rule, the beneficiary must receive the entire account by December 31, 2010.

Any help is appreciated.

What if someone is in two SIMPLE IRAs of unrelated unaffiliated employer and over age 50. How does catch-up limit apply?

THanks

Are brokerage accounts legit for DB assets ? the first page of a recent monthly statement shows an individual as trustee and also has the name of the plan - is this sufficient info to know that the account is in compliance with any rules governing accounts that hold qualified plan assets ? are there any other issues that I should be wary of ??

Is a corporation which sponsors a 401(k) profit sharing plan "wholly owned" for purposes of EZ eligibility under the following facts?

1 participant (and possibly spouse) own 5% of outstanding stock

401(k) plan owns remaining 95% in rollover account(s) of the 1 participant (and possibly spouse)

I do not intend to engender with this post a discussion regarding the propriety of such an arrangement from a PT/fiduciary/exclusive benefit perspective since I know these so-called "ERSOPS" are controversial on this front. Just a simple Reporting question.

My thought is "Yes" it is wholly owned because 414(b) makes inapplicable the non-attribution rule of 1563(e)(3)© and, therfore, the stock is attributed to the participamt/bebeficiary.

Does this make sense?

Thanks for the help

I just reviewed a case wherein signifcant sums of money (salary deferrals of HCE's) were left in the plan after ADP testing for 2005 indicated a test failure. Distributions of the excess amount including earnings finally happened in December 2006 after I raised the question with the recordkeeper. When I asked the recordkeeper if the excise tax was paid or if the amounts were included in the 2006 W-2's, I got dead silence. Assuming either one of these problems remains an issue, what us the repair on this given that it's now Feb 2007. I assume that the W-2's can be adjusted but when is the tax due and is it just on the refund amount or that amount plus the earnings paid?

Former administrator erred in calculation of amount to be deducted from employees' pay due to a paydate for a 2006 payroll period falling on Jan. 2, 2007. This has shorted employees' 403(b) supplemental contributions by one full pay period. (For those electing maximum $15,000, amount short is $576.90). Current adminstrator stated nothing can be done. Is this correct?

Hello,

Our company maintained a SARSEP IRA until growth required us to replace this retirement plan with a 401k plan. A participant rolled over a portion of their SARSEP to the 401k in 2006. We are switching to a new 401k plan administrator in 2007. The participant would like to transfer the rollover amount from the 401k back to the SARSEP prior to the 401k administrator switch.

We've asked both 401k administrators (current and new) whether this is allowable and have received conflicting answers.

1) Old 401k administrator says that theoretically the SARSEP rollover amount is not subject to withdrawl limitiations and could be rolled back to the SARSEP.

2) New 401k administrator says that because the plan documents stipulate no in-service withdrawls until age 59-1/2 the SARSEP amount can't be rolled back to the SARSEP.

Can anyone provide additional details either way?

Thanks

For 2006 testing, would the 5% QNEC cap for testing be determined by multiplying 5% times the participants' compensation from plan entry date or for the full plan year? A plan has two entry dates and defines compensation as compensation from plan entry. If we look at using a flat dollar QNEC of about $200 one employee's rate based on date of participation compensation exceeds 5%, but is less than 5% based on full plan year compensation.

I know there are restrictions on sponsoring a SEP and a qualified plan. What about a 403(b)? Can you sponsor a SEP and a 403(b) that is purely a salary deferral arrangement?

Is there any restriction on a business owner over 70 1/2 making salary deferrals to his 401k plan? Like IRA contributions are not permitted after 70 1/2

DC/401(k) Plan has rule that if p dies and there is no spouse, then remaining account balance must be paid to designated beneficiary ASAP as a lump sum. The plan text does not specify for purposes of RMDs whether the 5-yr or lifetime payout rule applies b/c it is moot.

Plan wants to permit nonspouse rollovers under PPA/N 2007-7. The inherited IRA rules generally state that the RMD rules of the plan govern the recipient IRA. The RMD regs (1.401(a)(9)-3, Q&A-4) state that if a plan does not states which rule (ie, 5 yr or lifetime) applies, then lifetime is the default.

Could the plan be said to have implicitly chosen the 5-yr rule based on its ASAP lump sum requirement or does the default kick in?

Under the NYSE's listing standards (as approved by the SEC), issuers are required to obtain shareholder approval of material revisions to equity compensation plans. If a issuer wants to remove a minimum five year vesting schedule in a restricted stock plan to make no minimum vesting period required (so that "restricted" stock can be awarded that is immediately vested), is that a material revision requiring shareholder approval because the plan is now authorized to make a new form of award? Thanks.

An employee has been off work for 3 months for Workers Comp. and has not paid any of the monthly medical insurance premiums. Can we terminate the employees medical insurance?

Can anyone explain the benefit, rights and features test? When a plan would need to run this test? What follow up is required on a plan level to correct a failure of the test.