At the next investment committee meeting, my boss would like to present a

solution that would include freezing a subisidairy's current 403(b) plan for current

enrollees and starting a 401(k) plan for new employees / enrollees;

allowing a voluntary migration from the (b) to the (k) as individually

desired. This all assumes that there are no major pitfalls along the way.

What pitfalls could we potentially encounter?

We have both DB & DC plans together, and are cross-testing to prove compliance.

The VP document for the DC plan provides a Gateway language with a 5% rate built-in.

But we need something more. When a DB is involved, the amount may go to 7.5%.

Or we may find that some employees need a higher contribution than others, possibly because

some are not covered in the DB plan.

For the participants with no DB benefits, I would like to have one gateway amount.

When the participants also have DB, I would like to use a different amount, based on the average

DB contribution rate for all NHCEs.

Does Corbel's document have this option?

Does anyone else have any suggestions?

Situation where a plan was in the process of transitioning from one carrier to another in Feb. 2006 and the employer sent the broker the 2005 PS contribution rather than to either the old or new carrier. Contribution was made by the employer before their 2005 tax filing date (3-15-06 no extensions) and was claimed as a deduction for the 2005 year. Contribution was held at the brokerage in the name of the plan.

The problem (one of them any way) is that that 2005 PS contributions still hasn't been allocated.

1. Can it be allocated for the 2006 year or does it have to be allocated for the 2007 year?

2.It would be considered an annual addition for the year allocated?

This would present another problem because there may be some employees who would have ordinarily received an allocation of the 2005 contribution if allocated by 4-14-06 (1.415-6(b)(7)(ii)). But if they terminated before 2006 (or 2007) and have no compensation for the year allocated they exceed 415. Is this correct?

Is there any way to get those employees who may have terminated employment before the year of allocation any part of that 2005 contribution? Is outside the plan the only recourse for those affected former employees.

We are terminating a DB plan. The annuity provider won't issue an annuity without the participant's signature (the provider claims that the annuity is too small). The participant won't sign. I believe you are permitted to treat unresponsive participants as missing participants for purposes of terminating a defined contribution plan. Is there a corresponding rule for DBs? I couldn't find one.

Assume a company aquires a subsidiary and the contracts with the employees of that subsidiary promise to amend the parent's plan to include service with that subsidiary prior to acquistion. Does an employee who terminates nine months later, before the amendment is actually made, become a participant in the plan (assuming their pre-acquistion service with the subsidiary would have been sufficient)? Any citations would be appreciated - Thanks!

A client wants to receive coins to meet RMD requirement.

My understanding is that a distribution in-kind like the one above is fine, as the plan allows for it.

My impression is that the amouont must be a fair and marketable value of th coins.

Additionally, it would seem like a good idea to have the coins professionally appraised, but if the trustee (who is also the plan participant) wants to determine the value it better be reasonable as this can come back to h aunt trustee in the event of a plan audit.

Are there other views or interpretations on the above situation?

Thanks.

Does anyone have a "top heavy minimums met" report that shows well...uh...that top heavy minimums have been met and how? I'd really appreciate any help!

Thanks!

Annie

Company A purchases Company B in early 2006. Company B becomes a wholly owned subsidiary of Company A. It is a stock sale. Company B adopts Company A plan and employees are given credit for prior service and allowed to participate in the Company A plan right away.

Are the employees of Company B who earned more than $95,000 in 2005 HCE's in Company A's plan for 2006? If so, can they be placed in the "otherwise excludable" group?

Sal's Book (2005 edition) addresses this issue with a caveat that future guidance could change his "reasonable" interpretation. I don't have the 2006 edition and the 2007 will not be available until March.

Two employees own 50% each of the company. One of them dies on 12/1/05. His stock is immediately purchased by the other owner. So the surviving partner owns 100% of the stock on 12/31/05. The deceased partner's son is employed by the company. Is the son an HCE in 2006?

Hi, wondering if anyone has any advice for me. I have around 120 shares of stock in Pfizer, given to me from my grandmother when I was born (I'm 27). Not a lot of money, but considering it started as only a few shares in 1979, it has gone up quite a bit without doing anything to it.

More recently I have seen the stock continually fall, where my Roth IRA that i started last year has done rather nicely. My thought right now is to sell my stock and place it all in my Roth IRA, since the stocks have not done well recently, and I have not been able to add that much to my roth, (well, because i am 27, a teacher with a stay-at-home wife, a 1.5 year old, and one more on the way!).

First off, would this be a wise decision, and secondly, what sort of penalties would I have for selling my stock?

Thank you!

A public company that provides stock options (non-qualified) to its employees shows the gain on these options on the W-2 for the year that the employee exercises the options. They have a 401k plan that has a W-2 compensation as their definition of comp. The question is does the W-2 comp exclude the option gain for terms of census reporting and testing? These are 'wages' that are not technically eligible to defer money from nor are they wages that benefits should be based off of since the dollar amount is only reported for tax purposes and is not technically tangible wages that are received by the employee.

Company A acquires the assets of Company B. Company B's plan has not been terminated, but the majority of it's employees were hired by Company A. Company A has a 90 day waiting period and wants to amend to waive eligibility for those employees being brought over. Despite this being only an asset acquisition, doesn't it still make sense to review Company B's plan to ensure that they are in full compliance?

Company A has already deferred money out of their pay and can not provide us with any of the required amendments from the Company B plan. Am I making too much out of this if no rollovers are being made at this time?

Thanks

Scenario: A Health and Welfare Fund provides for a death benefit. The Fund has been contacted by the son of a deceased participant inquiring as to whether a death benefit was paid out after his father passed away. Normally, this question would be a no brainer. In this case, the son's father passed away in 1982 and the Fund does not have any records on file to answer the son's question. What is the Fund's obligation to the son considering that nearly 25 years have passed since his father passed away?

Can a wife make contributions to her retirement plan at work and then both she and her hubby contribute to a ROTH as well? (This is assuming they fall into the income guidelines)

Assume ER (for whatever reason) has 2 money purchase pension plans covering different portions of its workforce (A & B ). ER wants to terminate A and permit participants in A to roll their accounts into B prior to termination. A covers terminated vested participants who are not covered by B. Can those vested terms roll their accounts from A into B without violating the exclusive benefit rule of 401(a) (or other rules) even though they aren't employees anymore and otherwise have no nexus to B? Or is an elective transfer needed under the 411(d)-4 regs?

I am embarrassed to ask this questions, because I should know. Are age 59 1/2 inservice distributions driven by the plan document or by govt. regulations?

Here's one to ponder.

No Apparent Guidance on this.

A qp or 403(b) plan has a deceased participant who has a non-spouse beneficiary. The participant died 1998. Non-spouse beneficiary has been taking annuity style distributions from the plan in accordance with the one year rule.

The latest newsletter from the IRS says that a direct rollover from the qp or 403(b) must be accomplished before the end of the year following the year of death to be eligible for the annuity method.

However, what if those distributions were already being done from the qp? Can a direct rollover be accomplished and still retain the annuity rule? Also

what if the death was after RBD?

An ESOP with an outstanding loan is being terminated.Does the outstanding loan amount go against the stock valuation? Or more simply put , the company pays out the value of the stock less any outstanding loan obligations. Is this correct?

We have an EE who no longer faces the threat of forfeiture with respect to his SERP benefits.

I read the Regs for 3121 re FICA taxes and understand that section but i am wondering if we don't also need employer federal income tax withholding on the SERP benefits.

can anyone help?

MPP with plan year of 11-1 to 10-31. No restrictions (LD or hours) on receiving the employer contribution (5% of comp.). Employer wants to amend to PS/401(k) effective 5-1-07.

1. Can the employer amend effective 5-1-07 and fund the plan based on compensation earned up to 5-1-07 (204(h) notices, etc. to be done)? Or

2. Does the employer have to continue to fund through the end of the plan year (10-31-07) based on compensation through that date (204(h) notices etc.)?

Have received a couple of different opinions that #1 is acceptable based on 1.412(b)4© which basically states no contribution due after the date of plan termination. But those supporting #2 state that if there are no restrictions on receiving the contribution, once a participant accrues a right the full contribution is due for the entire plan year.

Now I suppose you could amend the plan year to end 4-30-07 which would make this all moot but absent the plan year change any thoughts?