someone told me that for the schedule b, i only need update every 3 years... is this correct? how could it be?

example... for 2006 Schedule B, valuation date 1/1/2004... for 2005 Schedule B, valuation date 1/1/2004 and 2004 schedule b 1/1/2004

Employer would like to allow participants to "purchase" service credit to qualify them for early retirement subsidy that they would not otherwise qualify for. Employees are all NHCEs. Is there anything prohibiting this?

I'm not advocating it. I just would like a direct answer to the question: is there anything that would prohibit this?

Thanks for any comments.

Is there any method to correct SEP contributions. For the last several years, a client only used base wages for contributions that were declared. They have been operating under the Model 5305 and did not know they could not exclude bonuses and overtime. Can they self-correct?

I am looking for clarification on who is a Highly Compensated Employee.

I understand the basic definition of a HCE.

I am doing testing for 2006. Is a HCE someone who earned more than $95,000 in 2005? or more than $100,000 in 2005?

I have seen it done both ways but I want to know what is the correct way.

Thank you, AJM

What type of compensation does the owner of an LLC usually receive - is it W-2 wages or some other type? Also, are there any quirks to what LLC compensation can be used for qualified plan purposes (in the way, e.g., how sub-s corps. should only use W-2 wages and not the pass-through income for calcs.)?

Loans from plans subject to QJSA require spousal consent. Spousal consent is not required if the $5,000 cash out applies. When applying that exception, do you use the total account balance or just the portion of the account used to secure the loan? For example, assume a participant has a $10,000 account balance (fully vested) and applies for a $3,000 loan. Is spousal consent needed?

Need to know! Is there a time frame that an employer has legally to adhere to when reimbursing your FSA monies? I was told I would have a check in two weeks. I submitted all receipts last week of December and as of the date of this post still have not received the $600 from my account. I have also willfully left my employment with the company the middle of February, but have maintained contact. I keep getting "oh the check is in the mail for the amount of $600, or the check was misplaced, and so on and so on. Are there penalties or fines the employer or managing agent of the FSA account can face by not expediting this return of my money in a certain amount of time? I'm very frustrated. Too, I now live out of the US and feel that I am just getting the run around. Thanks for your time. Not sure what my next step should be here but this just doesn't seem right.

Given: A professional (registered with SEC) investment advisor .... renders investment advise to 10 different separate unrelated retirement plans.

Given: He meets the Erisa definition of a "fiduciary" for each of the 10 plans.

QUESTIONS:

1) ERISA requires that he be bonded , right ?

2) Is he required to obtain the bond or is the plan(s) required to obtain the bond ?

What ERISA code section # or DOL reg # states who is required to obtain the bond.

3) I've heard that ERISA "allows" him to obtain a "single bond" which names him as principal and all 10 plans as obligees, but that the "single bond" must allow recovery by each plan in an amount that would be required if each plan were bonded separately.

Does anyone know which ERISA code section # or DOL reg # that states that ERISA allows the things stated in 3) above ?

ER had a hickup with payroll. Didn't deduct contributions. Would it be fair to double up next paycheck or rather make up the contribution in the form of a QNEC. Where does this stand with the EBSA? would they be the body guiding this?

ER had a hickup with payroll. Didn't deduct contributions. Would it be fair to double up next paycheck or rather make up the contribution in the form of a QNEC. Where does this stand with the EBSA? would they be the body guiding this?

Generally, the second tier tax of 100% is avoided if the prohibited transaction is corrected during the taxable period. Section 4975(f)(5) more or less defines correction as 'undoing' the PH. For example, if you have a loan to a DQ'd individual, you've got to undo the transaction and put the plan back as it would have been if the loan never occurred.

Is there any authority that correction must also include the filing of the 15% tax related to 4975(a) during the taxable period? I haven't come across any, but I recall reading that the Service has taken that position.

Thanks,

An employer has a 401(k)/ESOP plan and wants to contribute treasury stock to satisfy its 401(k) match (and pension sharing contribution).

I found PWBA Interpretive Bulletin 94-3, which makes a distinction between required and discretionary contributions. Other than that, I am not aware of any provision or regulation that would prevent an ER from contributing treasury stock.

Has anyone else run across this situation?

I couldn't find the correct forum to ask this question, but i knew the people in here would have the answer.

In layman's terms, could someone explain to me "Accumulated Other Comprehensive Income" as described by FASB 158?

It might be thursday or just me, but i just can't grasp the concept... Thank you in advance.

A 401(k) plan has a vesting schedule of 50% after 1 YOS, 75% after 2 YOS and 100% after 3 YOS. The employer wants to amend to a 2/20 schedule, but only for employees hired after a certain date.

Employees can make 401k contributions immediately upon hire (no eligibilty requirements, but have to wait 1 year to participate in the 401(k).

Since these new hires are actually participants in the plan, I think that they would be 50% vested after year 1, but would then follow the 2/20 schedule thereafter. That is, 50% after year 1, 2, and 3. Then, 60% after year 4, 80% year 5, and 100% year 6.

Does anyone agree with this?

I have a client that sponsors a DB plan and a profit sharing/401(k) plan. The only participants are highly compensated employees-2 ER doctors and the spouse of one of the doctors.

This client is asking if the DB plan could issue a mortgage loan to a limited partnership that is more than 50% owned by his wife, the spouse that is a plan participant, as long as he owns less than 1% of the partnership, and the loan is made at currently reasonable rates.

Also, would it make any difference if the 401(k) plan made the loan?

I find the prohibited transaction rules to be fairly confusing and would appreciate the opinions of those of you who deal with them more frequently.

Our health plan and 401(k) plan have a one-year waiting period before an employee can enroll. We want to hire someone as a full-time employee and provide the person with immediate benefits. The person has been an independent contractor with us for several years, so we will explore credit for prior service for the 401(k) plan.

For this one employee, is there a way we can waive the health plan’s service requirement or offer credit for prior service?

Is a 412(i) plan subject to 401(a)(26)?

Looking for some type of documentation here to help explain the law to a combative client. Here's the details:

Client sponsors 401(k) plan which has continued to withhold and submit deferrals through 2/2007. Plan sponsor now wants to terminate plan, effective 12/31/2006, and have all 2007 deferrals returned to his employees as a "mistake in fact" in order to avoid the cost of nondiscrimination testing for 2007.

We have told this client we cannot do this - the contributions have been posted to participant accounts and there is no legit reason for a "refund" - that in fact we would be facilitating a prohibited transaction.

Any ideas on best way to "show" this to the client?

I HAVE BEEN RETIRED FOR 7 YEARS AND BEEN COLLECTION MONTHLY PAYMENTS .

THE HOSPITAL PAID ALL OF THE TAXES AGAINST THE DEFERRED BENEFIT AT THE TIME OF MY RETIREMENT AND I WAS UNDER THE IMPRESSION THAT THEY WERE REDUCING MY YEARLY BENEFITS ON AN ACTUARIALLY BASIS OF 26.9 YEARS. NOW I DISCOVER THAT THEY HAVE BEEN REDUCING MY BENEFITS EACH YEAR BY AN AMOUNT MORE THAN TWICE THE ACTUARIALLY AMOUNT. IS THERE ANYTHING IN THE CODE THAT REQUIRES THE HOSPITLA TO RECOVER MORE THAN THE UP FRONT PAYMENT THAN THEY FUNDED. I DO NOT FEEL THE HOSPITAL IS CHARGING ME INTEREST ON THIS UP FRONT PAYMENT BECAUSE THERE IS NOTHING RE. IN THE CONTRACT. BUCK

Scenario: In 1993 the employer purchased individual insurance policies with a promise that each employee would get the policy when he or she retired. No plan documents, just policies and conversations. The employees expected to get the policy tax free on retirement and defer the income until they withdraw the cash from the policy.

Since there is no documentation, I am concerned that anything I do will be construed as a material modification that would trigger income and the 20% penalty. Any thoughts and suggestions will be greatly appreciated.