Dr. Jane Doe is 100% owner of her medical practice. She has a prototype Safe Harbor PS/401k for her six employees. Her husband, Dr. John Doe, is setting up his own medical practice in his wife's office and will share her staff. Dr. John Doe will be the only employee in his practice.

Dan Dr. John Doe adopt his wife's PS/401k plan?

Having looked at the history of posts related to ASG issues, my scenario seems straightforward.

Dr. D owns 100% of JD Dental. Dr. R (an HCE) works as an employee of JD Dental. Dr. R wants to strike out on his own with the "blessing" of Dr. D.

Dr. D will let Dr. R go out on his own with no issues, but wants to sign Dr. R's new company to a 5-year contract to provide services to JD Dental and its patients. Dr R's new company (owned 100% by Dr. R) can do work for other companies, but likely will receive 100% of its revenues from JD Dental. Dr. R's revenue will come solely from working on JD Dental's patients, and no revenues will be related to management functions for JD Dental since Dr. D provides all of those.

Dr. D will not own any of Dr. R's new company. Dr. R has never owned any part of JD Dental.

1) is this an ASG? Since there is not one whit of common ownership, nor any management functions, I think not.

2) if not, can Dr. R set up a retirement plan for his new company without any potential coverage ramifications with JD Dental's plans?

The father-in-law of the owner is currently employed and is over 70-1/2. Is it necessary that he receive a minimum distribution as long as he stays employed?

Thanks

I'm a non-spouse beneficiary of 401(k). I'm wondering about Plan requirements to notify participants re: the new inherited IRA rollover to non-spouses option in PPA.

My plan hasn't made any written notification to participants or put one on their website about their policy of handling non-spousal distributions to inherited IRA. On the phone I've been told that they don't allow it--PPA makes it optional for plans to do or not. I'm not sure I'm getting accurate info from Plan.

I need to make my distribution-type decision by Feb. 15. I'll lose $20,000 in taxes if not able to roll to inherited IRA.

Are plans required to notify what their policy is--here and for any new changes or relating to new laws even if opting out, and what are terms of any given requirement?

Is it possible to change the search function so that capitalization is not a factor when looking for a match? I have been stymied several times in my searches by a stray capital letter.

My wife and I both have a Roth Ira. My wife did not work in 2006 but I made enough money to contribute for both of us....($4,000 each)....Am I correct that I was able to do this.. Did I have to open up a different "spousal" IRA or was I correct in just contributing to her existing IRA already? Thanks for any help.

In an article I read recently, the author recommended that 403(b) sponsors select a single investment vendor rather than offering a choice of several. The context of the discussion was the new regs and changes to plan operation. In your opinion, is the main reason for this recommendation better control, reliability and availability of investment information, is it to simplify communication & education, or is it for other reasons? Please comment. Thanks.

Can a safe harbor contribution be made with employer stock? If anyone has a cite one way or another that would be great, thanks.

Is a DB plan sponsored a governmental employer required to provide for actuarial increase in case where participant continued to work past Normal Retirement Age?

I'm aware of the penalties imposed for failing to issue 1099s. Does anyone have a sense as to whether there would be any liability to the recipients? For example, a participant receives a distribution, but did not receive a 1099 and does not report that amount on their personal return. Would the company be liable for the costs (and potentially additional tax owed) incurred by a participant? Granted, the participant knew they received a distribution, but did not report it. Is anyone aware of any caselaw on this? Thanks.

I am staring at a grandfathered governmental 401(k) Plan, which I have never dealt with before. I thought some of the experts would have some advice on the following two specific issues:

1. Is there any reason NOT to recommend immeidate termination of the 401(k) and rollover into a newly created 457 Plan?

2. Grandfathered governmental 401(k) plans are not subject to various forms of discrimination testing (ADP/ACP). The plan, however, has a generic plan document that does not identify it as a grandfathered plan, and states that various ADP/ACP tests will be conducted if there is no safe harbor election. Does anyone think that this sort of language would cause a plan to "elect in" to such testing?

Thanks in advance.

A doctor(age 60), who is the only active employee in a terminated pension plan, wants to take a portion of his account balance ($17,000). He has been advised that 20% with holding is not required. From reading prior posts, it appears as if he is being given incorrect information. He is not terminated and will not be taking installment or periodic payments. Is he subject to the 20% and ordinary income or just the ordinary income?

we have a KSOP plan with 3 components: elective deferrals, matching and profit sharing.

with respect to the ESOP portion, what date does one use in conducting ADP/ACP testing (i.e., can you pick any day of the plan year to conduct testing)?

my thought is that, b/c all of the investments are self-directed, youcould have very different investment levels b/w HCEs and NHCEs on any given day of the year.

any thoughts?

I have a safe harbor non-elective 401(k) plan - and unfortunately the owner of the company has a son who is only 20 years old and is eligible for the plan. The son contributes to the 401(k) and is eligible for the 3% safe harbor non-elective contribution - which on its own accord kills the rate group testing when I cross test becuase of his age in relation to all other employees - he is by far the youngest.

I think I can tset him as an otherwise excludable (OE) employee - he is only 20. But I also have one NHC employee I have to move into OE group. I can then run seperate testing on the employees who meet the statutory requirements and a test on the OE employees.

My question - Can I cross test the group with the statutory employees and then choose to test the OE group on a contribution basis? My volume submitter doc. does not prescribe a specific testing method. So by regulation can I test the groups different ways?

A sole prop's deduction for a pension plan is limited to the net Sch C earnings minus 1/2 Self Employment Tax.

A sole prop's net profits are $20k with a required DB contribution of $100k, $80k+ of which cannot be deducted.

Compare this with:

A one-person S-Corp has revenue of $25k, $5k of non pension plan expenses and $100k of contribution for the DB plan it sponsors, thus creating a loss of $80k.

The loss of $80k flows to the only shareholder and ends up on his/her Form 1040 (line 17 for yr 2005) thus reducing his/her other taxable income of any description (shareholder/spouse's W2, investment income...) which far exceeds the S-Corp loss of $80k.

The DB contribution will be paid by the S-Corp with the money loaned by the S-Corp's shareholder.

Ignoring the issues relating to the loan from the owner to the corp (interest on the loan/imputed income..), corporate taxes and extra admin expenses, is there anything wrong with the above mentioned S-Corp situation?

A plan hits the traditional (aka ERISA) full funding limitation (FFL) but the 90% of RPA '94 FFL is higher than the ERISA FFL thus requiring the plan to contribute more than the ERISA FFL.

There is no base for waived deficiency.

Should the amortization bases be set to zero (fully amortized) in the following year?

I say yes but what say ye?

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A participant was first eligible to diversify a part of his account in his company's ESOP. So the ESOP distributed to him the stock shares which he immediately redeemed for the cash value and a check was written directly to him. Because of the process, there was no 20% withholding. For purposes of form 1099-R what would the Distribution Code be? He is under 59 1/2 so I'm guessing it is simply code '1'. Is that correct?

For those of you fellow TPAs who can take just a minute away from annual data requests, 1099-R prep and 401(k) testing...

I am a "micro" TPA shop (DC only) and am looking into purchasing some sort of reference resource. In the past I have usually purchased various versions of the "Answer Books" (Aspen Publishers), but it seems such a waste to buy hard-bound books anymore, especially when they are typically already somewhat "dated" before the ink dries! Consequently, I am interested in a CD-based or WEB-based service that's updated periodically.

The "ERISA Outline Book" seems to be the reference of choice for most of the BenefisLink subscribers (plus, the price seems much more "budget-friendly" than many services). That being said, I'd be interested in hearing any and all comments (pro and/or con) that anyone would care to offer regarding other resource providers - e.g., Sungard Corbel's "Pension Library", Aspen's "Pension and Benefits eLibrary", CCH's WEB-based "Pension Plan Guide", etc.

Thanks for the input!

Does anyone know how many 403(b) salary reduction agreements an employee can make during the year?

TIA