The buyer is the successor employer and hired all of seller employees except two who will be working for buyer as independent contractors. Buyer is assuming COBRA obligation (buyer has a health plan, seller does not). Buyer's plan excludes independent contractors. Under 54.4980B-9 Q&A 6, an asset sale is a qualifying event with respect to covered employees unless the buyer is a successor employer (it is) and the employee is "employed by the buying group." Are the independent contractors treated as "employed by the buying group" thus there is no qualifying event or must they be offered COBRA?

Thanks for any help.

What is considered an Affiliated Service Group for retirement plan issues.

This is requesting a quick answer(I know it is late in the year), for a situation where there is:

1)W2 income with a 401k that gets contributed maximally with matching by employer

2)K1 income that is subject to SE tax from an LLC partnership due to a consulting agreement...equal partners only. No employees.

3) 1099 income outside the LLC

All for the same person...

Want to know if the 1099 and K1 incomes can be pooled to make a larger DB plan contribution. This is the first year we will be doing a DB plan

An LLC was set up with 8 medical consulting partners. Can the SEP IRA be set up now by the LLC and funded for the 2006 year by the LLC in 2007 and also for 2007 that same year? I presume that taxes will be filed April 15, 2007 for 2006.

I suppose that the contributions to the SEP will be deducted from the parners' income... by the LLC?

are elective deferrals included in calculating the abp in a straight new comparability ps? or in a cash balance plan/401(k) plan?

I'm getting mixed signals from what I read.

Participants self-direct & under PPA must receive quarterly statements. Do those quarterly statements have to contain vesting or is it sufficeint that vesting be included on an annual statement only? If I could get a cite to the correct PPA provision that would beneficial.

Thanks in advnace for any guidance.

I am looking at a plan that allows for hardship w/d, loans, and age 59-1/2 inservice w/d (this is a 401k plan). The owner would like to eliminate at least 2 of these 3 provisions. Is that allowable, or are all 3 considered protected benefits, that may only be allowed to be removed for new participants?

Thank You.

Company A has a 3 year cliff vesting schedule but no employer contributions have been made (401k only so far). Company B has a 5 year graded schedule. Company A is merging into Company B. Even though there are no ER contributions in Co A’s plan do we have to allow the participants the right to choose the 3 year cliff if they have at least 3 years of service? I know the answer is yes if there were actual $$s.

Could an employer choose to freeze or terminate a SIMPLE 401(k) and then start a regular 401(k) during the middle of a plan year? Does anyone know of a good reference book for SIMPLE 401(k) and SIMPLE IRAs?

Thanks!

Participant in a 401(k) plan died 4 years ago and his daughter has been receiving about $10,000 each year and her final payment (due to 5 year rule) of approximately $300,000 needs to be distributed in 2007. Can the daughter roll the remaining benefit to an IRA in 2007 and disburse each year $10,000 from the IRA? Would she be allowed to take only the minimum distribution based on her life expectancy from the IRA? The father died before his required beginning date. Thanks!

Which benefits are considered health plans versus welfare plans? It seems like they are interchangeable at times.

Medical I would assume is a health plan and life insurance a welfare but in reading information on line I have seem medical referenced as a welfare plan.

Is there a difference?

Moving forward participant directed account quarterly statements require a reference to the Internet webite of the DOL for sources of information on individual investing and diversification.

I looked at the consumer information section under dol.gov/ebsa and did not see a topic for individual investing and diversification. Should I be looking somewhere else?

Parent A owns 100% of Company X. A also owns 52% of Company Y with 4 adult children also owning 32%(8% each). The other 16% ownership is unrelated. I would just like confirmation that this would represent a controlled group since A owns MORE than 50%, thus requiring the adult childrens shares to be considered for a total of 84%. On the other hand, if A only owned an even 50%, and each adult child had 8.50% each totalling 34%, there would not be a controlled group situation between Company X & Y.

I have a Roth IRA that I would like to be able to transfer to my 401k plan at work. My company is now offering 401k roth that I can choose to change to if I want. But is there any way I can roll that Roth IRA over into a 401k traditional or roth?

Assume a sponsor of a defined benefit plan has underpaid certain participants due to an operational failure. The plan sponsor opts to correct the mistake under the SCP or VCP by making payments to affected participants that include the amount of underpayment plus interest. Does the interest payment come from plan assets, or from the employer?

Thanks for any ideas.

Existing DB client has some ownership in another entity that may or may not constitute an Affiliated Service Group (yes, it would have been nice to know that upfront, we did ask). The plan has been around a few years already. Will the IRS issue a PLR on just an Affiliated Service group issue by itself ? Or does it have to be part of a plan doc qualification submission ? Thanks.

Is there a way to correct an operational error in which a distribution was made to someone who was not eligible to receive the distribution?

I have a situation in which a participant received distribution from a 401(k) plan but there was no distribution event under the plan. The participant has since rolled the distribution to an IRA. The participant is willing to roll the money back to the plan but I have my doubts whether this will "fix" the problem or something else must be done.

Any ideas?

can anyone lend me insight re the following:

Corp A= john 25 %; pam 37%; and mary 38%

Corp B= john 15; pam 15; mary 15; joe 55

Corp C= john 33.3; pam 33.3; and mary 33.3

when applying section 1563's brother-sister controlled group analysis, do you apply the test on a one-on-one basis or as a group?

for example: would you look at corp A and corp B. corp A and corp C

and then corp B and corp A. corp B and corp C.

and then corp c and A. corp C and B?

OR

do you look at all three together and see if the 50-80% tests apply to them as a group of three companies?

thanks in advance for your help.

Please advise if my thought process is correct or not...

Participant dies 12/31/2005

Participant's DOB 12/20/1924

Participant was receiving RMD's prior to death

There are multiple beneficiaries (not an estate)

The company changed investment companies in 2005, and no 2005 RMD was prepared (new plan to me in 2006).

To calculate the RMD for the beneficiaries, I would need the oldest beneficiary's DOB correct?

I would then use the beneficiary's age to get my life expectancy factor, correct?

To calculate the RMD, I would then divide the 2004 ending balance by the factor to get the 2005 RMD, correct?

Since the participant died in 2005, I would need to provide the first RMD to the bene's by 12/31/2006, correct? I would also need to calculate the 2006 RMD...and both would be distributed before 12/31/2006, correct?

Thank you so much for any advice you can provide.

The owner of a PEO (Co. A) started a multiple employer plan several years ago. 5500s were never filed. He also owns one of the companies (Co. B) participating in the plan. He is in the process of selling Co. B. However, the buyer is withholding a substantial sum of money until the 5500s are filed. The owner would like to pull Co. B out of the group and file 5500s just for that plan. He knows he is obligated to take care of the 5500 filings for the multiple employer group, but says he needs to get his other company (Co. B) taken care of first because of all the money that's being withheld from the sale.

This sounds unethical to me, but not illegal. I'm hoping to get some thoughts from other practitioners.