I've looked at several similar threads on this, but most are old enough that I wanted to see if there were any new ideas...

4 participants of a plan have returned to Ecuador - a very "in the middle of the night" kind of deal. Three have balances in excess of $5,000, and the other is over $1,000 (which is the plan's new automatic distribution threshold effective 3/27/05), so there's no basis for an immediate distribution anyway.

Can these participants be declared "lost" or "missing"? They have sent certified letters to their last known address (which have all been returned, naturally). They were not in any of the employer's other plans, so there's no information there. Regarding beneficiaries, they either didn't complete it or were each other's beneficiaries, so that's not going to help. And I can't imagine the IRS or SSA letter forwarding service is going to be able to find them - they'll have the 2005 address, and I highly doubt they are going to pay taxes in 2006!

Our plan document (Datair prototype) says that if they don't respond within 3 years of sending a certified letter, "the ultimate disposition of the then undistributed balance of the Distributable Benefit of such Participant or Beneficiary shall be determined in accordance with the then applicable Federal laws, rules, and regulations."

It seems that I just have to tell my client to sit tight until 3 years have passed and then revisit the issue, right? But let's say that three years is now - what would I do with this money?

Thanks.

Is there much of a difference for a non-electing church plan to go with a 401k vs 403b? Does using a 401(k) make it subject to ERISA?

Also, as a TPA, I'm having a tough time seeing what role we would have in adminstering a church plan. If the document has to be individually designed and maintained (which we do not do) and there are no 5500s, discrimination testing, etc. for us to provide service on, then what, if anything, is there for TPAs to do?

Does anyone know whether the value of retiree health coverage provided to a retiree's domestic partner under an employer-sponsored retiree health plan, which is typically imputed income to the employee, is reported on a Form W-2 or, alternatively a Form 1099?

I have looked at the regs, the instructions to the 1099 (specifically the instructions to the 1099-R and 1099-Misc) and the W-2 and Publications 15, 15-A and 15-B and everything seems to point to the following:

1. The employer should treat the value of the DP retiree coverage as imputed income to the employee;

2. The imputed income is wages for purposes of employment taxes and withholding; and

3. The wages should be reported on a Form W-2.

Note: The coverage is being funded through a VEBA.

Does anybody have any thoughts? One additional rub... if the W-2 is the correct form, withholding clearly applies, but there will liikely be nothing to withhold from because the former employee will not have wages in addition to the imputed income. This leads I think to the unpalatable result of either (1) the employer paying the amount needing to be withheld (which is also wages to the employee and subject to tax, etc.) or (2) requiring the employee to make some sort of after-tax payment to the employer equal to the amount to be withheld.

If anybody has any ideas or has looked at these issues, please help!!!!

Individual sold the assets of his single member LLC (assume it was an "asset" sale, since there was no "stock", per se, to sell). Same individual subsequently established a new single member LLC and wants to set up a PS Plan for the new LLC. Some of the employees of the "old" LLC are now employees of the "new" LLC.

Must/may the PS Plan of the "new" single member LLC take into consideration service performed for the "old" LLC for initial eligibility and/or vesting under the new PS Plan?

Thanks!

I got a strange request. The lone participant in a one participant plan asked the following question. Can the plan buy a life insurance policy currently owned by the participant's sister for $X. The insured is the sister's ex-husband. The policy is still in force. I don't know any other details about the policy, premium, cash value etc. Has anyone heard of such a thing? Can it be done? Is there any reason it would be a prohibited transaction?

This one is another step in the "now I've heard everything" direction.

Thanks for any help.

What does it take to get back into the field? Earlier in my career I worked for major companies in the Boston area (Putnam, State Street and Boston Financial) About 5 years ago I had to leave my job to tend to a family business crisis.

During that time I was still working on attaining the CEBS certification. This year I finally sold the family business to return the Defined Contribution field. I received the CEBS designation and have been trying to get a job. I found out that because of not being in the business for 5 years hiring managers don't want hire someone that does not have recent experience. I can't believe that companies don't want to hire an experienced employee with incredable skills.

I am willing to relocate to the North Carolina area. I even looked into Texas. Does anyone have any suggestions? I'm even willing to take a step back to move forward.

Through an acquisition, an otherwise ineligible employer adopted a company's SIMPLE 401(k) plan. Can the new sponsor freeze the SIMPLE 401(k) and continue to maintain that frozen plan beyond the time period permitted under Section 410(b)(6)©? The participants in the SIMPLE 401(k) will become participants in the employer's long standing "regular" 401(k) plan prior to the expiration of the transition period.

I just wanted to vent for a moment here...has anyone else thought about the fact that these safe harbor notices are supposed to be written as such that they can be understood by the "average participant", and yet for many of my plans, we are supposed to add all of this info that I know will only confuse the already confused masses?!?!

As an example, I have a safe harbor multiple employer plan. The plan currently has basically only 401(k) deferrals and safe harbor matching. The plan doc was written to allow for discretionary match and/or profit share, but the chances are slim to none that any of the Employers will ever take advantage of those provisions.

We had a great (one page!) safe harbor notice for 2006, that explained many of the things required in the new notice, but did use the SPD reference for things like the "other employer contributions" and "vesting" that now are required in the notice.

What is the purpose of the SPD if we have to regurgatate all of that info over again for other employer contributions that are not even related in any way to the safe harbor match???

Can anyone make sense of this for me.......?

If an owner of a company that sponsors a DB plan takes a loan to use as a down payment for a personal residence can the interest on such loan be deducted?

It is clear that in non home related matters the interest is not deductible, but in the above case I am not so sure.

Thanks.

A client started a Profit Sharing Plan for his one-person company so that he can quickly and cheaply borrow 50% of the assets. The problem is how to get around the expense of an administrator, since compliance for a one-person company should be about as simple as it gets.

His CPA balked, however, at preparing the loan documentation.

Any suggestions? Any ready-made forms you can recommend?

Thanks!

- Rob

If a participant is on a maternity leave of absence at the end of the plan year, are they entitled to the top heavy contribution.

Published as a proposed reg on 12/02/2005:

http://a257.g.akamaitech.net/7/257/2422/01...pdf/E5-6742.pdf

In the table, two of the columns have superscripts: 7 or 8. No footnote number 7 opr 8. Anyone know if this is a typo, or something omitted?

I'm having trouble understanding a portion of the final 401k regs concerning the use of the ACP safe harbor: If a plan uses an additional match (in addition to the basic safe harbor match), and that additional match has a 1000 hour/last day requirement, is it just the additional match that is subject to the ACP test, or is it that the additional match PLUS the basic safe harbor match is now subject to the ACP test.

Thanks

Good morning,

Can an employer amend the frequency of their safe harbor match from a per payroll period to annual basis for the current year (2006) without losing their safe harbor protection or can they only amend it to be effective for 2007? Their safe harbor notice does not identify the frequency however the SPD does.

Thank you!

added catch-up language (though that can be supressed)

a little more detailed language under 'distribution and vesting.'

of course, this is a minimum. you have to modify references to the SPD and be pretty specific what section is being referred to. and certainly add anything more you feel comfortable with. still looks like 2 maybe 3 pages depending on if plan has both SHNEC and SHMAC.

same instructions as before

alpha numeric User fields in plan specs:

#20 deferral changes can be made (e.g. quarterly or monthly, etc)

#21 is compensation definition (e.g. Total or comp less bonus, etc)

#22 and #23 distribution conditions (e.g. upon termination) and added #24

#25 contact person (e.g. Blunky the one eyed newt)

#26, #27 and #28 vesting schedule

#26 2yrs 20% 3 yrs 40%

#27 4 yrs 60% 5 yrs 80%

#28 6 yrs 100%

#29 hours for vesting (this might only be available on version 11.0) I added this after the fact. I figured it can't hurt.

The preamble to the final (k) regs (Section F) says the ADP/ACP testing provisions may be incorporated by reference and if there are any optional choices, "the plan must provide which of the optional choices will apply". Does this mean all testing options must be in the plan, even if testing is not incorporated by reference.

In the past, plans that I have worked with have not addressed many of the testing options. A few examples:

1) If there are several plans in the controlled group, must the plan identify any and all plans with which it will be aggregated and/or not aggregated?

2) Must the plan state whether it will or will not be disaggregated for participants who have not met the minimum age/service requirements? (as opposed to saying the plan will be disaggregated at the election of the Plan Administator)

3) Must a plan state whether it will or will not recharacterize elective deferrals? (again, as opposed to giving the power to recharacterize to the Plan Administrator or a Committee.)

Thanks in advance.

When deferred shares are repurchased by the company from a recently terminated employee, is that money taxable for the employee for federal withholding & FICA?

Plan calls for employer match to be deposited on a per payroll basis with year-end true-up. Former attorney apparently told plan sponsor that it was required to add interest to the year-end true-up contribution. No one can find anything in writing from the attorney, nor did anyone note the reasons that the attorney may have given as the basis for this opinion. I can find no basis for requiring interest, but, admittedly have not researched the issue to death.

Any thoughts on this issue? Any cites would also be most welcome.

Are the rules the same for retirement plans and IRAs in regards to when Unrelated Business Taxable Income when there is debt-financing ? I believe under IRC 990-T and regs "some" structure of debt-financing will not automatically trigger UBTI on the rental income, but if the debt is not structured in standard fashion (i.e., variable interest rate tied to profits, or seller carry-back agreements) then it will trigger UBTI rules and not be exempt. Is this the same for IRAs ? or is any rental income earned from debt-financed property in an IRA going to be subject to UBTI.

The PPA states a participant directed DC plan must provide quarterly benefit statements and the statement now must provide for the vested accrued benefit (among other things).

The PPA (Sec. 508) also states the requirement that the benefit statement show the vested accured amount can be satisfied if the plan provides an annual "alternative notice."

Question - I understand the new rules for the benefit statement are effective for plan years beginning in 2007. Does that mean for the first benefit statement for the 2007 plan year?

What if a plan is going to use the alternative notice to satisfy the requirement to disclose the vested accrued benefit. Am I correct in assuming that using this alternative notice will essentially give plans until the end of 2007 (or whatever the plan year is) to tell participants what their vested accrued benefit is since it will satisfy the "annual" requirement?