I have a s/h 401(k) plan that uses the 3% non-elective contribution allocated to all participants.

The plan also has a discretionary profit sharing contribution, integrated, allocated only to participants that are employed at the end of the plan year and work 1000 hours.

I have five non-highly compensated employees that were eligible only for the s/h non-elective.

If I am reading the ERISA outline book correctly, it looks like I can re-structure into component plans to pass coverage? Does that mean that I put the 5 participants in one plan, since no hces benefit, it passes coverage? Then put all the other participants in another plan, all ees benefit..passes coverage?

Is is this even necessary? My concern is the discussion about the design based safe harbor status of the plan.....The allocation rates are not uniform in this situation. If I'm reading it right, it's okay as long as the plan passes coverage....is that correct?

Thanks.

If a small plan holds just cash no money market or goverment bond that is greater than 20% of Assets does it need to be reported on 4i? I can't find anything in any book about holding more than 20% in cash. The main point of this question is to assess prudence of investments practices so to reduce large losses. Yes you won't lose any money holding cash but you wont make any gains, so my thinking is that it se be reported because holding large amounts of cash is not very diversify. Any thoughts? Experiance?

Ok, I just received confirmation from the plan sponsor/trustee/owner that his dad died in 1994. We became the TPA of this plan back in 2003, but we were never given any info that this partiicpant was dec'd - he is just listed as retired and we have no death cert on file. The estate atty of the trustee has told him that the bene (the dec'd's spouse) can roll the account into her account in the plan (she used to work there too). I don't have a problem doing this - my concern is that he has been dead for 12 years - I thought this needed to be done within 5 years? Would there be any repercussions if the plan was ever audited? The plan is a P/S plan that is valued annually and is pooled. So techincally, it would have earned the same interest or losses whether is was listed as the account of "M" as it would have as listed as the rollover of "A," the spouse.

Am I worring over nothing?

I am trying to decide where to open my Rollover IRA and Roth IRA accounts.

I have searched and read many articles and discussions on this topic. However, I have not found a clear answer so far. Perhaps it is a matter of spending more time on this. I figure it is worth a shot to ask this question here.

Basically, I am trying to decide between using a mutual fund company such as Vanguard vs. a discount broker such as Scottrade.

At first glance, it seems that a discount brokerage would be preferable. It would afford wider selection of mutual funds and other investment instruments to choose from. As far as I can tell, there is no cost penalty when buying mutual fund shared through a discount broker vs. buying the same shares of the same fund through the mutual company direct. Except, there is a flat fee charged for every transaction (buy, sell or exchange). And this is the cause of my indecision.

I currently have a regular brokerage account with Scottrade. If I open my IRA accounts with them, I will have access to a variety of mutual funds. If I want to buy Vanguard index funds with very low expense ratios, I can buy them and pay the $17 fee Scottrade charges per transaction. That would prevent me from buying additional shares of the same fund on regular basis because $17 would be a significant percentage. So I would have to limit myself to perhaps annual contributions to my Roth IRA fund(s).

Instead of using Scottrade, I can open an account with Vanguard directly. I would have to pay account maintenance fees, IRA custodial fees and (higher) brokerage commissions on any non-Vanguard funds that I decide to invest in.

After having examined fee structures, I think it would be more cost-effective to open these two accounts with a mutual fund company directly, especially if I would be primarily interested in buying their own mutual funds. This way I can avoid spending $17 on commission whenever I want to add money or make changes. Am I missing something here?

A client who is the 100% owner of a medical practice has historically also owned 100% of a real estate partnership with no employees and no W-2s. The medical practice has a cross-tested profit sharing plan in place in which the owner maxes out his contribution each year. In 2006 a new, full-time employee was hired by the real estate partnership. The owner still does not recieve a W-2 or any salary fro the real estate partnership, only K-1 income.

I believe this is now a brother-sister type of controlled group situation and the employee of the real estate partnership needs to be included in the testing for the profit sharing plan sponsored by the medical practice, is this correct?

Can the real estate partnership adopt the same plan sponsored by the medical practice as a related employer and the new employee be covered or does a separate plan for this one employee need to be created, sponsored solely by the real estate partnership?

What other consequences are there to the hire of this new employee?

Assume a 457(f) pays an annual benefit over a 10-year period. The participant is taxed on the full amount upon vesting, even though they won't receive the entire benefit for 10 years. Since the participant already recognized the entire benefit as income and paid the tax, it does not appear as though it would matter if payments were "accelerated" after vesting. Anyone comments?

Does anyone happen to have a chart of what states require withholding for state income taxes for 401(k) deferrals, and what states don't?

Thanks in advance.

When does an employer have to decide whether it will make a discretionary matching contribution? I know when the match has to be made to get the deduction, but does the employer have to adopt an amendment or have a board resolution that provides for the match by the end of the plan year to which the match applies?

If a client has a Profit Sharing Plan and a Cash Balance Plan, do they need to file two separate 5500's?

I am looking for benchmark data for total benefits as a percentage of payroll. Can someone suggest where to look or a survey that we can participate in for this information. Historically we have used data from Hay but we are looking for a new or additional source. Thanks.

Under the PPA, a plan that has been operating as a single employer plan can file an election of multiemployer plan status with the PBGC if it meets certain criteria and sends a notice to participants, beneficiaries and employers. Plans would presumably have to adopt amendments relating to withdrawal liability, 415 limitations, top-heavy rules, etc. Does anyone know whether any regulatory guidance is expected regarding such amendments? Should we assume that the PPA's remedial amendment period applies to such amendments?

In the DOL guidance http://www.dol.gov/ebsa/regs/fab_2006-3.html the 45 day deadline for issueing benefit statements seems to speak to DC plans. Defined Benefit plan participant benefit statements are referred to after the 45 day deadline is mentioned (in item 3). Does the 45 day deadline apply to DB plans?? Also, does the 45 day deadline also appy to the alternative notice provision for DB plans?? It looks to me like the DOL guidance specifically states the 45 day deadline applies to individual account plans. Any clarification is appreciated. Thanks.

Can anyone provide me a site I could use to provide a client as to when the early distribution penalty applies. My understanding is that is is the date the participant ACTUALY attains age 591/2 not the calendar year which they turn 59 1/2

A husband and wife have different plans. The husband has an HSA plan under his employer, and the wife has a $250 deductible PPO plan with her employer.

Can the husband use his HSA funds to pay for his wife's out-of-pocket expenses?

Have a plan that is top heavy ,integrated and only provides allocation to terminated particpants with more than 500 hours, top heavy mins go to all actives employed on last day of plan year.

Question. If client puts in small contribution that doesnt allow plan to integrate 3% base + 3% excess, then how does allocation work?

First we gave 3% th min to all actives per document. This leaves about 1.5% of base plus 1.5% of excess to allocate.

So do terms wtih >500 hours get only 1.5% of base + 1.5% of excess?? Which is less than the th minimum people got?

seems weird that you can do this in prototype and if so, then are we in general testing land?

Who thought integration could be so much fun!

I was wondering if someone could help me with this question. Assume a TPA meets the requirements for being an IRA provider. How can a TPA offer IRA products to participants of a Plan it administers and get around having a prohibited transaction? I know there is an PTE for automatic rollovers, but what about for amounts above the automatic rollovers? Is there a particular exemption or way to get around it? Consider a TPA and wants to start offering IRA products to plan participants who may leave the plan and want to rollover their accounts to an IRA. I can't find anything on point. Please help

Sorry for another post about IRAs. I am getting there with selecting a company but before that

i am curious on what most of you veterans are investing in for your IRA. Is it Stocks or Funds? I found some brief pros/cons for them and a couple of articles say that Stocks are good early on and then fall to "safer" funds when getting older. Also, my Stock friend told me that historically Stocks grow higher than funds. He also told me Energy funds is a good fund to buy.

I am 25 right now and I want to invest the maximum (4000) per year into a ROTH IRA and am wondering if I should go with investing in Stocks or high return funds. I want to figure out what the "best" way to go so i can pick my company since some might be better than others in one or the other. Any suggestions? Thanks a bunch!

Do plan earnings fall under question 10g even though the instructions say to not include unrealized earnings/losses in 10g? If yes, can you give me an example of what types of contributions would cause question 10c to be answered? Think I'm having a brain cramp......thanks in advance

We just closed our PYE 2005 in mid-Dec 2006. (strike one) While we understood that we failed the ADP test, we did not know the amounts of the refunds due to the ADP test. (strike two) At the last minute [a week before the new year] we finally get our information from our administrators and accidently forget to send the distribution request to remove the funds before 12/31/06. As it stands now, our erisa attorney has not sent our 5500 off, or even if this can help our excess contributions for the following plan year.

Any opinions or options? I am hopefully to see some light at the end of this 401k tunnel.

Hello Everyone, new user here.

My Question is as follows: Can I transfer my existing IRA into my wife's name? This IRA was formed with pension funds after retirement. If so will ther be any tax implications?

Thank You Bob