Person way past the required beginning date dies in 2005 leaving a 403(b) account to a daughter.

She is told that she has to take the money within 5 years and takes out some money in 2005.

Can she now roll to an IRA in her name fbo the deceased and annuitize it over her life expectancy or did that first distribution eliminate that option for her?

If so and depending upon the amount, could she back into an amount from which that first payment would represent an annuitized payment and rollover that amount to an IRA and continue that stream? And then take the other portion within 5 years...

Thanks

If a small company was looking for some software to create 5500 and 5300 forms, is Relius from Sungard the most popular choice?

Can anyone give me the names of some other software packages that will produce 5500 and 5300 forms?

Is there anyone who uses something other than Relius?

put this in wrong area and can't figure out how to delete. sorry.... posted in distributions

I am trying to confirm that there has been additional relief granted for Katrina affected areas for filing 12/31/05 Form 5500. Does anyone know for sure? If you can post a reference, that would be great. Thanks for any information, anyone can provide.

An independent contract is a debtor of a plan sponsor of a defined benefit plan. The plan sponsor intends to hire the independent contractor as an employee. This (new) employee will waive participation in the DB plan (assume the waiver is legal and valid). In exchange for the waiver, the plan sponsor will forgive the (new) employee's debt to the plan sponsor.

Is that a CODA? Are there PT issues? Do you see any other issues?

I posted this on the QDRO board, but thought I'd try my luck here as well---

The 401(k) plan of a Native American tribe has received an order from a tribal court dividing a participant's interest in the plan. The QDRO rules require that an order be issued pursuant to state law, but the order sent to the tribal plan was issued pursuant to tribal law. Will the plan violate the anti-alienation rule of the Code and ERISA (assuming it applies) if it recognizes the alternate payee's interest under the order?

Our Company is introducing a HDHP with HSA for the first time effective 1/1/2007. Since we already have Health FSA's (not limited scope) with a grace period to 3/15, it is our understanding that employees cannot participate in an HSA until 4/1/2007, irregardless of whether they have remaining funds in their 2006 FSA account. We are getting differing opinions as to whether a person can enroll in an HSA effective 1/1/07 if he was enrolled in an FSA in 2006 in a plan with a grace period. Due to the conflicting opinions, we have decided not to begin pretax payroll deductions until 4/1/07 (month following the grace period); however employees want to know if they can open their HSA with the custodian and send a check for the three months where we will not take payroll deductions. I would like some feedback from others regarding your understanding.

Thank you.

ok - I know this one has been discussed before, but I still have trouble when I search for things...

Client has a 401(k) PS plan, PS assets are in pooled funds, 401(k) was recently moved to individual accts. Distribution fee is charged to participant prior to payout per plan, some participants have 401(k) assets but no PS balance and some have small PS balances due to forfeiture reallocation.

How do you handle participants with small balances that are less than the distribution fee? Client does not want to pay fee from Company.

Suggestions?

Has anyone seen any unofficial estimates on the COLA amounts for 2007 applicable to qualified plans, 403(b)s and 457(b)s? I have seen unofficial estimates for the tax brackets, HSA amounts, and transportation fringes as well as the new IRA COLAs.

Plan sponsor wants to start safe harbor auto enroll, effective 1/1/08. Match will therefore be 100% on first 1% deferred, and 50% on the next 5% deferred. Current company match is 50% on first 6% deferred. Since the auto enroll match would be better than the existing match, it's a no-brainer then, that the company match must be amended to be in line with the auto enroll match. Correct?

On the other hand, if the current match was better than the auto enroll match, would anyone try to keep the 2 match formulas? One for auto enroll, one for everyone else?

We have a participant who left for military service earlier this year. We were contacted by his wife recently (on an unrelated matter) and she mentioned that he will probably want to make up missed deferrals for the time he was on military leave. My question is this:

Is there any requirement that the participant was actually contributing to the plan immediately prior to military leave or is the fact that they were eligible the only factor?

He wasn’t contributing for sometime prior to military leave but when comes back, wants to possibly make-up missed contributions for time he was on military leave.

Thanks,

Fred

Employer is going out of business--not because of bankruptcy, but because it's the "stump" of a much larger entity, most of which was sold. Employer is "whatever was left" after the sale, including several large benefit plans. Several of Employ'ers subsidiaries (the "Subs") will continue as independent entities after Employer fades away. Employer's 403(b) plan is saddled with numerous TDAs from previous incarnations, with account balances for (1) its own active employees, (2) the Subs' employees, and (3) inactive employees who went with the assets that have been sold.

Employer needs to terminate its plans before it ceases to exist. It will spin off to new plans sponsored by the Subs the assets in the 403(b) plan attributable to the Subs' employees. It can deal with its own employees directly. But it's stuck with the inactives. One idea that's been floated is to "force" the money out of the plan through an employer-initiated 90-24 transfer to some acceptable vehicle. I haven't been able to find any discussion of such a transfer (presumably because RR 90-24 is only concerned with employee-initiated transfers). (I do know that the proposed regs, once finalized, would not permit such a transfer because it would not be made to a plan of the participants' current employer.)

Anybody heard of such an animal?

Thanks.

Two questions on a cash balance termination:

1) What are the rules for the payment of interest on cash balance accounts after the date of plan termination. My understanding is that so long as plan assets are distributed with no more than a reasonable administrative delay then no interest need be paid but is it permissible to pay interest after the date of plan termination until the date of distribution? Also, does this rule also apply to employee after-tax accounts within a cash balance plan?

2) Is it acceptable to calculate benefits as of the date of distribution rather than the date of plan termination (assuming the benefit payable at date of distribution exceeds the benefit calculated as of the date of plan termination)?

Is a 401k plan sponsor in compliance with Sec. 404© if they allow participants to choose self-directed brokerage accounts outside of the investments being offered by the plan? Is an indemnification clause valid if added to a participant enrollment form if a participant so elects to invest outside of the investments choosen by the Trustees?

We have third party running our Simple IRA plan. In the past, the plan was not offered to all employees. I understand that it should have been and we will do this going forward. I read the FAQ's on the IRS website, and it seems to me that if go forward with the simple plan, we are required to make a contribution on employees' behalf. Either match up to 3% or just do 2%. Our Simple plan administrator says that making a 0 contribution would be okay, and I don't see where that's an option. If we offer the match, and the employees do not make contributions, is that where we could get away with making a 0 contribution?

If a plan terminates in 2005, but the assets are not entirely distributed until 2006 or later, is the Final 401(k)/401(m) Regulations Amendment needed?

I have a client who was widowed in late 2003 and has not yet filed his tax returns for either 2004 or 2005. In 2004 his employer contributed $30K (F in box 12-a of W-2) on $73K of wages, exceeding the 25% contribution allowance. In addition, the taxpayer contributed $19K to a SEP in 2004 despite having no self-employment income unless you can count the following: he inherited a $93K tax-sheltered annuity from his late wife and his financial advisor had no suggestions other than to cash it (which he did).

I see nothing that I can do except to advise him to take out all of these contributions except 25% of $73K and pay the excise tax. Any suggestions? Any possible way that his situation might be helped by the fact that he has yet to file his 2004 return? If the $19K turns out to have been contributed in 2005 for 2004 can it be attributed to 2005 (a year in which he has lots of self-employment income)?

Thanks.

Trustee/100% owner/participant wants to take $100K from his plan and either invest it in or lend it to a partnership/joint venture in which he will have a 30% interest. At first I thought he would be a disqualified person but after reading IRC sec. 4975, it seems OK as long as he owns less than 50% of the joint venture and the money is given to the business entity (and less than 50% of the joint venture is owned by the trustee's relatives or anyone providing services to the plan). Am I reading this correctly or would this be a prohibited transaction? Thanks for all help.

I have an electrical union who has multiple collectively bargained agreements with various employers. The benefit currently is 7% of pay. The union leader wants to amend the plan to cover some of the other members who are under a different agreement, the benefit which is up to 3.25/hour depending on the members direction.

My question: Can this plan have two different allocation formulas or do they need another document?

Thanks,

Laura

I had a client's CPA ask a question about "Dolgoff Plans", which he said were copywrited retirement plans, similar to a DB plan, which were designed in the '70's and '80's.

Anyone know anything about these plans?