I am preparing a form 5500-EZ. I am confused as to how to answer line 3f which is a disclosure of loans (other than participant loans). Do corporate bonds or government bonds get disclosed here as well as traditional loans? I am confused because the directions state that "securities loans" are to be disclosed. Has anyone had any experience with this?

An ESOP for an S-Corporation has all of the match and profit sharing contribution tied up in employer stock. The plan has not been in existance for 10 years yet so they haven't encountered the diversification requirement yet. Deferral contributions are invested in mutual funds but participant have the ability to transfer a portion of their deferrals to ER stock once per year.

The plan sponsor is wondering if there is anything preventing them from allowing the participants to diversify their investments now? The document does not appear to address this question directly (Corbel ESOP Document). Is there anything restricting them from allowing diversification once a year. If they can allow this now, is there a percent of the participants account that it would be prudent to limit the diversification to?

Any thoughts would be appreciated.

Assume you have separate 401(k) plans for the same employer that each pass 410(b). What provisions of the Plans need to be the same? I can think of:

1) Availability of catch-up contributions

2) Limitation Year

3) Top-Paid group election

4) Calendar Year election

5) Testing methodology (current year or prior year) but only if you think you might need to aggregate the plans in the future.

Anything else that you can think of?

A plan offers employees $300 per month. They may use this towards benefits (insurance) or else they may use as deferrals. Is this okay?

When must an employer announce his intention to match employee contributions? Must he do this prior to the Plan year or can he wait until the plan year is over and then decide if wants to make matching contributions? The plan document states that employer contributions are discretionary.

In the past, if we had a plan that needed to file a Schedule P, and it didn't have a Trust Identification Number, I'd add a comment to the cover letter stating that the Trust needs it's own number that is independent of the sponsor's EIN.

So, next year, when the P is no longer needed what do I do? I'd have no idea whether or not they have a TIN. And what else would the TIN be for?

I am trying to find the answer to the following scenario:

A company has both a 401(k) and and ESOP with plan years ended 12/31/05 and 6/30/06, respectively. How do I determine the Defined Contribution Plan contribution limit that each particpant must abide by? I am trying to make sure that no participant exceeds his or her contribution limit, but am unsure on what to base my limits on.

Thanks!

In an effort to increase my Funded Current Liability Percentage as of 1/1/2006, I'd like to use a 2006 quarterly payment made on 7/21/2006 as a 2005 contribution.

Question : Can the resulting Credit Balance be used to cover the 2nd quarterly due on 7/15 - with an appropriate late or penalty interest calculation - or does the Credit Balance have to be effectively created on or before 7/15 ??

I found several threads on these boards discussing the question of how to deal with outstanding 401(k) plan loans when the participant dies prior to full repayment, but none of them seem to come to a conclusion I'm comfortable with. The issue doesn't seem to be addressed at all in Treas. Reg. 1.72(p)-1 which deals with loans treated as distributions and I haven't found another good source of authority.

Here's the situation. Participant has $100,000 in his 401(k) plan. He takes out a loan for $10,000, the repayment of which he defaults on. Then he dies. The IRS has not yet taken any lien/levy type enforcement action. The plan says they will send a 1099 to the estate, but the estate is insolvent (there's not even enough to pay for administration expenses, so the IRS won't get anything out of the estate. I want to tell the non-spouse beneficiary that she can take the the remaining balance of the 401(k) plan without worrying about the IRS holding her liable for the participant's debt and penalties/interest on that debt.

Does anyone have any thoughts on where I can find authority for this question? Any insight would be a great help. Thanks!

Does anyone know of any authority making it permissible to merge a subsidiary's 403(b) plan (it is a 403(b)(7) custodial account) into the parent corporation's 403(b) Plan? We would like to be able to keep all the money in the same pot when the subsidiary's plan is discontinued. Thanks!!

I understand that the FSA component of a cafeteria plan is an underlying benefit subject to form 5500 filing if there are over "100" particapants. My question is what defines a participant. Suppose you have a Cafeteria plan with an FSA and of the employees, 70 are pop only, and 50 are pop & FSA. That's 120 total employees in the plan, but in actuality, only 50 are participating in the FSA component. So for filing purposes would this group only have 50 participants or 120 participants?

Thanks

Wisln

I found several threads on these boards discussing the question of how to deal with outstanding plan loans when the participant dies prior to full repayment, but none of them seem to come to a conclusion I'm comfortable with. The issue doesn't seem to be addressed at all in Treas. Reg. 1.72(p)-1 which deals with loans treated as distributions and I haven't found another good source of authority.

Here's the situation. Participant has $100,000 in his 401(k) plan. He takes out a loan for $10,000, the repayment of which he defaults on. Then he dies. The IRS has not yet taken any lien/levy type enforcement action. The plan says they will send a 1099 to the estate, but the estate is insolvent (there's not even enough to pay for administration expenses, so the IRS won't get anything out of the estate. I want to tell the non-spouse beneficiary that she can take the the remaining balance of the 401(k) plan without worrying about the IRS holding her liable for the participant's debt and penalties/interest on that debt.

Does anyone have any thoughts on where I can find authority for this question? Any insight would be a great help. Thanks!

Is spousal consent required for a participant to take a loan on his company's 401(K) plan?

Per the IRS form 5304 form, compensation is defined as ..."the sum of wages, tips, and other compensation from the employer, subject to federal income tax withholding (as described in section 6051(a)(3))...including salary reduction contribution under this plan..."

Does this mean that eligible compensation should be reduced by anything paid thru the section 125 plan? For example, if an individual earns $30,000/year and contributes $2,000 to an FSA account and $1,000 to the SIMPLE IRA, should that individual base their match on $28,000 (and thus match $840, instead of $900)? Any help is appreciated.

I posted this in the Form 5500 board and didn't get any responses. Maybe I can get some help here!

When filing a schedule A for a welfare plan, I have always reported the insurance carrier. I just received schedule A information where the TPA is listed instead of the ins. carrier. I have never seen this before. Has anyone else?

I called the TPA and all the person could tell me was that it is their name on the schedule a because the premiums are paid to them and they process the claims.

Anyone else have an opinion on this?

Thanks in advance for any help.

Is a SEP treated just like any other DC plan for purposes of satisfying the TH minimum allocation?

I have a potential client with a SEP that they've already made a significant contribution to (for this question, let's assume all participants got at least a 5% allocation). They want to put in a DB plan to supplement with the idea of phasing out the SEP and going with a large DB in future years.

In order to fit the combined deduction limit, my DB benefit has to be less than 2%. Am I allowed to say that the SEP is covering the Top Heavy Minimum? I see a lot of things talking about the defined contribution plan, but since this is a SEP, I don't know if that's included.

Thanks!

Those of us that work on 401k plans know all to well the requirements for remiting participant contributions to the plan on a timely basis. I have now incounterd my first DB plan with mandatory employee/participant contributions and want to know if the same rules govern remitance to these funds. Specifically, if the employer/sponsor withholds the employee/participant contribution on a per pay period basis (bi-weekely) can they elect to remit/transger these funds to the plan once a quarter? Is there any guidane on the timing of the remitance for these funds?

Thanks!

-Jimmy

A severance agreement provides that if the employee terminates for "good reason" or is terminated not "for cause," the employee will receive 5 months salary and benefits (insurance, 401(k)). The salary and benefits will be paid in accordance with the company's regular payroll practice.

Since the employee can terminate for good reason, I understand that the 2 1/2 month and severance options aren't available. Do payments that are made in accordance with regular payroll practice qualify as fixed payment dates for purposes of 409A? If not, how do you structure arrangements like this because it is very possible the payments can fall over 2 years?

Does a required minimum distribution from a SARSEP (for the 100% owner of a business who also has "regular" deductible IRAs) follow the IRA rules (i.e., can calcuate RMD required for each IRA and take distribuion from only one IRA) or the QRP rules (ie., RMD must be made from each such plan)?

Thanks!

Let me set up the scenario...

The participant was over 70½, was receiving RMD's. He passed away. He has no wife, and has listed 10 beneficiaries (i.e., nephews and neices, and friends).

Some beneficiaries have requested a rollover to a qualified plan, some have requested to be paid over a 5 year period, and some a lump sum.

The lump sum is simple enough.

The rollover to a qualified plan - it is my understanding that only a spouse can rollover death benefits...?

And I am unsure of the paid over 5-year period.

Could someone please clarify that only a spouse can rollover death benefits, and whether a beneficiary can receive payments over a 5-year period.

Thank you so much!