I am new to the world of IRAs. Is it possible to have more than one IRA account? Are the dollar contributions limited to $4,000 total in a given year or can one contribute $4,000 to each IRA account? Thank you in advance for your replies.

I understand that if an employee leaves with a negative balance in their Health FSA (i.e. has been reimbursed more than they have contributed), that is the employer's risk under the uniform coverage rule. However, the boss is insisting that we amend our plan to require employees to have this withheld from their final paycheck. The boss also wants to issue 1009s to employees who have left in this situation, for the amount they were "overpaid." I know none of this is allowed, but navigating the IRS site to find the actual documentation is a nightmare. Anyone have a link handy, or some good resources I can cite? Thanks!

I'm reviewing a proposal for a DB/DC combo for '06.

Client has a profit sharing plan and is thinking about adopting a DB relatively soon.

According to my understanding of PPA, any employER profit sharing contribution in excess of 6% of eligible payroll is not deductible.

Am I correct?

Thanks.

http://www.dol.gov/ebsa/calculator/main.html

http://askebsa.dol.gov/VFCPCalculator/WebCalculator.aspx

Just an FYI

I'm a lawyer so I should know the answer (HA!). I'm a litigator, smarter people tell me the answer usually, so here goes...

I was an employee of a law firm, let's call it Dingbat & Duffus, LLP. I leave the firm and elect into my COBRA coverage. I'm now 11 months into my 18 months of COBRA and the word on the street is that Dingbat & Duffus are splitting up. Each will go their separate ways, "splitting" employees, etc. Each will prbably take on new partners, becoming, separately Dingbat & Grumpus, and Duffus & Crimsonnape.

One of the two firms will probably keep the old office, the old health insurance policy, etc. I see two ways things will go down:

1) Dingbat & Grumpus "keep" the same plan that Dingbat & Duffus had. Can they "keep" the same plan, or is it a termination and a new plan? If so, do I keep my COBRA?

2) The two new firms drop their "old" plans and get entirely new plans. Am I out of luck for COBRA?

I think that a "plain look" test would show that one, or both, of the "new" spin-off firms are successor corporations.

I'm no COBRA guru. I promise to offer free litigation advice in return for any good advice here.

Thanks.

NC Lawyer

Any sample participant notices out there on default rollovers? Thanks.

What is your reading of PPA with respect to providing a diversification notice to participants -

If a plan already satisfies the diversification requirements, do you think PPA still requires that the plan provide participants the notice informing them of the new rules, i.e. essentially informing them of their rights to do what the plan already allows them to do?

A client wants to set different maximum contribution limits for employee contributions to a health FSA under section 125 based on length of service. The TPA has said that doing so would violate nondiscrimination under 105(h) based on Treas. Reg. 1.105-11©(3)(i), which says that any maximum contribution limits on employer contributions cannot be modified based on length of service, etc.

I'm fine with applying this to employer contributions, but these are employee contributions. The TPA takes the position that once the employee contributes to the section 125 plan, the money becomes an employer contribution. I disagree, but have nothing more solid to go on then my logic, which doesn't always line up with the IRS logic. The further problem is that I see this done on a semi-frequent basis and have never thought it would fail nondiscrimination. Has anyone seen anything to contradict (or support) what the TPA is saying?

I find that I am in need of the annual compensation limit and DB maximum annual benefit in effect for 1991 (how strange is that?)

As it happens I have the benefit limits from 1975 - 1989 (except 1987) and both from 1996 through today, but I was doing other things in the early 90s and didn't keep my list up to date.

Are there any other old timers around with those old numbers buried in some old file somewhere?

Let's say a DB plan terminates and the value of the plan's liabilities exceeds its assets by $200,000. Let's assume further that a majority owner is due a lump sum as a result of the plan's termination equal to $300,000. The Company doesn't want to or cannot contribute the extra $200,000 so the majority owner agrees to waive $200,000 of his benefit. The majority owner receives $100,000.

Under these circumstances, is the majority owner taxed on the entire amount of his benefit ($300,000) or just the portion of his benefit that he actually received ($100,000)? Does the plan issue a 1099-R for $300,000 or $100,000?

Is the answer different if, instead, the majority owner decided he didn't really need any of his benefit and (1) waived the $200,000 and (2) had the remaining $100,000 used to "gross-up" the distributions made to the other participants? In this case, does the plan even issue a 1099-R?

A CPA told me in passing that when an individual has a vested, legal right to income, they cannot avoid including that amount in their income simply by "turning their back on it". Of course, my response was that it really isn't income, is it, if they do "turn their back on it". The CPA's response was that I was thinking about actual, as opposed to constructive receipt.

Surely this is not a new "issue". How have others handled this sort of situation? Thanks!

This is probably something I should know.

A terminated vested participant who is married died at age 54. The plan document and Summary Plan Description only discuss death benefits for active participants who die. Is it true that a terminated vested's widow is also due a survivor benefit by law?

Does anyone have an updated Safe Harbor Notice?

Why am I so inept at searching this board for simple answers?

Can a participant make a Roth IRA contribution and also participate in a QP in the same year?

Thanks!

...are smelly.

Has anyone heard of a Change in Control Form 5500?

Am I correct in saying that a sole proprietor would need to apply for a Tax ID when establishing a 401(k)?

Dave

Are other TPA firms obtaining SAS 70 certification? What's the prevailing rationale for either foregoing the certification or obtaining it? Thanks!

Is it permissable to roll money from a simple 401(k) plan to a regular 401(k) plan

Has anyone else read this one? PPA establishes a 14 day self correction period for fixing sec 4975 PT. Does this mean if you correct late contributions within 14 days of finding the missed/late contributions you don't need to file 5330?

Any help appreciated. Reading this stuff makes my head hurt.

HI All,

Do I need any special certifications to file a VCP for a client who is a nonamender? I have the NIPA APA, is that sufficient?

THanks in advance