Does anyone know of any good articles or websites that address the use of NQDC for pass-through entities, such as LLCs, partnerships and S-Corps? I have already seen a few threads on this message board but I was looking for something with more detail. Thanks.

Assuming the horrible situation where a participant has invested her assets in investments that become totally worthless, how do you document the distribution when they terminate employment?

The plan does not provide for in-kind distributions, but we are conisdering it if that is the answer.

We need to document that the account is closed out somehow, but don't think a $0 value distribution notice and distribuiton request form works at all. We know that there could (will?) be litigation and am only focused on procedural prudence at this point.

We know that there is no rollover right for distributions below $200, so is that our "out" for not documenting a distribution?

I just read through the actual text (ok skimmed) of Section 903 of the PPA and didn't see the effective date for when we can combine the DB plan with a 401(k) feature. Has anyone seen that date yet? The summaries I have read all mention that you can do it but don't mention which plan year it becomes effective.

All of my plans are small. The frequency of the distributions from these plans are definately not yearly. Many of these plan sponsors (almost all of them actually) need their hands held when it comes to dotting the "i"s and crossing the "t"s. Making withholding payments is especially a problem. To make the process easier for me I was considering instructing them to establish an EFTPS account for their plan and simply transmitting the $ that way.

Am I a dinasaur.. has everyone already done this?

Is there any reason why this should not be the norm?

Thoughts?

Thanks!

If a participant has both Roth 401k deferral and pre-tax defferral and must take their RMD, how do you split the RMD between the Roth and the Pre-tax? Would it be pro-rate based on balance?

I'd love to form some sort of study group if possible? Or, if you're a prior test taker, any hints (or perhaps prior copies of the tests?) you have would be greatly appreciated. Unfortunately, I'm a DC girl so this test is looking mighty scary

Thanks!!!!

Vicki

I understand that for rule of parity purposes, if a participant makes a salary deferral to a plan that person is vested and the rule of party can't be used to forfeit vesting service, but I am unsure how the final regs changed things with regard to repayment upon rehire.

If participant has 10 dollars in a salary deferral account, and 85 dollars of nonvested money in the employer account, is the participant required to repay the 10 dollars in order to have the 85 dollars restored? Or does the plan deem the 85 dollars repaid upon rehire?

client wants to start a 401(k)/ps plan and encourage LT employment. Anything wrong with essentially front loading the contribution in year 1 with a 20% contribution and then having a 5 year cliff vesting on the money.

Following years would have deferrals and possibly a match so continuing ER contributions are going to occur. But there likely won't be additionally PS contributions.

In talking with the owner I quickly saw his thoughts on this...Reality says that these employees are not going to stay for the 5 years (construction industry and very young employees) and so the contribution essentially is going to the owner anyways as a forfeiture. He doesn't anticipate growing so any new employee wouldn't be eligible for the forfeiture. Basically raises his CY contribution to about 70k. Not to mention the tax savings of 25k.

Problems? If the people stay they get the dough...no different than any other plan. Owner claims he has no intent of running them off but even that seems like it's employment law isn't it?

I'm looking for a little guidance.

Here is the situation.

A client of ours had an old paired MP/PS Plan that he terminated in 2000 or 2001 can't remember exactly. All assets (so we thought) were paid out and a final 5500 was filed.

The plan had an LP that was valued at $0. The interest in the LP was never changed from the PS to the individual and now the LP has a value significatly greater than $0.

What do we do with this asset if the plan is no longer in existance?

Any help is appreciated.

Is an employer required to have a period of open enrollment when there is a rate increase in employee contributions toward the cost of health insurance?

the puzzle does not involve the missing movie people.

instead, this one is all about movies (27 in all) that have some scene with a doll (or more) involved.

well, ok, a couple are cartoons, maybe toys are a better description in some cases, etc.

hey I actually knew one of the movies this time.

oooops. #17 The title begins with 'The'. I forgot to put a space between the word 'The' and the next word in the title, so you might have the correct movie but since I messed up it might not say 'correct'

I am just wondering if my situtation is normal or even legal.

My company just moved from a profit sharing plan to a new 401K plan. They have taken money out of the last two checks (I am paid every other week) for the 401K but have not deposited any money into the 401k account. The first check to have funds taken out for the 401K was on July 30th. After I received the stub for that check I tried creating an online account to view my new account. I was not able to. When I inquired with our HR department I was told they were still finalizing the enrollment forms with the 401K company but they would look into it. I thought it was strange that the employees were not even enrolled yet but money was taken out of our checks. Later that week I was able to create an online login and view my account but there was a zero balance. I thought it may take some time for the money to be deposited so I waited until after the next check was issued, August 13th, to check the balance. When I found it was zero I again contacted our HR department. They said the person who was in charge of transferring the funds was on leave and her replacement did not have the authority to do the transfers. A higher up was getting involved and it should be taken care of by the end of the week. That was August 15th, and I still have a zero balance in the account. I have talked to a couple other employees and they also have a zero balance.

Is there a maximum time frame from when a company takes money out of your pay check until it gets deposited into your 401K account? It bothers me because the money that has been taken out so far is in limbo and I have no access to it. For all I know the company is making interest off all of the so called 401K contributions from all of the employees.

-Mike

401(k) Plan allows an employee to contribute a flat dollar amount or percentage each pay period. Employee A chooses a flat dollar amount of $100 per pay period. Employee only works a few hours one week and does not have $100 in compensation for the pay period. Should the employer:

1. withhold employee's entire pay other than applicable taxes owed; or

2. not withhold anything becuase employee does not have enough pay to cover his election; or

3. withhold nothing under #2 above and make up the difference on the employee's next pay period.

The prototype doc. does not address this specific issue other than to reference the plan administrator can allow for flat dollar contributions. Also, I could not find reference to it in the ERISA outline book nor when I searched this site.

Case.pdf

Cross tested plan

Defined benefit has an eligibility classification by job categories.

2004, 2005, 2006 Lab Assistant A is eligible for the defined benefit plan

2007 Lab Assistant A is not eligible for the defined benefit plan

Since Lab Assistant A is not eligible for the db plan in 2007 does that mean that they don’t receive any additional contributions and their accrued benefit is based on what they accrued for 2004-2006. The plan documents state yes.

However, they would participate in the 401(k) plan now and receive a lesser profit sharing contribution.

Is there some discrimination rules that would apply here? Such as once you're in the defined benefit plan you're stuck unless terminated from the company.

If an employee elects COBRA under her former employer's FSA and then begins employment with a new employer that also offers an FSA, is there anything in the FSA, COBRA or cafeteria plan rules that would make the employee ineligible to participate in the new employer's FSA (as a result of still being on COBRA from the old plan)?

Any guidance is much appreciated!

We have a 401(k)/PS plan. Although matching contributions are made quite often, PS contributions have never been made. Is this plan in violation of 1.401-1(b)(2) (substantial and recurring contribution requirement)?

Company A has 200 participants in 2005. They are required to be audited for 2005. They only have 15 of the 200 who actaully have money in the plan so they decide they don't want to pay for administrative fees and audit fees for a plan for which such a small number of employees contribute.

They cease accrual of benefits on the plan as of 11-01-2005.

They DON'T change the plan year.

They get the audit done for 2005.

The plan is completely paid out 08-01-2006 - so they have a 2006 plan year from 01-01-2006 to 08-31-2006.

My question - does ceasing accrual of benefits as of 11-01-2005 mean that the 185 participants who never contributed to the plan are NOT participants as of 01-01-2006? They no longer have the ability to benefit under the plan in 2006.

Would the participant count on line 6 of the final 5500 show only 15 or 200? This means the difference between and audit and no audit for 2006.

I'm just wondering what everyone is doing with these 412i plans in which the value of the contract is exceeding the 415 maximum lump sum payable. We are looking at the plans on an annual basis to ensure that the value of the contract won't exceed 415. If it appears that it will, we are advising the client to reduce their monthly benefit or considering termination of the plan prior to meeting the maximum lump sum.

Any other thoughts?

The initial plan year for this plan is short 5/1/2004 to 12/31/2004. A valuation date of 12/31/2004 was used in the first year. It is desirable to change the valuation date to 1/1 in 2005. Is this an automatic approval under 2000-40.

The question is whether or not the establishment of the funding method in the first year would start the clock on the 5 year waiting period to change the funding method. Or, do you ignore the first year of a plan for purposes of the 5 year period between funding method changes?