Can Section 127 education assistance programs exclude part-time employees? Assume the plan satisfies all of the other statutory and regulatory requirements. I would appreciate any thoughts.

I recently went to a financial advisor. He introduced a concept to me that is new and I want to run it by you guys and gals. Here's what he said I can do to build wealth.

1. Start a corporation or LLC

2. Fund a Roth

3. Have the Roth buy 100% of the shares in the corporation

4. start a business or buy a piece of real estate with the money from the Roth that is now in the corporation

5. profits from the business or gains from the real estate transaction can be distributed to the Roth because it's a 100% shareholder...and no taxes will be due on the gains as the Roth allows for gains in an investment ...TAX FREE.

Is this legal as long as I personally don't take a distribution?

Comp. A & Comp. B co-sponsor a 401k plan. Comp. A stock is sold to Mega-Comp. C on 4/1/06.

Comp. A's Board, on 3/31/06, passed a resolution saying, "the Company will cease to be a participating "Employer" in the Plan effective as of the close of business on March 31, 2006".

I don't think that created a "distributable event" for the employees of Comp. A because it was not "termination of the plan" before the sale.

Am I correct? Or would this allow for distribution of 401k money for employees of Comp. A now working for Mega-Comp. C?

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I think that to allow for distributions they would have had to spin off one of the companies (A or B) from the A+B Plan and then A could have terminated pre-sale, thus allowing for distribution of assets. Without the spin-off, if plan terminated and distributed $, Comp B. would not be allowed to have a plan for a year.

Right?

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Is there any issue with a Trustee-to-Trustee transfer of the money from the A+B plan to the Mega-Co Plan now that Comp A is not a participating employer in the A+B Plan? (Although I don't know where else the money can go.)

Thanks

I have a DB plan that was recently restated. Under the old plan, a married participant could designate a non-spouse for his or her survivor benefit at any time (while an employee, terminated vested, or retiree), assuming appropriate spousal consent, etc. When the plan was restated, the company decided that it would let employees and retirees continue to designate non-spouses to receive the benefit, but that terminated vested participants would be restricted to having the benefit paid to the spouse.

My question is whether this elimination of the ability to designate a non-spouse beneficiary for the survivor benefit has run afoul of the protected benefit rules under 411(d)(6)? Do we need to protect the ability for the term. vested to designate a non-spouse generally, to preserve the right merely for the benefit accrued before restatement, or does it not matter at all?

Any thoughts would be greatly appreciated.

It's been a while since I have had this question and I can not find exactly what I am looking for.

I have a 2 person PSP and the two people are the owner and his wife. Is a surety bond required in this case?

Takeover safe harbor 401k plan form Citistreet has no named trustee in document. Assets invested in Travellers (group annuity). Form 5500 marks insurance but not trust and sch P has never been filed. Citistreet syas that since assets invested in insurance this is correct. Does anyone have a point of reference for this approach?

Do both of the House and Senate bills contain provisions to eliminated the whipsaw issue with cash-balance plans ?

Person dies with an IRA and some bills to pay (payments to friends, credit cards). IRA bene is the daughter. Will the daughter need to pay those bills from the IRA? How does payment of bills usually work when a person dies without money other than an IRA in which a beneficiary is named?

Plan A is an ESOP. Pursuant to § 401(a)(28), assets derived from a "qualified participant's" diversification of employer stock is distributable immediately, i.e., in-service, but remain subject to the § 72(t) 10% tax on early distributions for participants under 59½. For administrative reasons (namely, because of its contract with Plan A's custodian), Employer wants to handle all Plan A distributions by first transfering the assets to Plan B (its 401(k) plan), then distributing them from Plan B. I see no problem with that when the event is a distributable event under both Plans, but can Plan B provide for an immediate in-service distribution of amounts that were distributable only because of the ESOP rules applicable to Plan A? As I read the in-service distriubution restrictions under § 401(k), they apply only to elective deferrals. So, the general question is, does the "distributableness" of the diversification proceeds continue to apply to the assets post-transfer? Here's an example:

Participant is age 55. She diversifies her Employer stock. The proceeds are immediately distributable, and she wants to roll them over to an IRA, despite the 10% penalty. Can Employer accomplish the rollover by transfering the proceeds from Plan A to Plan B and then rolling them over from Plan B to the IRA?

Thanks for any ideas.

Is it possible to have a loan in a qualified plan that pre-dates the requirement for level amortization? Say, an interest-only home loan? If so, what year did that requirement come into being?

Thanks.

EGTRRA allows plans to exclude rollovers in determining whether the participant's account balance is $5,000 or lower. However, Notice 2001-57 (which provided model EGTTRA amendments) says that this provision can only be used for plans not subject to the QJSA rules.

Does anyone understand the IRS's position on this?

I have questions regarding testing age in the following scenarios:

Employer has 3 plans - 401k, defined benefit and cash balance. The NRA is 65 for the defined benefit and 65 and 5 years of participation for the cash balance (don't ask why they would do something like this but they have). This has caused the owner to have a retirement age of 66 in the cash balance plan. Both of the retirement ages are uniform. The profit sharing has a NRA of 65.

The calculation of the gateway requires the use of testing age in the present value. Does this mean that the accrued benefit of the defined benefit must be adjusted to age 66 before calculating the present value so both DB plans have the same testing age?? (This would appear to satisfy the second definition of testing age)

IF the 401k plan did not exist, would the same adjustment have to be made in calculating the EBARs for nondiscrimination purposes??

A similar situation is where the employer has 2 plans - 401k and cash balance. The plans were drafted so that the NRA in the 401k is 65 but the NRA in the cash balance is 66 for the owner. Do the regulations require the EBAR of the DC to be projected to 66 so that the testing age is the same??

Regulation 1.401(a)(4)-9 appears to allow the DB plans to be treated as a 'plan' and the DC plans to be treated as a 'plan' BUT the question is whether testing age can be different and are adjustments required.

Thanks in advance for any and all comments.

Scenario: In 2005, DB plan buys group annuity contract to purchase half of its liabilities. All deferred benefits. In 2006, there is no activity (i.e., premium paid, benefits paid, etc) with respect to the contract. I think Sch. A information needs to be provided for both years regardless of activity as long as benefits are funded with the contract. Another opinion expressed by another party states that only 2005 requires Sch. A information because that is the year contract was purchased and no information needs to be reported for 2006 because no activity took place. Which position is correct?

We have people who are currently enrolled in the FSA which is on a calendar year.

We recently added an HDHP w/HSA effective 7/1. If someone is now joining an HDHP and wants to put money into a Health Savings Account -- can they do both? My quandary is that they elected the Flex for the full year and that plan has not been discontinued. However, having a new health plan altogether seems to me to constitute a qualifying event that would allow them to stop flex contributions.

Thanks

sorry, I didn't have time to set up a 'type in your guess' and see if it is correct.

here are 36 movies to 'ruin' your weekend, trying to figure out.

these are the last scenes - so no missing bodies or anything like that.

as usual, I never even heard of many of them, and I think there is a cartoon or 2 or 3 and so old black and whites.

good luck

I am in my 20's and have had a Roth IRA for several years. The first few years I put a little into the Roth whenever I could. It was never much...maybe $3000 total. Then, when I went to seminary, I really needed some money to pay for living expenses and I withdrew all but about $40. Now I'm out of school, and I want to start contributing again. My account is still active....there's just nothing in it.

Here's my question. If I contribute now to my Roth IRA, will my future contributions be affected in any way by my previous early withdrawal? Will there be any sort of tax penalty when I'm older and start withdrawing? I did list the early withdrawal on my taxes, but since I had so little in my account it didn't cost me much at that point.

Thanks for any advice you might have!

The particulars are that a client of ours has their daughter buying into their business (more than 5% stock purchase). She is married to her partner under Mass Law, who will also be working for the business. Remember from an '04 EA meeting session (from the mouth of Jimmy Holland no less) that under Federal law, same-sex marriages are not recognized.

Questions abound in our state (and no, I don't want to get into any discussion of pros-cons of same-sex marriage, just want some answers to pension questions).

5% Owner attribution: if not "married" under Federal law, then IRC 318 attribution shouldn't apply to the partner - so not an HCE by stock attribution. Yes or no? This is a 401(k) plan and ADP testing is an issue.

Many other questions abound (beneficiaries, etc. and the quirk in MA law that contributions for "owners" aren't deductible on the State corporate return - would MA have differing attribution than the Feds), but this is the first thing that comes to mind.

Any others out there had to think this one out?

Does anyone know if your name on the enrollment form must match your social security card? We've recently had a few women get married and I wondered if they must complete a name change form.

I have a client that wants to provide that payment under a 457(f) plan will be made within one year of termination of employment provided the employee has not violated the noncompete clause in the employee's employment agreement during that time. I don't think that is permissible under 409A. Does anyone think it can be done, and if so, how? Thank you.

I have a client that wants to provide that payment under a 457(f) plan will be made within one year of termination of employment provided the employee has not violated the noncompete clause in the employee's employment agreement during that time. I don't think that is permissible under 409A. Does anyone think it can be done, and if so, how? Thank you.