Plan has a discretionary matching contribution feature with no end of year requirement. Company intends to match 100% of first 3% of contributions and fund the match on a payroll by payroll basis. Aside from a PR standpoint is there any notice requirement if they decide to raise or lower that match during the year?

Looking for some feedback on how you handle this question:

Item # 7h: Number of participants that terminated employment during the plan year with accrued benefits that were less than 100% vested.

Do you include participants in this item solely on the basis of whether they are less than 100% vested or do you also take into account whether they actually have a non-zero accrued benefit (account balance)?

Example # 1: Participant in profit sharing plan is 0% vested but has a zero account balance due to the fact that he entered the plan but never received an allocation of employer contribution or forfeitures. Should he be included in item # 7h?

Example # 2: Participant in 401(k) Plan has account balance attributable to salary deferrals (100% vested) but has no account balance attributable to employer contributions/forfeitures (20% vested). Should he be included in item # 7h?

Thanks for your thoughts!

Hello everyone,

I'm in the position of filing for the first time form 5500-EZ for my one-participant

plan. The plan is hosted at Charles Schwab based on their prototypes; its history

is that it started as a Keogh, was restated (GUST-converted) to a QRP, and then

restated again as a Solo 401(k).

My questions are very basic:

Line 2(b) and 3(b), employer EIN and plan administrator EIN

-- is it okay that these be the same number (the EIN I've

always associated with this plan, since it was a Keogh)? Or

does a plan administrator need to have a separate EIN?

Line 6 -- is "profit sharing plan" correct? It seems more

applicable than ESOP, money-purchase plan, or stock bonus

plan.

Line 10b -- "Enter the total cash contributions received by

the plan during the year and the contributions owed to the

plan at the end of the plan year". I made part of my 2005

contribution in 2005, and part in 2006. Do I include only

the first part, or both?

Thanks much,

Steve

A taxpayer, for both 2004 and 2005, made a Roth IRA contribution. In getting ready to prepare the 2004 and 2005 Form 1040 for the taxpayer (yes, the 2004 return has not been filed), it was discovered that the AGI for the taxpayer is over $160,000 for both years. The taxpayer could have made a deductible IRA contribution, as there is no active retirement plan participation.

The question is whether the taxpayer could instruct the IRA custodian to reclassify the contributions into a traditional IRA account, and then take the IRA deduction on both the 2004 and 2005 return. I have never heard of this occurence, and wonder if anybody has an opinion. Thanks for any replies.

A client which files a 5500 for their welfare plan also owns two subsidiaries. Their question was whether or not the two subsidiaries were subject to the 5500's filing for their welfare plan. Since they are a part of a controlled group, I'm inclined to say "yes." Since they would be considered a "single-employer" for filing purposes. However, both subsidiaries have less than 100 participants and is an unfunded & fully insured plan. Which falls into the exempt status for the 5500's filing requirement. Does being a part of a "single-employer" plan that is currently filing a 5500 for their welfare plan supercede the "exempt" status?

I was at lunch on Sunday and someone who never wroked in the USA said she was waiting to get her SS benefit. I questioned if she would be entitled since she never worked in the USA.

However, someone at the table affirmed that she would be entitled to a $3,000.00 benefit. Is this true?

I have a client, Company X, that has a DB Plan covering the Mother who owns 99% of the stock, the Son who owns 1%, and a rank and file employee. At the end of 2005, the rank and file employee terminated and was fully paid out.

I know that PBGC regs do not attribute stock from Mother to Son so normally this plan would remain covered under PBGC in 2006. However, if the Mother and Son have other companies that form a controlled or affiliated group with the Company X though these other companies are not part of the DB Plan , and if the Son owns more than 10% of one of these other companies, would he be considered a "substantial owner" for purposes of PBGC coverage of Company X?

I have a DB plan we are planning on terminating and amending to allow for a lump sum payment option.

Plan has a COLA feature on retirement annuity which is eventually capped after so many years.

Does one need to factor in the COLA adjustment in valuing the lump sum? Or can one just take the present value of the monthyl accrued benefit at NRA?

Thanks

Alexa

My firm wants to change from a 401-k plan to an SEP because of massive downsizing. The 401-k admin says that since the plan was funded in january and february of this year <2006> it can't be cancelled. I am trying to confirm this as it doesn't make sense to me. I want to know if the plan can be cancelled and if a SEP can be funded by april 2007 with allowable contributions, and also if there are terms or conditions I should know about concerning rolling the 401-k's into seperate SEP's. thanks.

Employer currently sponsors group health care for its employees. Employer would like to drop the coverage and proposes to contribute, say $500, to a cafeteria plan account or a health FSA for each employee. The Employer's idea is that the employee would then be free to take the cash and purchase health insurance on his or her own. Does this work? What are the potential pitfalls?

I'm not sure a health FSA will work here since a health FSA may not treat participants' premium payments for other health coverage as reimbursable expenses. And that's what the employer appears to be proposing here.

I have come across my first non-QDRO request. A couple was divorced in 1994 and in the divorce decree it stated that the wife was due 1/2 the current value (6/1994) of her husband's pension and 401(k) at the point he reached retired or terminated service. No QDRO is on record. The ex is now looking for her money as the husband is leaving the job at age 45.

What must happen to do this? How about the 401(k) money that is still in the husband's account?

Can a Plan Administrator be required by the Court/District Attorney to make a distriution to an ex-spouse for past due child suppot payments from the vested account balance of a plan participant? Is the answer the same if the plan participant is an active employee or terminated employee? If yes, to all, can future distributions be requested (frequency?) if defaults continue?

Thanks for any insight on this issue!

We have a volime submitter plan whose adopting employers failed to adopt EGTRRA good-faith amendments by 9/30/03. In addition, the plan sponsor didn't submit the speciman document for an advisory opinion by 1/31/06.

I'm confused as to the relief available for "Group Submissions" under Rev. Proc. 2006-27. I understand that VCP is available for the vS sponsor. But does a compliance statement provide relief for the adopting employers as well so that an adopting employer isn't required to take independent action?

If not, what actions (under the Rev. Proc. or otherwise) are available for the adopting employers?

Thank you.

I recently left an employer and need to either rollover my funds (which are a relatively small amount) to my Roth IRA, new employers IRA, or cash it out.

I would like to put it in my Roth. With that said, do I need to cash it out first (to pay the taxes) then put it in the Roth? Or, could I "roll it over" to the Roth while still paying the taxes on it, but without any extra "cash out" penalty fees?

Any help would be greatly appreciated.....thanks in advance!

Say a self-employed individual files a Schedule C on his 1040 and sponsors a DBPP.

We know that the salaries and pension expense for his employees (not counting the owner/employee) are deductions on the Schedule C and the remaining net earned income flows to the 1040 and then any pension deduction for the owner/employee is taken from the earned income that flowed through to the 1040 and shows as a qualified plan deduction on his 1040 on behalf of himself.

The questions is, can his spouse in this case be considered a Schedule C employee where her salary and pension contribution is a deduction on the Schedule C or does she have to have her pension deduction from the earned income that flowed through to the owner(and spouse)/employee's 1040?

Thanks.

Employer with a 401(k) plan began providing a mathcing contribution Jan 1 this year, maximum match equals 3% of compensation. At the same time he reduced the contributions in his Section 125 plan by 3%. Predictably, the employees complained.

His "solution" was to provide the reduced 125 benefit to everybody, with an extra 3% going to those who don't defer into the 401(k) and thus receive no match; lesser extra amounts to those who receive a match that's less than the maximum. Essentially, the more an employee defers to the 401(k) plan, the less of the extra 3% he receives in the Section 125 plan. This seems to be a clear violation of the contingent benefit rule in section 401(k)(4)(a). But what would be the least painful yet appropriate correction?

this file is a excel file containing 8 movies to identify based on the 'invisible' people. earlier today I tried this attachment and it failed. if I have managed to do things correctly, you type in the name of the movie in the yellow box and find out if you are correct or not. I think I have locked things up enough that you cant cheat.

this is a test to see if Dave has fixed the problem of attaching .rpt files for me.

this is the genereal nondiscrimination overall report (landscape)

can not be used from custom, so this would have to over-write the relius version.

this modification will tell you how many NHCEs are needed if a rate group fails.

It also indicates the NHCE concentration %, and the midpoint needed

Sponsor has four DB plans: 3 frozen union plans and one active non union plan with no HCEs (hourly only).

Sponsor wishes to consider merging them as a cost cutting move. The plans have the same major provisions (NRA, normal form, optional form, death benefit). Three are funded about 75-80% on CL basis (pre-2006 rates), one is funded at 92%. All are well over 100 participants.

None of the plans are funded on "termination basis" using lump sum methodology or on an annuity basis using any realistic discount rate, which seems to require mainenance of termination priority classification data, whatever that might entail.

Are there any major pitfalls to merging plans in this situation?

Is the termination priority data maintenance problematic?

I can see possible shifts in 412(l) levels being a possible issue. Others?

ok, Identify the Movie/TV show and the character. you TV land and Nick at Nighters should be able to do this one.

well, I was going to do another invisible movie character puzzle, and I have it pasted into an excel sheet so you can type in the movie name and see if you are correct. however, for whatever reason you can't attach excel files at the moment. but the Bakerman is working on it!

besides, looks like there are still a few answers left to go on the other quizez.

1. Big screen: Raul Julia Small screen: John Astin

2. Big screen: Dan Aykroyd Small screen: Jack Webb

3. Big screen: Ben Stiller Small screen: Paul Michael Glaser

4. Big screen: Goldie Hawn Small screen: Lorna Patterson

5. Big screen: Christopher Lloyd Small screen: Ray Walston

6. Big screen: Jim Varney Small screen: Buddy Ebsen

7. Big screen: Claire Danes Small screen: Peggy Lipton

8. Big screen: Walter Matthau Small screen: Joseph Kearns

9. Big screen: Will Smith Small screen: Robert Conrad

10. Big screen: Jennifer Lopez Small screen: Carla Gugino

11. Big screen: Christopher Walken Small screen: Anthony Michael Hall

12. Big screen: Kristy Swanson Small screen: Sarah Michelle Gellar

13. Big screen: Eddie Murphy Small screen: Bill Cosby

14. Big screen: Shelley Long Small screen: Florence Henderson

15. Big screen: Jennifer Grey Small screen: Jennifer Aniston

16. Big screen: Colin Farrell Small screen: Robert Urich

17. Big screen: Elliott Gould Small screen: Wayne Rogers

18. Big screen: Nicole Kidman Small screen: Elizabeth Montgomery

19. Big screen: Janine Turner Small screen: Barbara Billingsley

20. Big screen: Harrison Ford Small screen: David Janssen

21. Big screen: Bill Murray Small screen: David Doyle

22. Big screen: Alicia Silverstone Small screen: Rachel Blanchard

23. Big screen: Walter Matthau Small screen: Jack Klugman

24. Big screen: Heather Graham Small screen: Marta Kristen