401(k) Plan has a discretionary match that is determined after close of the year. Data is provided for testing after March 15th deadline, so test failure results in both corrective distributions and Form 5330 Penalty Tax. Distributions are made and Form 5330 is filed. Following that time, Employer then decides to change match to a lower rate. Testing on new rate has smaller corrective distributions, and smaller penalty tax. Anybody have thoughts on this scenerio?

401(k) plan currently has no hours requirement and no last day of employment requirement for participants to share in the profit sharing contribution. The employer is looking to change this to 1000 hours/last day required to share in the contribution. For participants already in the plan, this would not be allowable, but what about for new participants, scheduled to enter the plan on 7/1/06. Could the plan be amended before then and applied to any new participants entering the plan after the amendment date?

Sponsor has 2 separate 401(k) plans, covering 2 separate groups of employees. In the past, we have aggregated the plans and tested them together for ADP/ACP testing, and they have passed. 2005 was a close call and its likely 2006 will not pass. However, our initial analysis is that if the plans are tested separately (disaggregated), they both would pass ADP/ACP. Of course they would have to also pass 410(b) via disaggregation.

The question though, is whether changing from aggregated to disaggregated for testing is a document issue? Does that need to be spelled out in the document, or can we make the switch without any amendments, notices or such?

Can the assets in an uncashed/stale-dated check be returned to Trust assets, or is the amount of the distribution deemed never removed from the Trust until the check has been cashed? I seem to remember reading that distributions, once checks have been drawn, are deemed to no longer be Trust assets and can't be returned to Trust Assets....am I mistaken?

Also, if I am mistaken and uncashed checks are assumed to NOT have left Trust assets, are the funds still considered pre-tax?

Is there anyone who can shed some light on this for me? Thank you.

Is a "concierge" MD "membership" reimbursable? The one I looked up, MDVIP, says that it is but I wanted to check and see if anyone else out there has allowed it or had additional info on why/why not. Thanks!

MissChele

A defined benefit plan has never made benefit distributions to any participant yet. The plan has only existed for four years.

The document currently indicates that the present value of accrued benefits shall be paid as soon as administratively feasible after a participant terminates employment. The plan sponsor wishes to amend the plan to pay benefits as soon as administratively feasible after the end of the plan year during which employment termination occurs. Can this be done or would this be considered the elimination of an optional form of benefit due to the change in timing?

If it can be done, would a 204(h) notice be required?

Thanks much.

I'm having a brain spasm. Is the 100% of compensation limit reduced for years of service less than 10 or is it reduced for years of participation less that 10?

Can anyone tell me where I can find information regarding specific requirments for retaining information pertaining to a Flexible Spending Account or a Premium Only Plan (i.e. Claim information, compliance testing, etc.). Any help would be appreciated.

ah yes, just when you thought you could get something in the office done, after a search I have found another quiz for you. I of course fail because I am not much of a movie watcher. On the other hand, I also have the answers.

mean and nasty Tom at it again, forcing you to solve these things.

as usual, give someone a chance to solve some of these before posting answers!

Can you identify all 41 movies from the trailer (catch phrase) used to promote the film?

For example:

Clue: A long time ago in a galaxy far, far away...

Answer: Star Wars

Got it? Good!

#1: Protecting the earth from the scum of the universe

#2: A little pig goes a long way.

#3: An adventure 65 million years in the making

#4: The coast is toast

#5: They're here!

#6: In space no one can hear you scream

#7: It was the Delta's against the rules...the rules lost!

#8: The heat is on!

#9: Get ready for rush hour

#10: Rush hour may be over...forever.

#11: You will believe.

#12: His whole life was a million-to-one shot.

#13: It's the story of a man, a woman and a rabbit in a triangle of trouble.

#14: Where were you in '62?

#15: You'll believe a man can fly!

#16: We are not alone.

#17: Love means never having to say you're sorry.

#18: The night HE came home

#19: Never give a saga an even break!

#20: The ultimate trip

#21: What we've got here is a failure to communicate.

#22: You don't assign him to murder cases, you just turn him loose.

#23: You won't know the facts until you've seen the fiction.

#24: They're here to save the world.

#25: They'll never get caught. They're on a mission from God.

#26: In memory, love lives forever.

#27: Don't give away the ending - it's the only one we have!

#28: A nervous romance.

#29: They're young...they're in love...and they kill people.

#30: The journey is everything.

#31: She was the first.

#32: This is the weekend they didn't play golf.

#33: This is Benjamin. He's a little worried about his future.

#34: Every man dies, not every man really lives.

#35: It's the story of their lives.

#36: Not that it matters, but most of it is true.

#37: A brutal murder. A brilliant killer. A cop who can't resist the danger.

#38: All it takes is a little confidence!

#39: A guy without a conscience! A dame without a heart!

#40: A love caught in the fire of revolution.

#41: For three men the Civil War wasn't hell. It was practice!

We are trying to figure out how much time a qualified plan has to make a distribution once the participant has signed his election forms electing to commence his accrued benefit in the form of a lump sum.

Let's assume a participant signs his election forms on July, 15, 2006. By what date would the DB plan be required to make this payment to the participant?

Thanks in advance for your assistance.

Can a non-profit, non-church, non-government employer have more than one 457 top hat plan?

An employer sponsored a small (2 participants) 401k plan. Her therapy practice did not succeed, and she closed down in mid-2005. In 2006 she will be opening a new practice, same corporation, same tax id number. The old employee no longer works for her. Is there any concern to her using the same plan? Need we terminate for any reason the old plan and start anew?

Hi everyone,

Am I correct in thinking that any plans with a Safe Harbor contribution must default to current year testing for ADP/ACP? (note: I realize that you don't have to test for these plans except in cases where the safe harbor is not followed/deposited).

I have a colleague that says otherwise regarding this issue.

FYI, it's a prototype document, but I don't think that makes any difference.

Thanks!!!!

Vicki

If an employer makes employer contributions to a 457(b), does the amount of these contributions reduce the amount the employee is eligible to defer during the year?

Should there be any information in a Notice of Plan Benefits about relative values? My actuary boss has said there should be but I could not find documentation in the PBGC Standard Termination Filing Instructions. The notice will include both single life and 50% j&s options at normal retirement age and immediately. The Determination of Benefits will not be done until a later date, which would normally include the statement of relative values.

Apparently, if you are participating in CalSTRS as a FT teacher, this causes the deductible amount of your IRA to phase out as if your contributing to a ER sponsered plan like a 401k. Seems illogical when just contributing to Social Security does not have the same effect.

However, I cannot find it in writing at either IRS or CalSTRS websites/materials. Does anyone have a clue as to where it may be spelled out?

Steve

What if a plan was determined to be a Large Filing Plan beginning with 2004, and then again in 2005 it was filed as a Large Plan…however it was never caught by the TPA that a 2004 audit was required…can you skip the 2004 audit year and begin with the 2005 audit year? What are the consequences or suggestions for not auditing the 2004 plan year, but began with the 2005 plan year instead? Is that even an option?

I'm so glad I found this message board. Sorry for the long post.

First, I own a small company with 5 employees. I administer the 401k plan using software which contains compliance testing. I have basic questions on compliance testing (ADP, Top Heavy etc) and other general questions.

First some background on the 401k. It's open to employees from day 1 of hire and no matching. The plan doesn't specify a max percentage contribution.

1) What is the max percentage allowed by law to contribute in a single year? 100% of salary? (I know there's a max amount of 15K for 2006).

2) Can I exclude someone who started this year from compliance testing? I have been told two different things. One is that I can if the employee is BOTH under 21 and less than one year service and the other is under 21 OR less than one year of service.

3) if every employee is highly compensated can we fail the non-discrimination testing?

4) let's say I'm testing for 2006, I look at the salaries from 2005? Please explain this.

Thanks in advance!

AlanB

Company interested in sponsoring a DB plan may have Affiliated Service Group issues and wants to get an IRS ruling on it before proceeding. What rulings are available ? I assume they can get a PLR -or- request a determination on the ASG issue as part of the initial plan submission. Is this, correct ? are these the 2 avenues available to them ?

Company X maintains a 401(k) plan for its employees (Plan Y) under shich employees are permitted to make 401(k) contributions and X provides a matching contribution equal to a percentage of a participant's 401(k) contributions but not exceeding a specified percentage of compensation (which is defined in the Plan as including the specified elements of compensation only). During 2006, Participant M earned a bonus called N which was not mentioned in Y's definition of compensation. A 401(k) contribution was made from N and a matching contribution was based on such 401(k) contribution. What options does X have to correct this error?