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.

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.