I know EGTRRA impacted rollovers. But, is a rollover from a profit sharing plan to a SEP IRA permissable?

The definition of compensation in a plan document is W-2 Wages and is defined as follows: W-2 wages means wages for federal income tax withholding purposes, as defined under Code Section 3401(a), plus all other payments to an Employee in the course of the Employer's trade or business, for which the Employer must furnish the Employee a written statement under Code Sections 6041, 6051 and 6052, but determined without regard to any rules that limit the remuneration included in wages based on the nature or location of employment or services performed (such as the exception for agricultural labor in Code Section 3401(a)(2).

Client is a bank and bank purchases Bank Owned Life Insurance (BOLI) for some of their executives. In 2005, one of the executives retired and he received the benefit from the BOLI. His 2005 W-2 Box 1 (Wages, Tips and Other Comp) is $75,000and his 2005 W-2 Box 5 (medicare wages and tips) is in excess of $1 million because it includes the BOLI proceeds which are taxable.

Would you base a profit sharing contribution on $75,000 (Box 1) or Box 5 which would be maxed at $210,000 for 2005?

Just took over a DC plan from Kansas. Can any of you Jayhawker TPA's tell me if Kansas requires withholding on plan distributions?

Thanks!

I know that certain states require financial institutions to obtain tax waivers where death distributions are paid from the institutions' accounts. Does anyone know whether these same obligations would apply to IRAs? Since I don't have any experience working with tax waivers, I'm looking for any guidance anyone may have (whether that guidance is specific to a certain state or of a general nature). Thank you.

Hi Everyone,

I am looking for plan documents like SPD etc of DB and DC plans with an floor-offset arrangement.

Does anyone know any website or any link where i can obtain these.

Thanks in advance !!!

Amit

Off-calendar year plan ends August 31, 2005, and is the first year of the plan.

In determining the top heavy status we use August 31, 2005 to determine top heavy for 8/31/2005 and 8/31/2006 year ends.

Question is, in determining the Key Employee status of an officer we look at compensation earned for the period ending 8/31/2005, however does the compensation have to exceed $130,000 or $135,000?

I have a state regulated corporation that is making a supplemental securites offering under state law (i.e., not SEC - less than 500 shareholders). The question regards purchase of some of these securities by the company's defined contribuiton profit sharing plan (no 401k features as of now).

The provisions of Sec 407 provide that:

Immediately following the acquisition of such an obligation, the plan may not hold more than 25% of the aggregate amount of the obligations issued in such issue and outstanding at the time of the acquisition and persons independent of the issuer must hold at least 50% of the aggregate amount of that issue.564 Also, after the acquisition, the plan may not have more than 25% of its assets invested in obligations of the employer or its affiliates.

What is the defintion of "persons independent of the issuer" ? Would current directors, shareholders, officers, etc. be excluded from that definintion ?

401k plan administered by insurance company is currently taking the non-vested money from termed participants and placing them in a non-vested account. The participant is then made 100% vested in the remaining balance. They do not make those non-vested funds available to the company, which uses forfeitures to offset contributions. I don't have a problem with that, but they also don't allow the participant to trade that non-vested part of their account. So, should the participant make a trade in his original account and then rehire....we've got a problem. Or do we? Would the participant owe, or be owed based upon the earnings differential, a residual income amount once those forfeited funds are reinstated?

anyone else do this? I don't take forfeited money until the 5 year break or a distribution occurs, but evidently they don't follow this train of thought.

A terminated participant has a balance of $ 107.00 in their account and wants to cash out. Do we have to withhold the mandatory 20% ( $21.00) or can we send them a check for the full balance and have them pay the taxes at tax time?

We have some pretty old benefit files in storage (over five years). These include applications/enrollment forms, billing records and contracts. Many are from carriers we don't use anymore. How long do you keep files in storage? When and what do you shred?

I have a time-sensitive question in connection with the purchase of a business and the associated transfer of assets and liabilities between two DB plans. Participants under Seller's Plan will become Participants under Buyer's Plan as of the Closing Date. NRD under Seller's Plan is 62; under Buyer's Plan, NRD is 65.

Benefits under Seller's Plan will be frozen under Buyer's Plan, and a modified wear-away will be established for active employees, under which the transferred employee's accrued benefit will be the greater of:

Option A - his or her benefit as if he or she had continued under Seller's Plan for up to two years after the Closing Date, or

Option B - his or her frozen Seller's Plan benefit plus the benefit he or she accrues under Buyer's Plan.

My question is with respect to Option B. When calculating the amount attributable to credited service under Buyer's Plan, is it necessary to import the NRD (62) under Seller's Plan? That seems strange (and very complicated to administer), but I'm concerned that using Buyer's Plan's NRD (65) might violate Section 411's vesting rules, under which I think such a change would be treated as if it were an amendment to Seller's Plan. If I'm looking at the question right, it appears to boil down to whether you can amend a DB plan to raise the normal retirement date with respect to credited service after a specified date. Either or both impressions could be wrong, though. BTW, changing the formula is not an option, as it has already been communicated to the transferring employees.

Any comments appreciated.

We are going through two transactions - one stock and one asset sale. One closes in 7/2006 (asset) and the other closes 10/2006 (stock). With regard to the asset sale - we are not assuming any of the plans and will let the transferred employees participate in our plans. With regard to the stock sale, we will terminate the plans at the closing and have the employees participate in our plans.

My boss wants to recognize prior service for purposes of the 401(k) plan, but not for the cafeteria plan.

I found the predecessor employer requirements which appear to apply to the 401(k) plan and the stock transaction - but with regard to the asset transaction - has anyone ever heard of recognizing service for one plan (401(k)) and not another (cafeteria plan)? Also, do the predecessor employer rules (IRC 414(a)) apply to the cafeteria plan? I did find that for self-insured med reimbursement plans prior service does count as service if it is with a predecessor employer per 1.105-11 testing.

I am trying to find out what why so many companies do not have equalizing coverage for mental health and physical health. Any input would be greatly appreciated. Also if you would like to share what your company offers for both it would be great. At The Mental Health Association in Texas we have comprised a list of honor roll companies that do have equalization. If you are one of these companies, we would like to recognize you.

Thanks Deena

We have a profit sharing plan where one of the HCE's wants to amend the plan to allow in-service distributions after the participant has been in the plan for at least 5 years. Then he is going to take a large portion of his account balance (to pay for his personal bankruptcy!), and then he wants to amend the plan again to remove the in-service distribution provision. I know hardships and loans are not considered a protected benefit, but would this type of in-service provision be a protected benefit? If we did the amendment then another amendment to remove the in-service, would part's w/ an acct bal at the time of the initial amendment have to grandfathered into the in-service provision? Finally...he wants to have the in-service provision only open for 2 days...seems to me that it should be open for a longer period...any thoughts?

I'm drawing a blank on this - it seems to me that I recall that an employer may not make employment conditional upon waiving participation in a qualified plan. But I'm not sure why I think that - is it true? If not, was it ever true, and got changed? It's bugging me, and I can't find anything addressing this specifically. (Even if permissible, it wouldn't work for long as they would fail coverage testing at some point.)

Thanks!

I have a 401(k) Plan that has laid off a group of EE's. It is Safe Harbor Plan with 3% SH contribution.

Some of the EE's were sales people with Cars. They are going to run the Cars through the payroll system because they are now taxable income. The employee is not receiving any cash payment. Just the Car.

With New/Proposed Severence Rules would a Safe Harbor Contribution be due on the Amount of the Car that is being run through Payroll as Part of the Compensation Package?

Document is Corbel Prototype. NonStandardized.

Thanks

P

Employer wishes to start an ERISA 403b plan. They currently sponsor a Non-ERISA 403b plan, but due to surrender charges on current policies, wonders if he can maintain both. Would one 5500 reflecting both plans suffice?

Can a 401(k) plan allow participation to temporary employees (i.e. employees hired by the company for a specific time period to complete an assignment)? If so, are there typically any requirements for eligibility of this group - could it be different than eligibility for regular employees?

How does ERISA section 408(d) work? To whom does it apply?

I can't find much at all on it.

Any help will be appreciated.

Is it possible to designate a higher match level for the NHCE group than the HCE group such as:

NHCE: $ for $ on first 3% then 50% of next 3%

HCE: $ for $ on first 2% then 50% on next 3%...4%