I did a quick search on this and found a topic that began to address it but it petered out before any resolution could be found...

Given full disclosure to the plan sponser and plan participants, can 12b-1 fees be allocated back to the participants as income?

Plan sponser is using a financial advisor that is using R-2 shares. We do not want to accept any 12b-1's (even to offset fees) as we simply would rather remain neutral as to assets (in this specific case there are cheaper recordkeeping opportunities that offer r-5's and thus no 12b-1's and savings to the participant) Since 12b-1's are really a reduction of income, I'm wondering if we can allocate them back as income to the same individuals...in essence making them whole? or do we run into the issue of them being labeled as "fee reimbursement" and thus a contribution and thus having to be allocated as such.

I am a Payroll Coordinator who is trying to set up salary deferral limits crorrectly in the in-house payroll program.

My new employer (a hospital) has several plans. Two Tax Sheltered Annuities have been offered for many years to which no employer contributions are made (non ERISA 403(b)). A 401(k) Plan was established last year to which employer match and disretionary contributions are made.

My question is - what is the maximum salary deferral amount for an employee (under age 50) for 2006 ? Is it a total of $15,000 to all 3 Plans ? Or is it $15,000 to the TSA's and $15,000 to the 401 (k) for a total of $30,000 ?

I've seen what looks to me like conflicting answers to similar questions on this board. I'm thinking that whether or not the 403(b) is an ERISA plan may make a difference.

Thanks in advance

An employer has begun reimbursing their PS trust for the quarterly investment management fees of the pooled trust. Its my understanding these reimbursements are to be treated and allocated as contributions, since they are deductible under IRC 404. Comments anyone? thanks

Can someone site for me the code or a treas reg where it states a non-spouse beneficiary cannot roll from a qualified plan where they are a beneficiary into a beneficiary IRA?

Plan sponsor filed in 2001 and noted on Schedule I Part II question 5(a) that yes, a resolution to terminate the plan had been adopted. I see no record of a "final" form 5500 being filed ever (the 2001 version was not marked as the "final" report). In 7/2005, the employer started a new plan and transferred the assets of the old plan into this one. Balances from the old plan appear to have been rolled over into this one in September. (We are new recordkeeper/outsourced for the trustee as of 1/1/06, but I'm responsible for the 2005 Form 5500.) Need I be worried that there should have been an "old" plan final Form 5500? The "old" plan is filed under plan #002, but this "new" plan is 001. That looks odd to me. Any thoughts? Thanks.

I don't (fortunately or unfortunately) do a lot of work in the governmental 457 plan area, so I am hoping someone can point me in the right direction.

Question: Does the 457(g) requirement that assets be held in trust for the exclusive benefit of participants require that the 457 plan provide that the plan benefits are not subject to assignment and alientation (similar to that required by 401(a)(13) for 401(a) plans)?

An attempt is being made to attach a participant's account under the 457 plan to satisfy a state court tort judgment against the participant. The plan terms do not address this.

We have a client whose defined benefit plan covers 174 participants: 150 active and 24 vested terminees. The NOIT was n supposed to be given out 4/30/06 with proposed termination date of 6/30/06. Client called this morning to say that NOIT had been given to the actives, but not to the vested terms. Looking at PBGC reg. 4041.6 it says the PBGC may impose a penalty of $1100/day, and may also issue a notice of noncompliance. The operative word appears to be "may", which implies that there may be some wiggle room. Does anyone have experience with such a situation? The plan year end is 9/30, so it wouldn't be a major problem to issue a new notice with a later termination date, but client would rather not.

Can anyone tell me (or point me to something official) if the CalSTRS DB program causes our IRA deductions to phase out due to participating in a "retirement plan"? It would seem to me that since it is not voluntary, that it shouldn't be considered. My new tax guy says that my wife's IRA is not deductible because she is a FT teacher contributing to CalSTRS. (we've always deducted it in the past and she is not contributing to any other plan like 403b or 457)

Steve Walters

Our plan year runs 1/1 through 12/31. An employee just contacted me yesterday (June 7) to say that both she and her husband have elected the annual maximum $5000 for dependent care. She is requesting to stop her contributions because their combined contributions YTD will reach $5000 by July. As of June 1st no claims had been paid by our TPA from her DCAP account.

Has anyone ever encountered this situation before? How did you/would you proceed? Thanks for your input.

Can a plan be top heavy the first year?

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.