An owner/participant in a DB plan would like to take distributions and avoid the 10% early withdrawal penalty. He will continue to work, so we will have to figure out a way to separate him from service, but that is another issue. Assume that there is a distribution event. Based on the facts, it appears that the only reasonable way to do this is to use the period payment exception to 72(t). The problem is that the owner/participant does not want to receive periodic payments based on their entire benefit; they just want to receive periodic payments based on a portion of their benefit. The three approved methods of distribution seem to take the entire benefit into account: (1) RMD; (2) fixed amortization; (3) fixed annuitization. Is it permissible to base the periodic payments on only a portion of the benefit for purposes of the period payment exception to 72(t)?

Employer sponsors a Profit Sharing Plan which allows for the purchase of life insurance. Plan holds a whole life policy FBO the owner, for which premiums are paid from the owner's annual plan contribution.

Client received a letter from the insurance carrier regarding Rev. Ruling 2004-20 indicating that, for policies containing a disability waiver of premium feature, the portion of the premium (i.e., employer contribution) attributable to same MAY not be currently deductible, possibly resulting in a non-deductible employer contribution - and all of the the ramifications thereof.

First I had ever heard of this and was curious if anyone else had ever encountered same, especially in conjunction with a DC vs. DB plan?

Thanks!

Our client (years ago) permitted participants in a profit sharing plan to purchase life insurance policies on self or spouse. these are single life policies (not second to die). Kirk's post from a while ago cites to 401 regs as permitting purchase of policies on a family member, subject to the incidental benefit rule. The DOL exemptions do not appear to address this situation. The class exemption from 1992 deals with policies on participant's life. A more recent advisory opinion expanded the interpretation to include second to die. Can a participant purchase a policy on his or spouse from the plan without violating 4975 prohibited transaction rules?

In practice - what does 402A(d)(2)(B) below mean? Does the 5-year timetable begin (for all future contributions) when you put the first dollar into the Roth 401k account? Meaning, for example: If I contribute $1 to Roth 401k in 2006, any and all distributions made in 2011 or later are qualified (even though the bulk of contributions came post-2006)?

Is the answer the same for Roth IRAs?

Thanks.

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402A(d)(2)(B) DISTRIBUTIONS WITHIN NONEXCLUSION PERIOD. --A payment or distribution from a designated Roth account shall not be treated as a qualified distribution if such payment or distribution is made within the 5-taxable-year period beginning with the earlier of --

402A(d)(2)(B)(i) the first taxable year for which the individual made a designated Roth contribution to any designated Roth account established for such individual under the same applicable retirement plan, or

402A(d)(2)(B)(ii) if a rollover contribution was made to such designated Roth account from a designated Roth account previously established for such individual under another applicable retirement plan, the first taxable year for which the individual made a designated Roth contribution to such previously established account.

Does anyone have an investment election report that can handle investment products (models)?

I would like to be able to print everyone's current investment election and for those that have elected models it would print the model name.

I haven't had any luck linking the PARTALLODET table. Tried linking using 'Left Outer' in the link option.

Help!

I have a plan that is terminating 5/31/06. We were notified that this was going to happen sometime in late January. We are still awaiting a written confirmation of termination.

I have three participants from the plan who have terminated in the past year - all not fully vested.

The first terminated in January, the other in March and the final one in April.

How far do we go back for making the terminated ee's 100% vested? Is there a reg or just a "rule of thumb"?

Thanks!

I have a current client that is a real estate firm - they are opening a title insurance company. Which under RESPA must be a completely separate entity - same ownership. Can they both participate in the same plan or do we need to set up a separate plan for the title company?

I read a post from several years ago regarding using refunds to correct a failed ADP test in a plan with a non-calendar year plan year. The question was regarding the 1099-R code to use. The practicioner who answered said that in their experience most off-calendar year plans distribute refunds after the 2 1/2 month period, paying the excise tax, so that personal returns do not have to be amended.

Just curious to know if anyone else has any experience in this type of situation.

Thanks!

We administer a small takeover PSP where the company owner / participant took out a $50,000 loan three years ago. He paid off the loan in full with interest within a year of taking it, however he should have made quarterly payments. As soon as we took over the plan, they received an audit notice. the plan was audited and the loan was determined to be a taxable distribution. I dont believe audit CAP is available because it is not a disqualification issue. Also, it appears no other correction program is available because the plan has been audited. Has anyone had this experience?

While other companies drop retiree health/welfare benefits, we are looking to ADD them to our benefit menu. As the "benefit analyst" here, I'm horrified that the original plan is this:

Must have worked here 20 years

Employee pays premiums (although the idea of employer paid is still being tossed about)

Benefit never ends until employee does (no stopping or COBRA eligibility upon Medicare eligibility)

I am trying to explain how this creates some serious financial liability for us, but seems to be falling on deaf ears. MY proposal is to:

*combine age with years of service, requiring that there be no retirement prior to age 55, with decreasing years of service requirements the older the employee becomes (example 55 + 10 yrs service, 56 + 8 yrs service, etc.) or some combination of age and service

*end coverage upon Medicare eligibility, allowing for COBRA participation at that time

*require employee to pay premiums

Does anyone have any other tips or things I should be thinking about??? Any help appreciated! Thanks.

Is an autopsy a reimbursable expense under a health fsa? If it is, please provide the supporting authority.

Thanks.

Is it ever permissible to amend, MID-YEAR, the definition of compensation to exclude fringe benefits

Can an employer sponsor a legal services plan that is tax favored either to employer or employee?

Reporting company's 401(k) plan held publicly traded common stock until recent (April '06) de-registration under Section 12 of '34 Act, at which time stock investments were converted to cash. Now that company is private, is there an obligation to file a Form 11-K for the plan for 2006?

If a plan sponsor wants to terminate the plan, they can choose to file a 5310 to receive a favorable determination letter.

Upon receiving this letter, they can then distribute the plan assets.

My question - if the assets have already been distributed and there is ZERO money in the plan, is there any reason to file a 5310?

What would be the reasoning for filing a 5310 for a plan term if the assets have already been distributed?

Thanks!

Two participants in a six-life self-directed 401(K) plan have had the correct amounts deposited to their respective accounts and investment choices, but incorrectly allocated between their deferral and matching subaccounts. There's about $2,000 - $3,000 for each shown as deferrals that should have been allocated to the matching subaccount. The plan does not allow loans or hardship withdrawals and all the matching contributions are safe harbor and 100% vested. Between the hassles involved in getting the investment company to make the adjustments, the employer's reluctance to correct the problem due to his perception of a pr issue with the employees, and the calculations entailed in figuring out the exact transfer amounts and earnings adjustments, we sure are tempted to not fix this. What reasons should be given to the employer to have this fixed? As long as money from this point on goes in correctly, and all previous amounts are in the correct investments in the aggregate for each participant, should this even be an issue? All help is appreciated.

participant completed an enrollment form requesting a certain percentage of pay be deducted for 2005. however, employer failed to implement instructions. how can this be corrected? i think you need to follow the VCP method for exclusion of an eligible employee. basically the employer has to contribute at the deferral percentage for her group. do you agree or disagree?

One of our clients maintains a money purchase plan and a safe harbor 401(k) plan that provides that the 3% nonelective contribution will be made to the money purchase plan. The 3% nonelective contribution is currently the only contribution going into the money purchase plan.

They would like to merge these plans in the near future, rather than wait until the end of the plan year (December year-end). They still intend to make the 3% nonelective contribution, but this contribution would now be made to the 401(k) plan instead of the money purchase plan. However, the safe harbor notice states that the contribution will be made to the money purchase plan.

Would this change violate the safe harbor rules since we're changing the plan that was identified in the notice? I haven't seen this addressed anywhere else.

We have a guy that wants to roll money over to an account in Australia. What is the tax treatment of this kind of transaction? I'm thinking it's a taxable distribution subject to the regular income taxes and penalties for early withdrawal, but I can't find anything to support this. Anyone out there know how to handle this, or where I can look for more info? Thanks.

JB

An employee is receiving disability benefits from a governmental defined benefit plan as a result of a work related injury. We treat these benefits as excludable from income as allowed under Section 104(a)(1). We now have a domestic relations order for this same individual. Are the alternate payee's benefits excluded from income as well?