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?

I know this has been discussed before, but I am having trouble finding the previous posts. Can a 401(k) plan with immediate entry for 401(k) purposes, impose a 1 YOS eligibility requirement before eligibility is met to share in the safe harbor match?

Thanks

When a participant passes away and has an outstanding loan balance in the plan, what should happen to the loan? Would it be defaulted and taxable to the estate?

If an employee in an excluded class is well over age 21 and has completed well over 1 year of service changes job classification to a status that is covered by a 401(a) plan, when must such employee be allowed to participate? Immediately? Or .....

1.410(a)-4, which is at least partially obsolete, seems to allow a wait until an entry date that is the lesser of

"(i) The first day of the first plan year beginning after the date on

which such employee first satisfied such requirements, or

(ii) The date 6 months after the date on which he first satisfied

such requirements"

where the requirements were being in eligible class, attaining age 21 and completing 1 year of service.

Thanks for any help.

Looking for some confirmation here. The new tax law recently passed (Tax Increase Prevention and Reconciliation Act of 2005) makes Roth IRA conversions available to everyone beginning in 2010. Currently, if your Modified Adjusted Gross Income (MAGI) is over $100,000 you cannot convert assets to a Roth. Additionally, you cannot contribute to a Roth IRA if you make over $150,000 jointly. What's preventing a couple making more than $150,000 in income from funding a non-deductible IRA each year starting in 2006 and then converting the account to a Roth in 2010? Conceivably you could continue to do this every year - make a non-deductible IRA contribution and then immediately convert it to a Roth IRA. It basically opens up Roth for everyone! You would only have to pay taxes on any earnings on the regular IRA upon conversion if you made an after-tax IRA contribution. You would have thought the gov't would have noticed this loophole but you never know. Am I missing anything????

Which large national firms are now accepting automatic IRA rollovers from defined benefit plans?

When last we checked, only small--sometimes start-up--firms were doing this business.

A small company was just started in May, 2006, and damn the torpedos, they want a 401(k) plan up and running by 7/1/06.

They want a calendar year plan, but with a 7/1 effective date, which would make their initial plan year a 6 month SPY. The document software does not seem to support having an intial SPY, and as such, there would have to be an amendment before 1/1/07, indicating the plan year as being from 1/1 - 12/31 after the 2006 plan year.

This is what they will likely do, but what if we just drafted the document to reflect a 1/1/06 effective date? We would have the "whole plan year we want". The company wasn't around at that time, but would that invalidate the document?

Is there a phone number or website to find out if you company has filed 5500's for you health plans in the past. Our old CFO did not keep accurate files and I cannot find anyone who can give me this information.

I appreciate any help you can give me.

Hello, I am 21 years old, and I want to start putting money into a Roth IRA. However, I have no clue as to how to open one. I don't know if I am suppose to go to a bank or an investment company. If I go through a place like Scott Trade do they charge a fee? Please offer me advise. Thank you.

We have a client that established a 401(k) years ago. A few years later, a union was formed. The union employees are covered for retirement throught he union, so the client wants to know if there is a way to now exclude these union employees from the company 401(k). Can you do this with a simple amendment? And could the now excluded union employees keep their balance in the plan?

Any thoughts are appreciated....thanks in advance.

DB plan purchases an allocated contract for half the benefits under the plan. That needs to be reported on the Schedule A for the year of the purchase. Does the Schedule A information still need to be reported in later years, i.e., because the plan has funded the benefits through the contract, or is Sch. A only required for that one year.