Does anyone know the criteria that would need to be met in order to exclude a spouse's business? I believe there are 5 points that need to be met? Anyone know what they are or a link?

Thanks.

I have a plan that is top-heavy. The owner, who is over 50, would like to set up a 401(k).

Can we set up a SH 401(k), do the SH match, have the owner just put in catch-up for himself and then be able to do a NC allocation? This way he does not have to worry about if any employees defer or not and he can max himself out. Is this making sense? Can an owner just put in catch-up, no deferrals. Thanks for any insights.

Does anyone have the 30-year treasury lump sum rate for July 2006?

I have to admit I don't have any experience with governmental 457 plans at all, zero, zilch. The client is looking for something with a little more public funding and more "guaranteed" than their current 457 plan. I believe a goverment entity may adopt a profit sharing and/or a defined benefit plan, but I also understnad that are a lot of differences. I think I even read that thy aren't subject to Title I of ERISA. That seems like a big deal to me.

We are talking about a small, rural goverment entity. As strange as this sounds I am almost thinking that a Money Purchase plan might be a good fit. I figured MP plans were "so 1990s", but maybe this could work. This will lock in a fixed amount of contribuiton that is required to be paid each year, but will not have exposure to unfunded liabilities.

Anyone have some tips for me while I continue my research?

Has anyone heard about whether the DOL will be issuing guidance addressing the reasonableness of mutual fund fees? In order for mutual fund fees to be exempt from the prohibited transaction rules, they must be "reasonable."

Thanks!

One of my new clients is requesting a Certification, 29 C.F.R. 2520.103-5. What is this and what does it do for my client? Can anyone point me to any guidance so I can read up on this? His auditor says that without it, they will have to have a full audit, not just a limited scope audit.

A plan which has 401k and a fixed match deposited too much money in 2003. The plan allows for discretionary match and/or profit sharing. However, the 2003 extra contribution is still sitting in the account (under the forfeiture section) and not allocated as of today. It appears that it should have been allocated to participants eligible to receive a contribution in 2003. Comments??

Client has a non SH plan with a 6/30 year end. ADP test is failed for pye 6/30/06. HCEs' deferrals made during the first 6 months of 2006 - no deferrals were made to this Plan by HCEs between 7/1/05 and 12/30/05. Question 1: If refund is made by 9/15/06, is refund taxable in 2006? Question 2: If answer to question 1 is yes, can HCEs "defer" the amount of the refund during the plan year that began 7/1/06 to enable them to defer the full $15,000 during 2006.

We have heard that the IRS has a new revenue ruling concerning pick-up contributions pending review by the Office of General Counsel.

Does anyone have any information on this?

Thanks.

We have heard that the IRS has drafted a Revenue Ruling pertaining to pick-up contributions that is now pending with the Office of General Counsel.

Does anyone have any information about this?

A participant who is age 60 makes Roth 401(k) contributions during 2006 .

During 2006, he does a direct rollover of half of his Roth 401(k) account into a Roth IRA. (His plan allows in-service withdrawals.)

This distribution would be composed of both contributions and earnings, correct?

The distribution would be considered a non-qualified distribution since it had not been five years from 1/1 of the first deposit year, even though the age requirement was satisfied.

Question: We normally think of a direct rollover from a 401(k) plan as not being subject to tax. Is any part of this distribution taxable? Will tax be due on the interest and earnings piece of the rollover distribution since it is a non-qualified distribution? Would the answer change if the participant were under age 59 1/2?

A participant might choose to do this in order to get the 5-year non-exclusion period for the Roth IRA started as early as possible.

Thank you for your help in thinking this through.

Correct me if I'm wrong...

When you open a Roth and contribute money to the account, that money is used to invest in a fund (a mix of stocks, bonds, and other investments) of some kind.

Mutual funds usually have an minimum investment amount; i.e. you must have at least $1000 (for example) to invest in the fund.

At Fidelity, there are two options

If you opened your account with at least the minimum amount ($1000), you can immediately invest in the fund and your money starts growing.

If you opened your account by making automatic contributions on a monthly or quarterly basis (say, $100 a month), you can avoid the initial $1000 investment. But, the money just sits there until there is enough accumulated to make the initial investment of the fund of your choice.

Without having enough money in the account to make an initial investment in a fund, the money itself is not growing.

Right?

That said, should one open an account with a mutual fund company by making small monthly contributions and allowing the money to accumulate until you reach the minimum investment requirement? Or, should one just save money on their own (savings account, short-term CD, etc.) until they have enough to make the minimum account opening money, and then open the account?

I guess I don't understand the value of opening an account by automatic contributions if you can't afford to invest in any of the funds. For example, if the minimum investment for a fund is $1000, and you are contributing $100/month, it would take 10 months before you could invest in anything.

Since this will not qualify for the DFVC program, is there any voluntary IRS program that will provide penalty relief for filing 2 or 3 years late, or is the $25/day $15K penalty the only option for an EZ non-filer who wants to become current?

Does anyone know of any guidance out there addressing being compensated in foreign currency while participating in a domestic corporation's 401(k)?

COULD SOMEONE PLEASE INFORM ME OF AN EMPLOYEES OPTIONS FOR THE FSA & DCA ACCOUNTS WHEN GOING ON AND RETURNING FROM FMLA?

I have a client who has not amended their plan since ERISA. I've been able to put together all the documents. However, the TEFRA,DEFRA, REA Restatement is an individually designed document and the Tax Reform and GUST are regional prototypes. My question is - which 5300 series form do I use to file for the determination letter with the VCP filing? This is a straight forward profit sharing plan. Can I use a Form 5307 since the last document is a Regional Prototype?

I have a question about Medicare as secondary-payer exception for a group health plan of an employer with at least 20 employees. If there are 6 non-union and 50 union employees and the plan is for the non-union employees, and they have a non-union employee turning 65, would Medicare be the primary or secondary payer for that employee?

Thanks for any help.

Filing an amended 2004 5500, after affecting corrections to SCH I.

Although I've researched significantly, both on line, and "hard copy" materials, including government filing instructions, I've yet to see addressed reporting requirements RE (amended?) SAR:

- is amended SAR required? (logically, it would seem so);

- if so, form of reporting requirement?;

- if so, timing of handout to participant?

Appreciate review and feedback.

Geo

Former hourly employee became union employee and no longer eligible for the 401(k) plan. This individual has an outstanding loan from a plan in which he no longer participates.

How should this be handled - full loan repayment now or can employee still repay over original period?

Not addressed in the plan loan policy.

Any assistance is appreciated.

Nonqualified deferred compensation agreement provides for payment of benefits only upon separation from service or death of employee. No mention is made of change in control. Can the parties now amend the agreement to provide for a payout on the earlier of change in control or separation from service, without violating the non-acceleration rule (or any rule)? (A change in control is being negotiated.) I thought the answer was clearly "yes," but I can't find an explicit statement to that effect in the proposed regs. Citations would be appreciated.