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?

I am an extreme novice when it comes to HSA's and the relationship (or lack there of) with FSA's. So please don't laugh at me . Is speech therapy or acupuncture eligible under the limited purpose FSA? Does participant enrolled in HSA have to prove that they have met deductible before submitting these to the FSA, or can we reimburse before or without this proof?

Could a participant make a loan repayment in the form of stock? My thoughts are that the transfer of stock by a participant to a plan would be a transfer of title, with all attendant income tax consequences, but more importantly could also be a prohibited transaction. Any information or thought?

An employer is submitting under the VFCP to correct the late deposit of employee deferrals. A small amount of money will be deposited to employee accounts as part of the correction process. Is there a requirement that employees be notified of the submission? I know that some employers have sent e-mails or included a note with paystubs, but I'm not finding anything that says an employer MUST notify employees.

This is probably a very basic question but I can't seem to find the answer.

3 months ago I opened a Roth IRA at my bank. I would like to move that to a Roth IRA at a brokerage. Can I move that money? or do I have to wait a full year after I open the account?

BTW I have other Roth IRA accounts that I have had open for 8 months now (those are all ok)

I found an older post (Aug 2000) addressing the question of whether an ESOP may restrict stock ownership to only current employees and transfer stock ownership of terminated participants to the accounts of current employees accounts?

The thread contained very definite and differing opinions on the matter. I am told that this is still common practice. Does anyone know whether any additional authority on the matter has been issued since 2000?

States which do not allow HSA tax breaks can be bypassed by running the contribution thru a 125 plan. Is this a true statement? Doesn't sound acceptable to me but not sure.

Bill is age 58 w/ 30 years of service

The Plan's Normal Retirement Date is defined as the earlier of age 62 w/ 30 YOS or 65 w/ 5YOS

Bill's X would like to commence her benefits under the QDRO now, at Bill's age 58.

In determining her benefit, would the reduction be from his age 62 or 65?

Have a qualified profit sharing plan with life insurance. Plan is terminating and we want to provide participants with some information regarding the impact of

a) taking a cash distribution equal to the cash surrender value; and

b) taking a distribution of the actual life insurance policy, and continuing the premium payments outside the plan.

Anyone have any good write-ups? We have the EOB's excellent section on the topic, but want something in plain english that can be distributed to participants.

Anything you can share is appreciated!

I worked for a company through college full time, and in the process earned shares based on the companies ESOP. After finishing college I left that company and found out soon after that the company (which was privatley held) was bought out by a larger corporation. Everyone that I knew that was vested in the original company's ESOP was compensated for the amount of shares that they owned. I wasn't compensated, so my question is "Am I owed any compensation because I was vested with the original companhy?" or "Am I SOL????" Any help or opions on this matter will be greatly appreciated.

I worked for myself for 8 years (actually, I worked for my dad in a family business), but I never began an IRA or any other type of retirement savings account. And if he (my dad) set money aside in some account for me, I am not aware of it.

We sold the business when he decided to retire, and I took time to go back to college to earn M.S. in Operations Management. I got a new job about 3 months ago in management with a very successful manufacturing plant starting at $36,000 a year. Not a hair-raising salary, but a good start. To my understanding, it will lead to better things.

I am 35 and single, although I do hope to marry some day. Currently, I am in a good position to invest the greater portion of the money I make because I do not have much in the way of expenses. I want to begin a retirement account.

My company will match 40 cents to every dollar I place into my 401K after I have been employed with them for 1 year (up to 6% of my salary max), so I will maximize that opportunity as it becomes available. Presently, 3% of my pre-tax salary is automatically placed into the 401K plan, and I have voluntarilary contributed an extra 3%. All of this is going into the Vanguard Prime Money Market Fund, a fund which I know very little about, except to say that it is probably a low-risk, low-yielding, and very stable long-term fund.

To my understanding, because I have contributed an extra 3% of my pre-tax salary, I have decision-making authority to shift the entire amount to any of 15 available funds offered by Vanguard in addition to the (default) Prime Money Market Fund. I would like some help in this area. Questions that immediately come to mind are: Am I under-utilizing this option by not investing more? Should I consider a mix of these funds, or stay in the Prime Money Market Fund, and look elsewhere for other investments?

In addition to this, I am preparing to create an IRA, but I am unsure which is really the better alternative between a regular IRA or the Roth. It seems to me the only advantage of having a Roth is the flexibility the account would offer under various circumstances. Being taxed now rather than later, however, seems to go against the convention that a dollar in hand today is worth more than a dollar tomorrow (more growing power in the former). I do anticipate salary increases and more pay-out in the form of taxes as time goes by.

Because I am a novice at this, I am asking that the more experienced place themselves in my shoes for a moment and run with the information i have provided. If I have left out a key detail, just let me know. As for my goals, the only thing I want at this point is to maximize long-term wealth, but I am open to making some moderate-to-high risk investments at this point in my life.

Can we put FMLA paperwork for employees in theri benefits file?

Or does this violate HIPAA?

I assum putting in Personnel file is a nono as well?

in order to qualify for the substantially equal periodic payments exception in 72(t)(4), must the payments be for the life expectancy of the participant? someone in my office seems to think the distributions can be over a period of 5 years. the code seems pretty clear that it is life expectancy.