Several doctor groups are merging into one. All had existing plans. Some decided to merge their plans into one new plan. 3 groups were going to terminate their plans prior to the merger. We had asked that the board resolutions to terminate the plans be in place prior to the merger.

One of the company's current TPA has told them they should not terminate the plan, but freeze it instead. Not sure why, but that doesn't matter to us. However, if they freeze the plan do the assets of that plan count in the Top-Heavy test of the new plan?

Since I cannot find an answer to this in the usual places, I am beginning to think the answer to my question is NO, but I am hoping someone out there might be able to give me a definitive answer.

Thank you.

Due to income factors, discovered I had an excess Roth contribution and requested the return of such. My problem is I am over 59 1/2 and yet the taxable earnings on the 1099-R indicate code 8J (8 = excess contributions plus earnings taxable in 2005; J = Early distribution from Roth IRA). The "J" triggers the 10% penalty on early withdrawal. Is this correct? If not, how should I proceed?

Thanks in advance!

Brutally messed up takeover plan. "Less than competent" actuary that nobody has ever heard of. Refuses so far to acknowledge requests for correction of blatant Schedule B errors. Insists that it is ok to compute current liability using sex neutral tables (plan is 95% female to top it off). On and on and on.

Has not signed anything recently with his enrollment number on it. Hmmm.

Is there a fairly quick way of confirming (current and past) enrollment?

I'm looking for a sample 60 day notice to employees for a benefit freeze.

Can anyone help?

Thanks.

Steve

What is the absolute latest date by which partners/sole proprietors must fund salary deferrals for any given year? Section 401(k) indicates that the amount deferred must be attributable to earnings for work currently performed for the employer; what does this really mean for owners? Any Code citations, letter rulings, etc. would be greatly appreciated.

Urgent query!

The company has agreed to give employees the election to receive shares of stock or to have the shares put into the employees 401(k) account.

I think the election creates constructive receipt for all employees of the FMV of the stock on the date of distribution.

My questions are about what happens on a practical level. Is the employer required to wtihhold income and FICA and FUTA from the next payroll check? What if in that payroll period there is insuffcient income to pay the tax and withholdings? Can a 1099 be issued for the value of the stock instead?

For the employees who ask that the stock be put into their 401(k) accounts, is the income tax imputed because of constructive receipt a wash with the tax saved on the deferral/contribution? Or, is the 401(k) contribution a post-tax contribution?

I'm assuming that in this scenario there is no way to avoid FICA and FUTA, is that right?

This distribution is scheduled to happen within the month. I would greatly appreciate help to clarify the consequences incurred and the procedures that must be followed because of the election. Please help! Thanks.

Can a DB plan have different definitions of service for benefit accrual and 415 limit?

For example, suppose a plan requires 1,000 hours for benefit accrual. A participant will have 9 1/4 years of participation at NRA. The dollar limit would be multiplied by 9/10ths. Could a plan be designed to credit a year of participation for 415 purposes on 1 hour of service? In this case there would be no dollar limitation reduction.

Small employer has a 401(k) plan but, after several years has decided he no longer wants to allow 401(k) contributions. He wants to eliminate the 401(k) feature, but keep the discretionary PS piece. Is a CODA a protected benefit and therefore, is he prevented from eliminating it? Also, since this is not a plan termination, the participants could not take distribution of their 401(k) monies, correct?

Finally, since 401(k) language is throughout the entire document and SPD, if the above is permitted, would you restate the entire document and SPD, or handle the change via a 1-2 page plan amendment, with an SMM?

Thank you

This is a two part question

For a plan that was amended to reduce the involuntary cashout limit to $1000, is there a required amount of time to wait for signed distribution forms before paying out a participant in this situation? Does this rule mean that if I quit and my vested account balance is $800.00, the Plan can cut me a check for $640 and send the rest to IRS without asking me? Is the plan required to have signed distribution forms on file for me (this usually comes up in the annual 5500 audit of some large plans we have).

Secondly, if participant's vested account balance is between $1000 and $5000, the Relius distribution forms have a section for "Proposed Distribution Date". What period is considered reasonable to enter here?

thank you

I received a claim for anesthesia related to a cosmetic breast augmentation. Can I reimburse the anesthesia, or do I consider this part of the cosmetic procedure? Opinions, please.

I have a participant who would like to roll her voluntary after-tax money, including the interest, out of her employer's Profit Sharing Plan. She is not 59 1/2.

I was told it is acceptable if the distribution consists of pre-1987 $$, which it does not. It's all post-1987 $$.

The plan document states that in-service distributions may be made at or after normal retirement age.

Can this be done?

What is the account balance for determining maximum loans in a balanced forward plan if a participant has been paying on a current loan? Is the participant's loan interest paid as of the most recent valuation date added to the account value on this valuation date?

Loans are a participant directed fund.

I didn't see this covered in any recent posts... I'm debating withdrawing some of the contributions I've made to my Roth IRA, but was told the following by Fidelity:

"Whatever dollar amount is not returned back in 60 days, then that money is taxable for that calendar year.

For example, you take out $5,000 from your IRA. You return $4,000 within the 60 day time frame. Then $1,000 is taxable for that year. You would report it as regular income. Also, you would be liable for any early withdrawal penalties on that $1,000."

Is this right? Hasn't the money I paid in already been taxed as income when I first earned it??

It was my understanding that I could withdrawl contributions at anytime with no penalty.

Thanks,

K

Has anyone ever heard of this?

On the one hand, it sounds like it could be a disabled life mortality table.

On the other, it sounds like it could be a recovery from disability table.

I understand ers can fund an HSA, and if they do, they have to make comparable contributions. I can this this on a monthly basis.

1. Can the plan allow the employer to pre-fund an HSA based on an appeal where the ee has a large expense and the HSA doesn't yet have enough $$ in it to cover the deductible? HSA new this year.

2. If so, I think I would have to make the same contribution to other eligible ees in the same classification.

Any thoughts?

Cathy

are loans included in a participant's account balance for top heavy purposes?

I work for an employer who has both a pre-tax health insurance plan as well as a Sec. 125 health spending account. I recently tried to cancel my health insurance and was told that since the plan is a Sec. 125 plan, and the premiums are pre-tax, I cannot cancel my coverage unless there's a qualifying event. I didn't realize that "qualifying events" applied to regular health insurance. Here's what our HR department says:

"When premiums are paid on a pre-tax basis through the Flexible Spending Account, you may only terminate coverage on you and\or your dependents at the beginning of a plan year (January 1) by completing a new enrollment\change form to decline coverage. Mid-year changes are only allowed when certain qualifying events such as a change in employment or family status occur and the change request is received by HR within 30 days of the qualifying event date. If you pay premiums on an after-tax basis, you may terminate coverage at any time."

Is our HR department interpreting the cancelling of health insurance right???

If an employer provides a $50 Amex gift card to employees who complete the HRA, is that somehow taxable income to the employee?

The vendor handles the distribution of the cards, and does not provide a list of employees who received the incentive, citing HIPAA.

I've pretty much decided that I want to begin a Roth IRA with Vanguard (target-date retirement fund) but they require a minimum deposit of $3000. My wife and I have about 10K in our savings, but would like to keep that as our emergency fund. My grandmother had bought me 5 shares of stock in Pfizer as a child and they've grown to over 120 shares now at about $26/share. I was wondering if it would be a bad decision to cash the pfizer stocks in order to begin my Roth IRA. They are worth about $3300. Any suggestions??????

I have the following situation:

ESOP started in 2004. For the 2004 stock was released from the suspense account and allocated among participants. In 2005, a dividend was declared. The document states that dividends on allocated stock are allocated based on stock account balance and that dividends on unallocated stock are allocated based on account balance in the "other investments" account. There are no participants with an "other investments" account balance, as all of the accounts consist solely of company stock.

Does anyone have an idea of how to proceed with the allocation of the dividends on the unallocated stock? Since the terms of the Plan do not address what to do if there are no account balances in "other investments," could the Plan be amended now to address the way in which those dividends will be handled?

Thanks!