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.

The ESOP document says all family members will be excluded from the plan starting with the year of the 1042 sale and for the next 9 years. I think I know the answer (or fear the answer) but does this have to apply or is the rule that the family members just can't be allocated any of the 1042 stock?

If the ESOP is buying the stock outright (with the existing cash in non family member accounts) and then makes a cash contribution, does the law precude the family members from getting a cash contribution under the ESOP?

Many thanks for all the help.

When determining ownership percentages for Key employee (or HCE) determination, do you count just shares owned, or should share options also be considered?

Help! Who is a family member for purposes of the nonallocation of 1042 stock? I can't find my reg book.

Many many thanks

Lori

Employer maintains a self-funded health plan for >100 employees.

The plan is not part of a multi-employer benefit plan that files 5500’s on behalf of all employers.

They use the services of a TPA

There is no trust account for the plan. Benefits are paid entirely from the general assets of employer and stop-loss insurance.

Employees do not make contributions to a trust account. However, employees do pay a monthly "premium" to employer

Question: Is this subject to the Schedule H and audit requirements?

I am taking over a defined benefit plan. For the 12/31/04 to 12/30/05 plan year the employer made a contribution and then took some back on the grounds that it was nondeductible. The plan document says that nondeductible contributions MUST be returned to the employer. The schedule B was not filed, because assets are less than $100,000. In reviewing the work, I find that the maximum deduction was overstated. So the amount returned to the employer doesn't cover the whole nondeductible contribution. The amount is small - say $500 difference. The client will need to pay an excise tax on the amount of nondeductible contribution remaining.

I will need to file a Schedule B so that I can attach the required attachment to back up the return of excess contributions. Since I haven't yet filed the schedule B I can change the RPA current liability interest rate to increase the deductible limit, to avoid the excise tax. But can I use any rate in the range even though it looks ridiculous, to come up with the number I want - and if I do that, would I still be right that the excess I come up with is the nondeductible contribution that can be returned. I don't see anything to prevent that action, but it doesn't seem in the spirit of things?

Ive heard that there's a book out - there may be more than one - that covers 412i plans quite well - does anyone know where I could get it ???

Just trying to find out if any of you work with plans that let participants manage beneficiary designations online. For those with spousal consent requirements I assume you are still requiring paper?

Just curious to see what is being done out there.

Thanks

A 401(k) plan was using the SHNEC up through 2004. For 2005 they amended the SH out of the plan. The 2003 SHNEC was deposited in early 2005 (obviously late) with lost earnings calculated and deposited as well. The owner of the company has refused to pay the 2004 SHNEC that is owed to the participants despite our repeated and well documented attempts to get the $ from him.

Recently, he shut down the company and wants to terminate the plan. We finally convinced him that he needs to deposit the SHNEC before he can terminate the plan (or things are going to get ugly, very soon for him). He would now like to take the money out of his own account in the plan to pay for the missing SHNEC and lost earnings (he has pleanty of money in the plan to cover this amount).

My initial thought was to let him take a taxable cash distribution from his account. He could then turn around and pay it back to the plan. One concern of course is allowing the owner to take a distribution prior to receiving the final determination letter. Particularly, when the plan does have the late/missing SH contributions that will affect qualification. Would you allow the distribution? Other alternatives or concerns?