a couple of foibles we discovered, without any fixes forthcoming from relius

You have to click on compute comp in match and safe harbor allocations to get those compensation fields to populate, even though you already have an eligibility transaction run.

When batch printing, we are getting 2 copies (hope they fix this)

otherwise havent had many problems

Hi,

I'm looking into starting up a Roth account and am 27. My question is, when you retire and start withdrawling from the Roth does it still earn an annual return? OR, when you start withdrawling, does interest stop?

-Matt

I wonder if anyone has knowledge or understanding of how court orders and QDRO's funtion. My divorce decree stated that my retirement plan was marital property but that any premarital portion was to be offset and the rest divided equally. The problem was that the other attorney filed paperwork to have the QDRO divided equally, without following the wording in the final decree.

Does anyone know what recourse I have to receive the premarital portion. Is there any relevant or existing case law that addresses this. Thanks

I was reading a webpage where the author of the page stated that businesses with partners can no longer use a form 5500EZ... Actually didnt state it that direct, but in essence that was the point conveyed. Is there a change for 2006 with regards to the form 5500EZ? The 2005 directions state that an EZ can be used with partners.

Thanks!

The regulations in effect as of January 1, 2006 state that, to remain except form ACP testing, all matching contributions must be allocated on a nondiscriminatory basis. Placing an allocation restriction, such as a last day rule or a 1,000 hours-of-service requirement, on any matching contribution provided by the plan is discriminatory unless all non-highly compensated participants satisfy the restrictions.

The plan I am looking at has the 3% nonelective safe harbor provision with an additonal discretionary match which has no allocation conditions for active employees but requires terminated employee to work 501 hours to receive the match.

Someone in our office is agruing this regualtion would not apply to this plan.

Your thoughts would be appreciated.

At what time(s) can the Negative Election - Automatic Enrollment be introduced to a 401(k) plan? I have a client that is a service company with participants scattered throughout the country on jobsites. We're trying to overcome consistently failing ADP tests.

It is common in the construction industry for employers to take Davis Bacon fringe benefit credit for dollars contributed to a welfare benefit plan (funded through a 501©(9) trust) for periods that the employee is not eligible to participate in the plan. For example, the plan requires completion of 300 hours before eligibilty kicks in, and the employer takes DB credit for the dollars contributed to the trust during that 300-hour period of ineligibilty (including where the employee never becomes eligible to participate because he terminates before eligibility). This contradicts the holding in DOL Opinion Letter No. 1253 (WH-201), February 28, 1973 (old law but I have found nothing later to contradict it). I recently had a DOL agent bring this opinion letter to my attention during an audit, but it does not seem to be followed or applied with any uniformity. Has anyone had any experience with this rule or are you aware of any subsequent guidance that holds to the contrary? Or, was I lucky enough to just get an especially well-read DOL agent?

I have a new client that has been audited for a plan year in which we did not provide service. But apparently, the client experienced some financial difficulties and suspended their discretionary match contributions beginning Jan. 01, 2003. Mid year, their finances improved and they decided to resume the match contributions as of July 1, 2003. Since the match was discretionary, they thought this was okay. However, the prototype document states that the match contributions are based on the "Plan Year" deferrals. So the IRS is saying the plan is disqualified.

Any solutions to this or creative suggestions we might use to disagree with the IRS's conclusion? any other suggestions?

Does an Indian Nation have any kind of Form 5500 filing exemption for a welfare benefit plan? Group has over 100 insured in medical, dental and group term life insurance as of the beginning of the plan year, and has for many years. They file for a 401(k) plan, but have never filed for their welfare benefits. I can't see any exemptions, only for governmental and church plans (and plans covering less than 100 participants). Help?!

Is there a logical reason the income limits are set so low ($0-$10,000) for phaseout of the ability to make a contribution to a Roth IRA for married taxpayers filing separately? Where is the potential for abuse?

A self employed doctor owns a C-corp. that sells software. The doctor practices as a self-employed physician, but also takes some compensation from the software business.

The doctor maintains a db plan that covers his income from self employment and his income from the c-corp. All employees of both entities are covered. There are 4 other employees, all working for the C-corp. The C-corp. by itself is not a professional services employer.

Do you think they are exempt from PBGC coverage because the physician owns the C-corp? What if most of the income came from the physician practice?

"A professional service employer is any entity owned or controlled by professional individuals where both the entity and the professionals controlling it are engaged in the performance of the same professional service" Since the C-corp doesn't perform the same service, I think I'm sunk, but I wondered if anyone else had another opinion.

This is kind of a picky, technical question about an example in the comparability regulations.

Under the comparability regulations, one can test a DC plan with a gradual age schedule using a minimum allocation rate on a benefits basis if the schedule satisfies one of two conditions. The second condition is Treas. Reg. 1.401(a)(4)-8(b)(1)(iv)(D)(2). There could be an employee in each age band with an allocation rate greater than the minimum allocation rate who has an equivalent accrual rate that is less than or equal to the equivalent accrual rate that would apply to an employee whose age is the highest age in the band receiving the minimum allocation rate. (I'm paraphrasing a bit.)

This provision is illustrated by an example in Treas. Reg. 1.401(a)(4)-8(b)(1)(viii)(Example 4)(vi). It states that the steepness condition is not satisfied because the equivalent accrual rate for an age 39 employee (the oldest employee receiving the minimum allocation) is 2.81% but that the lowest equivalent accrual rate for the oldest employee in the next band is 3.74%. Since 3.74% is not <= 2.81%, the steepness condition fails.

I think I understand the provision and the example, but I can't figure out how the IRS came up with exactly those figures (to make sure I completely understand the example). Has anyone figured out the standard interest rate and standard mortality table used to compute the 2.81% and 3.74% equivalent accrual rates in this example? I already checked The ERISA Outline Book and it didn't address this detail.

A company that we provide TPA services to for their safe harbor 401(k) plan has been purchased by another company, which has a SIMPLE. Some people have deferred (I am assuming into their respective plans) for the current year. The question I am being asked is can the SIMPLE be dropped and the SH 401(k) plan be adopted for everyone? What about new hires? These issues were apparently not addressed by the merger/acquisition lawyer that they used. My boss (who asked me to post this) knows that they can merge on 1/1/07, but she is concerned about this year.

The TPA firm that I used to work for was originally bought out in January, 2003, and we were required to stop contributing to our SH 401(k) as of the date of aquisition. We were then allowed to enter the purchaing company's 401(k) plan on the next quarterly entry date (which was 4/1/03). I would think that the answer to my boss' question above would be similar to the experience I had in 2003, but since I have never worked with SIMPLEs, I wanted to get some opinions. Any thoughts? Thanks for your help.

Does anyone know how much a Relius Administration license costs per user (defined contribution)?

Also, I'm wondering if other firms experience limitations on access to Relius, as employees. For example, we have a schedule, where we can only be on the system (without "squatting") at 3 intervals of 80 minutes. I'm trying to talk my boss into more licenses, so I'm curious to see if we're behind others or equivalent to others (I hope we're not ahead!).

Post 1988, hardship distributions of deferral accounts are limited to the dollar amount contributed. Prior to that point, hardship distributions could also be taken from investment earnings on the deferrals. Does anyone know if this change was due to a statutory change or a regulations change?

I found a reference to the restriction in 401(k) regs from that time period, but couldn't find anything in the code about it.

A plan has mandatory employee contributions, which will be returned to employee's beneficiary at his/her death if any remain. Normal form of benefit is 50%QJSA or single life annuity. Does anyone know how the employee contribution portion is credited against the annuity payments? Is the employee share "used up" before employer amounts are used? Or is essentially each payment pro-rata employer/employee, as taxable under Sec. 72 to the employee? This question has come up relating to possible overpayments under a plan.

I have a client that is a participating employer in a 401(k) multiple employer plan and the client will be withdrawing from the plan. Looking at the 401(k) distribution rules, the withdrawal does not appear to be a severance from employment for my client's employees, so this rule likely will not allow distributions to plan participants. Has anyone thought about whether such a withdrawal amounts to a plan termination for the withdrawing employer's employees (thus allowing distributions)? I cannot find guidance directly on point but it seems this must be the case or the employees would be stuck participating in the plan until age 59 1/2.

Thanks!

Plan a: 401(k) PS Plan

Plan b: DB plan

Plan c: 401(k) deferral only plan

Employee Group 1: All employees IN THIS GROUP are in both plan a and plan b and NOT in plan c

Employee Group 2: All employees IN THIS GROUP are in plan c ONLY (they are all HCE's)

Question: To determine the 25% of payroll, combined deductible limit for the combined Plan a and Plan b, can we include the payroll from Employee Group 2, or are we limited to the payroll for the participants in Employee Group 1 only.

I have a k plan that offers employer stock as an investment option (not an esop). If the employer pays a dividend on the stock, would the dividend have to be tested like a contribution, or is it earnings?

and, if the employees automatically reinvest the dividends, is that a contribution subject to ADP testing?

Thanks

I put an incident in, but they are so busy, it has been days...

I am trying to withdraw fees from a plan, and the "calculate fees" function is not including the plan loan balances when it is calculating the asset fees.

Does anyone know what I am doing wrong?

thanks!