Hi everyone!

Stupid question from my neck of the woods.....

If an accountant performs a limited scope audit, is it possible for them to issue an unqualified opinion? I was always under the impression that any limited scope audit could only issue a disclaimer, since they didn't look at/test the procedures at the financial institution.

Thanks!!!!

Vicki

Hi! I'm new to the board, but had a question about Cafeteria Plans...specifically concerning the entity that oversees Cafeteria Plans in the State of California. In most states, the DOI is the chief entity responsible for 125's, but in this case, the DOI reps that I've spoken to in CA are clueless. The last one I spoke with said she had been with the DOI for 30 years and had never heard of a Cafeteria Plan. Extremely discouraging!!!

I'm trying to find out what licenses are required to conduct 125 business in the state. I would really appreciate any and all help you all can provide. Thanks so much!

Do all plans need an amendment for Retroactive Annuity Starting Dates (by the end of 12/31/05 I believe) or is a RASD an optional design feature to where if the plan doesn't provide for a RASD there is no amendment required ?

I have a client who is interested in using IRA funds to help purchase a business. I am somewhat familiar with the prohibited transaction and UBIT considerations, but I'm sure someone has much more experience than I do. Would it be better to have the new company set up a one-man 401(k) plan that invests in qualifying employer securities or have a directed IRA hold the shares directly (via Swanson)? They want to use Guidant, and I'm skeptical of almost eveyone. Please point me in the right direction. Thanks.

According to http://www.wtplaw.com/News/articles.asp?NewsID=287

BEWARE OF TRANSMITTING SOCIAL SECURITY NUMBERS – HOW MARYLAND’S NEW SOCIAL SECURITY NUMBER PRIVACY ACT MAY AFFECT YOU AND YOUR BUSINESS

01/25/2006

Jennifer Ryan Lazenby

Maryland’s new Social Security Number Privacy Act became effective January 1, 2006. The Act prohibits, among other things, the public posting of an individual’s Social Security number or the public display of an individual’s Social Security number. Very few employers or businesses actually contemplate posting Social Security numbers for the public to see, so at first blush the Act may not seem relevant to your company.

The Act, however, is also directed at normally private actions that may become “public” through a breach of security. Transmitting an individual’s Social Security number by mail, facsimile or over the Internet is also prohibited.

Practically, the Act will have a huge impact on Maryland businesses, probably far greater than ever expected by the legislature and the general public. The use of Social Security numbers is prevalent in today’s society. Social Security numbers appear on insurance cards, credit reports, tax returns and employment applications.

There are some exceptions to the Act, including the use of an individual’s Social Security number if required by State or Federal law. Moreover, continuous use of an individual’s Social Security number may be permitted under certain circumstances if the user provides an annual disclosure informing the individual of his/her right to order, in writing, that the use of his/her Social Security number stop.

Although the Act does not specifically define how violators will be punished, precautions should be taken to avoid civil liability and to protect the identity of your clients, employees, etc.

If you use Social Security numbers in your business, provide the holders of the numbers written notice of the Act and inform them of their right to opt out of such use.

Evaluate the effectiveness of your internal procedures.

Make employees aware of the new law and regularly verify that your internet connection is secure.

If possible, recode your records to use only the last four digits of Social Security numbers.

Require an individual to complete a waiver if he/she asks you to forward information containing his/her Social Security number to third parties.

The above outline is intended only as a broad overview of The Social Security Number Privacy Act applicability and does not constitute legal advice.

I remember laws being passed that kept firms from printing Social Security Numbers on statements etc. However, it seems to me that this goes way beyond that. Do Maryland clients need to start using employee identification numbers when sending information via fax or internet?

Our clients send in census data, contributions, etc. using the SSN as the identifier.

Thanks,

Stephen

Brother owns 100% of company and has his sister working as the only other employee. Is the sister considered an HCE for purposes of testing in a solo 401k?

Does a plan have to specify in the plan document that it uses the early participation exclusion option in IRC 401(k)(3)(F) or 401(m)(5)© in order to make use of those options in performing the ADP and ACP tests?

Does an ERISA 403(b) plan with a matching contribution subject to the ACP test have to specify in the plan document that it uses the early participation exclusion option of IRC 401(m)(5)© in order to make use of that option?

I am 17 and want to start a Roth IRA. I’m working and want to invest $3000 into the Roth IRA. I plan on contributing $3000 - $4000 each year. I’m not going touch my money till I’m 60 unless I need to for a house. I’m in it for the long term. What Bonds or Stocks do you suggest I invest in? If I want a stock Roth IRA would DOW INDUSTRIALS be a good choice?? Or would NAZDAQ be a good choice? Please give me your opinion on a safe but good in tress rate stock. Thanks any information is appreciated deeply.

A participant wants to take out a hardship distribution for a lease / purchase of a primary residence. We've got a copy of the lease / purchase agreement where it looks like it is a lease agreement for the first 12 months with the option to purchase the residence after 12 months. Does this qualify for a hardship distribution for the reason of purchasing a primary residence even if the purchase will not take place until one year later?

In order to take advantage of shifting QMACs to the adp test or borrowing elective deferrals to the acp test, does a plan need to contain language in order to do so? Most plan documents I have seen contain language which defines how an ADR or ACR is calculated and what money types are to be taken into account respectively, but because it is a testing methodology I am not sure it needs to be defined in the document.?\

thoughts?

For the umpteenth time over a period of years, we've been solicited by a firm that claims it can reunite terminated participants with their long-forgotten benefits that are currently held by "government agencies" and are just waiting to be picked up. We figured they're talking about the PBGC. Their literature does mention a hefty fee that will only be paid from the distributed benefit resulting in no "out of pocket cost to the participant". I'm guessing their fee isn't predicated on the participant signing a promise to pay after receiving a distribution, as the cost to chase down non-paying participants would be huge. Would they have a deal with an investment firm that'll pay them the fee once they get the investment? Even if they themselves are some kind of investment firm subject to SEC rules, how can they legally charge a fee that's far in excess of what similar firms charge for fees, commissions, etc.? Of course, their literature doesn't have a phone number.

Client is an October 31 fiscal year end plan... When calculating the RMD, I can use the plan year end balance, correct? Do not have to determine what is in the plan on December 31.

I am creating a service proposal for a new client. The client currently has one investment option available to participants for all pre-tax contributions. It is a privately held fund. The current provider has assured the client that the plan in compliant with ERISA 404© requirements regarding a "broad range" of investment options. I'm not sure that is the case. Does anyone have any input?

A doctor (an only employee of his own practice) would like to set a retirement plan for himself. He also teaches at a hospital where he contributes to their 403B.

Can he have contribute to 2 plans simultaneouly, 403 B and SEP or Simple ?

If the answer is yes, are his contribution limits restricted in EITHER plan, due to participation in BOTH plans?

We recently took over a plan with a difference between the SPD and the plan document for accrual requirements. The SPD has the safe harbor last day or 501 hours if terminated allocation conditions. The plan document has last day and 1000 hours allocation conditions. Normally I'd say the plan document rules, but the SPD indicates a more generous allocation requirement and is what the participant actually received about the plan. Any suggestions on how I would resolve the difference in allocation conditions?

A friend's mother failed to recieve her RMD in 2005 with respect to her IRA. On page 50 of Publication 590, the IRS provides that in order to request a waiver, Form 5329 should be filed with Form 1040, that the excise tax be paid, and that a letter of explanation be attached. However, Reg. section 54-4974-2 Q&A-7 does not require that such tax be paid in order to request a waiver.

I have the following questions:

1. Should the 50% excise tax be self-imposed and paid with mom's 2005 Form 1040?

2. As a practical matter, how lenient has the IRS been in waiving this tax (In past years, mom has always taken the RMD, but in 2005, she misplaced and forgot about the inquiry she received from the IRA trustee).

Thanks.

This is probably a dumb question but I have not seen much direct discussion of this topic and am hoping somebody can direct me to guidance in the proposed regulations.

If a terminating employee receives accelerated vesting of stock options or similar non-cash enhancements as part of a severance package, should the value of such accelerated vesting be calculated basically the same as accelerated vesting be calculated under 280G in the event of a change in control? Is there any argument that such accelerated vesting benefits should be excluded for purposes of determining whether the individual is within the 2 times comp or 2 times the 401(a)(17) limit?

Also, am I reading the "in addition to" provision in the proposed regulations correctly that the $5,000 de minimis payment provision in 1.409A-1(b)(9)(iv)© would be in addition to all the other severance benefit and reimbursement calculations? For example, could a terminating employee get 2 times 401(a)(17), continued health care coverage for 6 months, PLUS up to $5,000 in value related to accelerated stock option vesting and still come within the safe harbor? Seems to me the de minimis rule should be that notwithstanding any of the above exceptions any separation pay or benefits that are not more than $5,000 per year would be excluded from 409A regardless whether they are covered by one of the standard exceptions.

I would like to know if the ERISA Plan Asset Regulations requiring timely deposits to a participants account would also apply to timely transmittal of insurance premiums to the carrier for my Universal Life Plan.

Thanks in advance.

I keep reading about 401k and roth ira but I am still confused what I should be doing. I am married and have a 401k, but I am wondering if you can have a roth ira as well. I don't really see the difference in benefits other than you either pay taxes now or later. Should I have both or roll over my 401k into a roth ira? Please help me understand!