Company A maintains a DB plan and a DC plan. Company A acquires the stock of Company B, which has a DC plan only. Must employees of Company B be given credit for their service with Company B prior to the acquisition under both plans of Company A, or can Company A disregard their pre-acquisition service under the DB plan since Company B did not have a DB plan?

I think this has been addressed, but here is a question.

Plan Doc has comp as a participant. Participant enters 7/1. Plan is 401(k) SH with Cross-tested formula. Plan passes cross-testing using 1/2 comp while giving 3% SH + 1.44% PS. However because of TH, the 3% of full comp is more then the above on 1/2 comp.

Am I correct in giving 3% of full, but cross-test using 1/2 comp?

Situation:

A participant's wife murders him, and is shortly thereafter convicted and sent off to jail. She is currently appealing her conviction. She was his named beneficiary for the 401(k) Plan.

Simple question: can she take the money out.

Follow up: Does the brother, as executor of the deceased participant's estate, have any claim to the money for the estate?

Further: If she is not entitled to the money now, but her conviction is overturned and she is cleared and released, would she then again be entitled to the money? Would the Plan Administrator be well advised to wait until the appeal is finished?

I've read a little bit about these "Slayer laws", but I am not clear as to what the ultimate answer is, if there is one. Any insight is appreciated.

A former Japanese owner of a business has now moved back to Japan and wants his balance in the DC plan wired out. Is there an exception to the withholding rules in this case?

Someone referenced a US/Japan treaty that gave us the ability to ignore withholding. Any ideas?

A prospective client wants to discontinue their SIMPLE IRA plan on March 31, 2006 and establish a 401(k) Plan on April 1, 2006. Is this permitted for April 1 or must they wait until January 1, 2007?

Also, can SIMPLE IRA money be transferred into a 401(k) Plan?

I have a client with a non-top heavy 3% safe harbor 401(k) plan. The plan is run on a calendar year. Eligibility is one year of service and age 21 with dual entry. The employer wants to change the plan to allow immediate eligibility and participation on the 401(k) portion of the plan. There is an employee that was just hired and he will make more than $100,000 in calendar year 2006, therefore he will be an HCE for 2007. He will be the only HCE in this situation; all the other new 401(k) entrants will be NHCE’s. He will enter the profit sharing and safe harbor portions of the plan on 7/1/07.

The question I have is this: Do you have to run an ADP test for the first half of 2007 for the otherwise excludable employees? Or, since this employee will enter the safe harbor portion of the plan on 7/1/07 he will become an includable employee who is receiving the safe harbor contribution (for the latter half of the year) and therefore would not have to be tested with the other excludable employees for the year?

Thank you for any input.

A small company wants to start a 401(k), but the employer is very much against the idea of a profit sharing contribution and does not want any PS language in the plan at all. He's OK with a match. My question then is can we prepare an otherwise regular 401(k) plan document with only k and match contributions, with no allowance for a profit sharing? And also, if the plan become top heavy (which is a good possibility), does that in effect mean that a PS contribution has to be allowed, since the 3% goes in as a PS contribution?

Thank You

I understand that a safe harbor 401(k) that has only deferrals and safe harbor match is deemed to be not top heavy. Does that mean that the document can not permit discretionary profit sharing contributions?

Let’s say a safe harbor 401(k) plan using the basic matching formula also permits discretionary profit sharing contribution, but the employer does not choose to make a ps contribution for a plan year…would that be deemed not top heavy since no ps contribution is being contributed?

Thanks.

Money purchase plan is holding retirement accounts on a handful of deferred, vested participants. All of these individuals are likely in their 80's by now. An IRS letter forwarding request was made, but generated only one response. Death audits have turned up nothing.

The Plan is silent on forfeitures. Do we make an amendment to the Plan and treat these accounts as forfeited (unless the participants resurface)? 1.411(a)-4 seems to open the door to this possibility.

Is it any "safer" for the Plan to turn the money over to the state? Ideally, the Plan would like to continue

to hold the money...if it goes to the state the money will eventually be forfeited.

Thanks for your input.

If you amend the 5000, are you required to distribute another SAR?

A client has decided to implement a 401k and safe harbor nonelective contribution. They want to have a 21 age and 1 year service requirement with an annual entry date of 4-1. (they are a fiscal plan) My question is can they do this or must they use semi-annual entry dates? Essentially, if someone hires in April, they have to wait almost 2 years in order to be eligible.

Please advise asap.

Thanks

We have a DB plan that offers the ability to repay a previous lump sum distribution in order to get back benefit service. Are there any notice requirements that we may need to follow with regard to this? As far as letting participant know this option is available to them when they come back, etc.....

Any help would be appreciated.

Thanks,

Fred

Last I heard, there has still been no final word on the document requirement for 403(b) plans. Has anyone heard anything? Are they leaning one way or another? Are they considering only requiring documents for 403(b) plans with employer contributions?

Thanks.

ajames

My client's plan "forfeits" the nonvested portion of the employer contribution account at the end of the plan year in which employment terminates. The forfeiture is restored upon the employee's return within 5 years, but only if the employee repays any distribution received.

This language has been in the plan for years, but till now it has never come into play.

A number of administrative questions pop up re the buyback: Does the employee write a check to the plan trustee or does it go through the employer--or is either method acceptable? Can (and must) the plan accept a rollover from an IRA to accomplish this repayment? If the repayment is after-tax, does the participant acquire basis in the plan account--and if so, does the plan have to track it and report it on a subsequent distribution? How is repayment treated on the 5500?

I hope someone who does these all the time can tell me how it ought to be done.

Is it allowed for a participant to take an inservice distribution from plan A (as long as plan As document allows) and roll it into another qualified plan (plan B) of which the participant of Plan A is also a participant? The reason is that the investment choices of plan B are better than plan A's choices.

This "rollover" can only be employer contributed $, not deferral correct? age issues? and finally, if the account is not 100% vested, how is that issue addressed?

Thanks!

Company has maybe 20 ees, including 3-4 HCEs. Changed from fiscal 4-1 to 3-31 year to short 4-1 to 12-31-05 year.

I know I have to pro-rate salary 210*3/4 or $157,500. Integrated, so level is same fraction (3/4). Looking for max contribution.

Question is, 415 dollar limit, and what's counted against it. Had a guy defer $14,000 in first three months of '05 that were in the year end 3/31/05 tests. Knock that off the $ limit?

Others deferred regularly.

I guess the questions are 404© limits (I think 25% pay for short period) and 415© $ limit (when a short year and deferrals in the calendar year). Allocation limits?

Any help would be appreciated.

Our client which consists of a controlled group sponsors a 401(k) plan. They acquired another company during 2005 which sponsors a separate 401(k) plan. One plan applies the current year testing method for adp/acp and the other plan applies the prior year testing method. Neither plan satisfies Sec. 410(b) coverage separately requiring the plans to be aggregated for adp/acp testing. However, with the issuing of the final 401(k) regs in 2005, wouldn't these plans have to be disaggregated because of the inconsistent testing methods? Or does this prohibition apply only for permissive aggregation of plans?

Has anyone considered what you will be charging to administer a Roth 401(k)?

I'm preparing a valuation for a one-man DB plan, where the participant files Schedule F (regarding profit/loss from farming). My understanding is that the income is calculated the same way as for Schedule C, with the circular calculation to reduce income by the contribution and 1/2 of the SE tax.

If the contribution is greater than the Schedule F income, does this work the same way as well--i.e. there is a carryforward of the non-deductible amount to be deducted (hopefully) in future years as allowed?

I am gathering information about the new laws and document requirements regarding 403(b) plans. I am also looking at a TPA for our 403(b) plan. Where can I find additional information about:

-403(b) Plans in general (news, updates, etc)

-TPA's who handle 403(b) plans

-the new document requirement for 403(b) plans

Thanks

ajames