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!

Hi. At one point, I knew where to go to find a listing of the over the counter items that could be reimbursed. Can someone let me know where this is? Pub. 502 does not list specific items.

Thank you very much!!

Background:

Old MP Plan combined with Old PS Plan to get max deductible. In 2002, we implemented new allocation method using Cross Testing in the Profit Sharing Plan and terminated the Money Purchase plan the same year.

Current:

Left with only a Cross Tested Profit Sharing plan. The current plan is using the Accrued to Date method to pass the testing. We are trying to determine if old Money Purchase contributions and account balance that was paid to the participants prior to 2002 should be included when determing the employer account balance under 401a4.

Any thoughts would be appreciated

Thx

A father owns 100% of his corporation A, and he employs his 3 kids there now (all over age 21). He plans to start another corporation with his 3 kids - Corporation B. The kids will own none of Corp. A, but will each own 17% of Corp. B, with their father owning the rest of Corp. B. The father and the kids will work for both Corps, receiving compensation from both.

I think the father does not have two 415 limits due to having direct ownership in both corps, but what about the kids? Do the attribution rules also prevent them from having two 415 limits?

I've posted before and have appreciated all of the comments and suggestions. I currently make transfers once a year from my TSA at AXA Equitable to a 403b(7) account at Fidelity; I have been doing this for several years. I know the ability to make these transfers will end in January, 2007 if the current timetable for the proposed legislation holds. In the future if I want to transfer the existing funds from Fidelity to another vendor will I be able to or does the elimination of the 90-24 rule mean that the funds must stay at the previous vendor (in my case, Fidelity)? Thanks for taking the time.

PS I'm also in the process of trying to lobby my district get Vanguard on our approved list of vendors.

I have an IRA from which I get a distribution every month. I intend to take my minimun required distribtion with the first two months payments (I am over 71), then rollover the next two months payments into another IRA (within 60 days). I will not be able to do another IRA rollover for one year.

QUESTION

Can I immediately do a rollover of subsequent payments to a Roth IRA?. Since the Roth IRA rollovers do not have a one year waiting period, can I continue to make rollovers to roth IRAs every month or two during the year?

BobH

In the poposed 415 regulations, post severance compensation paid within 2 1/2 months after seperation from service can be counted for limitation years on or after January 1, 2005.

Am I apply the guidelines correctly?

A participant terminated December 28, 2004. On the 2005 census provided by the client, this participant has the same termination date, zero hours reported, salary of $300, deferrals of $25 and match of $5.

Do I change the termination date to 1/1/05 and include this person in my ADP/ACP test???

Your thoughts would be greatly appreciated.

Does IRC 105(h) apply to governmental plans?

I can't find an exception, but I have a diificult time understanding why Congress would want to apply 105(h) to governments.

Client pays out a former participant in 2005 and pays 80% as a lump sum. Doesn't remit the 20% withholding to IRS. To date, no 1099-R or 945 remitted. What to do?

I have a 125 cafeteria POP with over 100 participants - do I have to file a 5500 or is this considered a "pure fringe benefit plan? Is this a gray area or am I just overworked and underpaid? I have been hours trying to figure this out.

We have one client whose welfare benefit plan is funded by insurance and a veba. We are confused as to how to report this on F5500. If I'm understanding this correctly, there is only one F5500 filed and we would select the "Funding and Benefit Arrangements" at Line 9 as Insurance and Trust? Is this correct? If so, what detail is needed for the trust? We have Schedule A for the insurance but what would be needed for the VEBA (trust) portion? This would be schedule H or I, correct?

I posted this question at 401k forum but didn't get any replies. I'm hoping for better luck here. I searched the boards for this and found something that might help, but I'm hoping to get some further clarification. Plan document says that compensation is only counted from date of plan entry. No problem there. The problem is for the partners w/ K-1. How do I determine K-1 comp for only 6 months or 3 months of a Plan Year? Another post indicated that a partner (actually I think it was referencing a Sole Prop) has only one payroll period, 1/1-12/31. Does this mean that ALL of the compensation was earned on 12/31 so if the partner entered 7/1 or 10/1 his entire K-1 is entry date comp? Any thoughts are appreciated.

I just read an old post about a disability benefit becoming 411(d)(6)-protected (i.e., not ancillary) to the extent it is greater than the "qualified disability benefit," which is described in 411(a)(9) as a disability benefit that does not exceed the benefit which would be provided for the participant if he separated from service at NRA.

For this purpose, do you simply compare the actual monthly disability benefit payment to the actual monthly retirement benefit payable at NRA, or is this a more complex, total benefit/actuarial calculation?

A DB plan was add late in 2005 to an existing 401k-PS plan and it's intended to be permissively aggregated for testing and subject to the gateway (don't qualify for the exemptions from gateway). There were some modest match contributions made on a more liberal basis (eligibility wise) than exist for the PS plan or DB plan. Do the participants that got these token match contributions but who are not eligible for the PS or DB contribution/accruals have to get the 7.5% gateway ? Or is the fact that 401(m) testing on match contribution is mandatorily disaggregated from the general 401(a)(4) test enough to avoid giving them the 7.5% gateway (on an aggregated allocation basis) ?

I posted this a little while ago on the HSA forum and thought someone here might be able to help, too.

My company will be implementing a high deductible health plan at annual enrollment 7/1. We will have two carriers nationwide because of network access in various parts of the county. We will have a $1,500 single deductible/$3,000 2 party or family deductible. After the deductible is met, there is a 80%/20% coinsurance until the OOP maximum is met.

Recently one of the carriers came to us and said because of regulations governing HDHP in order to allow an HSA with the plan, the deductible must work differently than what we thought. According to the carrier, if you have a family of 3 and one person has $1,600 in claims, benefit co-insurance will not begin for that individual because the family deductible of $3,000 has not been met.

Can anyone confirm this or provide the legal site for this?

thanks in advance for any help you can provide.