I'm not sure which forum is most appropriate for this question. We have a plan that was a controlled group. Two of the participants (owners of each entity) participate in both plans. Ownership has changed such that there is no longer a controlled group so we are now going to go to a multiple employer plan. I understand that TH status is determined separately for each employer in the plan. My question relates to these owners who have balances from each of these former control group members. How do I allocate these balances to the new separate entities for TH computation purposes? Do these prior balances actually come into play at all?

Can someone help interpret the answer to Question M-19 under 1.416-1 regarding matching contributions treated as minimum top heavy allocations? The last sentence of the answer states that the contributions must meet the nondiscrimination requirements of 401(a)(4) without regard to 401(m). If a plan provides a 50% of deferral match up to 6% of comp in a traditional 401(k) plan, i assume that this meets 401(a)(4) because it is a unifiorm formula and is not discriminatory, but after reading the Q&A of M-19, i'm not so sure that the match doesn't have to be general tested. Thanks.

I know that gains from an excess contribution are taxable, but I think this scenario might be a bit different than usual.

I have a cash account at a brokerage designated as a Roth IRA. I use this account to buy and sell stock.

Since this is a cash account (and adding margin privileges would void the IRA), Regulation T compliance is especially important. My question is, how are gains on the sale of securities taxed when there is an excess contribution made in order to comply with Regulation T (where the contributions are subsequently withdrawn on the settlement date)?

In other words, are the gains 'attached' to the excess contribution (and thus required to be withdrawn and taxed) or are they attached to the (unsettled) proceeds from the original sale?

My opinion is that since Reg. T's Free Rider stipulation concerns the amount of time that banks are permitted to settle the proceeds from a sale of securities, any excess contribution made to cover a purchase does not produce the gain from the 2nd sale, but the contribution is made in order to cover a position in case the funds from the original sale are not *available* to make the 2nd purchase.

Seems to me that the excess contribution is an insurance policy against the possibility of funds not clearing in time, but that the gains from the transaction are the result of a sale that uses albeit unsettled funds.

If I were to make an excess contribution in order to avoid a free ride, could I then withdraw this contribution without the gains from the sale being taxable?

Failing this, can the gains be pro-rated in some way between the unsettled funds and the (excess contribution) extra contributed funds involved in the purchase? Perhaps at the time-value attached to the extra contribution in lieu of the bank marking up the unsettled funds to settle at the speed of the transaction rather than the 3 day period (or perhaps this isn't possible under regulation T, that 3 days is 3 days, period)?

We have a self-insured medical plan. An ex-Exec (who is also continuing to work for us a 1099 Consultant for a period of 5 years) is coming off COBRA

As part of an agreement when he terminated employment, lifetime health benefits to he & his spouse on same conditions as a continuing active Exec were promised in wriiting

The COBRA 18 month period saved us from having to search for other medical coverage equivalent to our current group plan

Our benefits attorney recommended not continuing him on our self-insured plan for discrimination reasons under 105(h)

He turns age 65 end of this year. We have a fully-insured retiree plan we can put him on then but problem is spouse is only 56 and can't join that plan until she is Medicare eligible, basically another 9 years

Am finding it difficult to get group coverage for just 1 inviidual. Individual conversion plans don't have RX coverage or medical coverage similar to group plan is really hadr to match. Am looking at executive supplemental medical reimbursement insurancepolicy to suppllement

How have others handled this situation?

Would anyone have an RFP to do a search for a Trustee

thanks

I was wondering if anyone would know the best place to open a Roth IRA. I mean, I guess it would be easy to go to a bank or even easier to find a place online and I'm sure any bank or broker would love to take my money for a Roth IRA. I have a couple of specific questions:

1. Is it safe online? Or is it better to go somewhere where I can physically walk in the door?

2. Will I dump thousands into this fund and one day, 20 years from now, wake up and the company and my $ are gone? Is there any safeguard against this? Is one company more reputable than the next.

Any advice and/or tips would be greatly appreciated.

Tanks in advance.

Is it permissable to contribute to botha simple plan and a SEP plan in the same year? My wife received a bonus in January with which she contributed the yearly contribution limit to her Simple Plan. Now she is leaving that company and starting her own, so she is going to set up a SEP for herself. Will she be limited in what she can contribute to her new plan?

Thanks,

Janice Wegesin’s 5500 Preparer’s Manual states, enter the complete legal name of the corporate trustee, the names of all trustees, or the complete legal name of the custodian of the plan on line 1a of Schedule P. Usually one trustee is authorized to sign.

Someone in our office went to a seminar (cannot remember who sponsored it) and remembers hearing, if you have more than one trustee for the plan, separate Schedule Ps should be prepared for each trustee because it is not a good idea to have only one trustee sign.

Can anyone give me a reason why having only one trustee sign Schedule P would not be a good idea?

Hi,

I have a question regarding the addition of the coverage testing information on the Schedule R.

If a defined contribution plan made no distributions during the year, is exempted from Part II, and is eligible for one of the coverage exceptions, does the Schedule R need to be filed? The instructions are not clear to me. It appears the form would be blank in this situation.

Thanks

I think I have a pretty good grasp of the case law with respect to SPDs that are inconsistent with plan documents, which often times results in the SPD controlling. But what happens when an offer letter includes incorrect information about an ERISA plan? My first impression is that the employer may have some liability, but since the offer letter is not a plan related document that any liability would stem from a state breach of contract claim rather than an ERISA claim. Any thoughts?

Joe is a participant in his 401(k) plan. His plan entry date was in 1990. He leaves for military duty in February of 2004. I am completing the ADP/ACP tests for the period of 1/1/2005 to 12/31/2005. Joe has no compensation and no contributions in 2005, as he is still completing military service. Is Joe included on these tests with zero salary and zero contributions?

We have a client who contributes 50% of the cost of health insurance, single or family, the employee pays the difference (50%) pre-tax. The president of the company negotiated a contract (this is a non-union employer) with two of its employees to ay 70% (ee pays 30%). The agreement occurred mid-year, off cycle with the Section 125 plan. We disagree with the employer in allowing two participants to maintain different contribution levels for the exact same coverages that the rank and file split 50/50. Wouldn't this fail the 80% test, or any other C&B test? These are HCE's too.

Has any changed their benefit arrangement from a traditonal compensation structure to a fee for service? If so, what does the fee usually run? Is there a "measuring stick" say of 10% as used in the P&C world? Any assistance, or resources is greatly appreciated.

are match scp violations included or excluded in the acp test?

This year's Grey Book from the EA meeting had several questions on optional forms and I believe at least one of those questions referenced final regs under 411(d)(6) - does anyone know how you search for these regs ? - I tried on the CCH website to no avail ???

Hope there are some NJ experts out there!

In January, the acting governor signed into law a bill that would amend the insurance code requiring any group contract issued or delivered in NJ after May 12, 2006, to cover children until age 30 provided certain qualifications are met. As we read it, the law requires the the employee or "child" (if you can call a 25-30 year old a child) to apply for this coverage in writing to the insurance carrier and pay necessary premium to the insurance carrier. The benefit then provided are identical to the group plan and employers are not required to contribute to the cost of coverage for these overage children.

Employers are, however, obligated to notify the employees of the law immediately before its effective date (May 12) and when any child would age out of the plan otherwise (we use age 19 and 23 for full time students). My question is this, we currently have several fully insured HMO's in the state of NJ that provide coverage. Our plan renewal date is 7/1, after the effective date of the law. However, as of 7/1 we will only be offering a self-insured national plan. Are we still obligated to send out a blanket notice of the law to all NJ employees even though it will never apply to our plan?

I received a call from a client today asking about the Special Tax Notice. I met with them recently to amend the plan to allow Roth deferrals and now they are asking about the Special Tax Notice because it says specifically that you cannot roll over benefits to a Roth IRA. My client pointed out this could be very confusing to some participants. Has anyone else thought of this? Is there an updated Special Tax Notice?

Don't know why, but I had it in my mind that the PBGC was required to respond within 60 days to a notice of reportable event. Of course, I now cannot find any reference to such a requirement and, in fact, have not run across anything that places any duty on the PBGC to respond.

Any practical experience with when and how the PBGC responds to reportable event notices? Is anyone aware of any requirement that the PBGC respond within a specific time frame to such a notice?

Thanks!

Registered member #15,000 today.

no prize? no baloons?

again, thanks for maintaining the site!

plan's NRA is 65, does not allow for in service distributions and has no early retirement provision. owner, age 62, wants to rollover a portion of his account to an ira and remain a participant in the plan. should the plan doc be amended to incorporate an early retirement age of 60 or add an in service distribution option? wouldn't the latter open up the possibility of more participants removing funds rather than those who have just reached age 60?