1. Is there a problem in a pension plan purchasing real estate property in partnership with another entity who is not related to the plan sponsor/trustees?

2. Is there a problem if the real estate properties are bought and sold frequently (i.e. flipping the properties)?

How is the basis handled when the excess deferrals are miscalculated and participants received excessive refunds (are, in essence, overpaid) and must refund the overpayment of refunds back to the Plan?

To treat this as an after-tax contribution would mischaracterize the situation, but for participants to repay the amounts back into the plan would mean that they would pay taxes on these amounts twice, wouldn't it?

How are these amounts generally segregated out by a Trust?

A small business wants to start a Profit sharing plan for 2005. The company began in May, 2005. The only employees are the two 50% owners and the spouse of 1 of the owners, so we have only HCEs for 2005. I'm told however that (for whatever reason) all 3 individuals received no W-2 income at all for the year. Instead, they are being 1099d for all compensation paid to them for 2005. They will go to W-2 starting in 2006.

It's likely that more information is needed, but based on the above, do you think we can set something up for them for 2005? Does 1099 income prevent them from having any plan wages in 2005? Thanks for you advice.

This is regarding vestint for a rehired employee. Original hire date was 2/8/1999 - term. dated 6/28/2001. At the time of termination, the plans vesting was 100% after two years which because the employee worked 1,000 in 2001, he was considered 100%. He has now been rehired as of 8/2005. On 7/1/2001 the vesting for the plan was amended amended to a 5 year cliff. Document states anyone employed on 6/30/2001 will vest according to the original vesting schedule and anyone hired after 7/1/2001 will vest according to the amended vesting.

I know this participant's hire date needs to be adjusted to give him credit for prior service since he did not incur (5) one year breaks and he has been allowed back into the plan on his rehire date not having to complete eligibility again. But what vesting schedule should apply to him? Should he remain 100% Vested?

An individual is a 50% partner in a partnership that sponsors a SEP. This individual also has unrelated self employment income from a business in which he is the sole employee and 100% owner. He would like to open a SEP for that side business. What are the concerns for that new SEP (i.e. are the combined contributions limited to the 415 limit)?

New company started 4/1/05 by two shareholders each over 5% owner. New employee hired 9/1/05.

New Plan says all employees hired as of 4/1/05 eligible with no service requirement but all other employees require 1 year with over 1000 hours. Does this pass 410?

Can someone please let me know how I find my site ranking on google? Much appreciated.

Our plan allows for hardships for the purchase of a primary residence. Two employees (who are married to each other) have submitted hardship distribution requests from each of their accounts.

Earlier this month and prior to the settlement on their new house, they maxed out their loan options in each of their accounts. They have presented the Settlement Statement from December 9th as documentation to support the purchase of their primary residence. The transaction was finalized on that date and it appears that all funds were distributed at that time.

I do not consider this to be a true immediate and heavy financial need at this point. The settlement is not contingent upon the cash from the hardsip distribution - for all intents and purposes - it's a "done deal".

Am I right?

It doesn't help much to see on the front of the faxed request "We would like to request this due to a recent purchase of our first primary residence. We would like to have new appliances, and curtains and such."

I must provide guidance to our Plan Administrator and I'm relatively new to the 401(k) area of benefits. Any thoughts would be greatly appreciated.

The preamble to the 409A proposed regs say that a split dollar arrangment is not subject to 409A if it provides "only death benefits." What if the arrangment also provides for the payment of the underlying policy's cash value upon termination of the agreement and/or cancellation of the policy? Does this blow the exception?

An employer maintains a single employer collectively bargained defined benefit pension plan. A Pension Committee is the named fiduciary and plan administer of the plan. Under the plan document, the employer appoints members to the Pension Committee. The union has requested that it be allowed to appoint 1-2 union members of the Pension Committee (which would be a minority of the total members of the Pension Committee). Would this violate the Taft-Hartley Act because the employer does not have exclusive control over the plan or can the union appoint some members provided that the employer still dominates and controls the vote of the Pension Commtitee? The 2nd Circuit's 1968 case, Independent Association of Mutuel Employees of New York State v. New York Racing Association, Inc., 398 F.2d 587 has been crticized by other Circuits. Any help would be greatly appreciated. Thanks.

A calendar year plan is attempting to terminate in 2005. They have already distributed assets but apparently there will be dividends which post and will not be able to be taken out of the trust prior to 12/31/05. Can the 2005 Form 5500 be their last one or will they have to submit a form for 2006?

A Plan matches the first 4% of deferrals at 25%. The next 2% (up to 6% deferrals) are matched at 100%. Does this Plan need to be tested for Benefits Rights and Features? After all, everyone can defer up to 6% if they want do.

Can the BRF test be done on a disaggregated (otherwise excludible) basis?

How is the test corrected if it fails? Do additional match contributions

need to me made to NHCEs?

Thanks!

FTWilliam advertised on Benefitslink plan documents at very reasonable prices. Has anyone used this service and if so, any comments on the checklist, plan document, etc.?

I have read conflicting information regarding the eligibility of over-the-counter meds reimbursed through a HSA. Are they eligible?

When calculating a minimum distribution for a participant that has an outstanding loan balance under the plan, do you use the entire account balance including the outstanding loan balance?

Thanks.

Okay, sorry for what may seem like a stupid question, but I have to ask it b/c I dont think it works, but my boss for some reason thinks it does, here it goes.

401(K) Profit Sharing Plan with Prior Pension Plan Assets merged in.

All participants are still employeed with balances, can you draft something in the document that states all money will be rolled out of the plan into individual IRA's except the 401(k) money? I have never heard of such an idea before, considering everyone is consider "active". Any ideas!

If a partner of an LLC died during 2005, and his compensation will not be determined until 2006, can a 2005 deferral contribution be made at that time.

Thanks!

To the general administrator of the message boards,

I think it would be helpful to have a separate forum for 409A. This huge topic is generating numerous discussions (and will certainly continue to do so), but the discussions are scattered among various places on the message boards.

If a SIMPLE IRA participant earns $10,000 in w-2 wages, could he defer the full $10,000 into the SIMPLE IRA and get a 3% contribution from the business. This would mean the participant would actually have $10,300 put in for a year in which he earned only $10,000. Is this possible?

Participant is hired 3/24/04 works 1000 hrs and terminates 9/20/04.

He gets rehired on 6/6/05 and works the entire 2005 plan year, obtaining another 1000 hrs.

Would he become eligible 7/1/05 since he worked 1000 hr the first year and got rehired in 2005?