Does the deduction limit for terminating PBGC covered plans include deduction of termination liability in excess of the PBGC guaranteed limt? Or only up to the guaranteed benefit limits?

Within a controlled group there are two companies (brother-sister companies) with separate qualifiedplans. Company-one freezes contributions to its plan, and participants are permitted to transfer their balances to Company-two, and participate in that plan.

Mr. Doe is 63 years old. He wants to transfer his account balance from the Co.-one plan to the Co.-two plan and continue to participate.

Can he do this, or would it be considered a distributable event because he is over 59.5?

Client currently sponsors a Profit Sharing with MPP rolled into plan and wants to add a CODA feature. The plan purchased an LP about a year ago as an asset registered to the profit sharing plan. Their current document does not allow for any loans or inservice withdrawals; must be separated or retired in order to receive a distribution. In order to "fit" into a specific box for new administration; the limited partnership can not be part of the plan under the umbrella of services and the advisors is trying to figure out a way to eliminate the limited partnership. Is it possible for one of the owners to purchase the limited partnership from the plan, with his personal funds? Wouldn't this be viewed as a prohibited transaction? Any thoughts would be greatly appreciated.

New plan for 2005, existing company, are there HCE's in 2005?

This is probably a dumb question, but I just need to ask it. If you have a plan doing the basic SH match, can you also do a discretionary match at the end of the year? If so does the plan still qualify for ACP and ADP SH? My understanding is that you can give up to 4% of pay additional as discretionary match and still be SH.

I'm not sure where I think i saw this disccussed already, but does anyone know if the balance left in an HRA

plan (which rolls over to the new year) is "bookable"? i.e., does the employer have to pay taxes on this money? or is there "dispensation" under the new laws?

Company A buys Company B. Company B is now operating as a wholly owned subsidiary of Company A. Both companies currently operate 401k plans that mirror each somewhat. Both have immediate eligibility and full immediate vesting. Ideally going forward it would be best to just merge the two plans. Is the only option to merger B's plan into A's and A's plan will be the surviving plan? Or can A's plan be merged into B's? I was under the impression that merging B's into A's was the only option since Company A purchased all of Company B and therefore was the successor employer.

From the time a defined contribution plan files for termination, how long do the participants have before they must take a lump sum distribution out of the plan?

Participant has $60,000 account balance consisting of $50,000 in investments and $10,000 outstanding plan loan balance. Participant dies and daughter takes a distribution of the $50,000 cash. The loan is offset upon distribution.

The beneficiary has received a 1099 for the $50,000 she received, but what should happen regarding the $10,000? Should the 1099 be issued in the name of the beneficiary? Or should the 1099 be issued in the name of the participant? What code would be correct?

Thanks for any help.

Eligible employee was not given the opportunity to make salary reduction contributions to 401(k) in January, 2005. It is my understanding that the employer must make a QNEC in an amount equal to the average deferral for the NHCEs. (She is also an NHCE). Is that correct?

Also, is there anything we need to disclose on the 5500 about the omission?

Thanks.

With regards to 1.401(a)(4)-8(b)(1)(iv)(D)(2), it refers to "allocation rates based on age". Does this apply to plans with allocation rates based on points representing age plus service?? Thanks.

Can anyone confirm whether premiums paid under Aflac supplemental income policies for health related occurrences are permitted as pre-tax benefits under a Section 125 plan?

Company has a calendar year MP and SEP plan and they want to get rid of both. I'm told that the 2004 MP contribution has not yet been made (neither has the 2005, but there is still time for that). They will obviously have to fund the MP plan before terminating. Does this late deposit (for 2004 plan year) get reported on Form 5330 and is there estimated lost earnings that have to be calculated on it as well? Is this a plan defect that has to be reported via EPCRS?

Thanks for your help.

Hi! I'm planning to acitively manage my Roth IRA from now on and I was wondering if there are any tax consequences for actively selling and buying stocks with an IRA account.

Right now I'm invested in a mutual fund in my Roth IRA that I want to sell and then I plan to buy some stocks with this money. To my understanding, as long as I don't contribute more than I'm allowed to or take early withdrawals, I think I can actively trade without any tax consequences. I just want to confirm this before doing so.

Thank you in advance for any response regarding this.

Rotherford

If a company is putting in a new 401(k) plan, and it owns a 100% owned subsidiary company at the beginning of the plan year that it will own less than 80% by the end of the plan year, are the subsidiary's employees counted in the minimum coverage test for that year?

Plan is being audited and the employer wants to pay for attorney's fees leading up to audit using the plan. The fees the employer wants to pay from the plan are specifically the fees charged by the attorneys to review the DOL request, assistance of client in preparing documents, advice to client during the audit. It seems inappropriate, but it doesn't seem to fit neatly into the 'settlor' example categories highlighted by the DOL guidance in DOL Guidance Settlor v. Plan Expenses Hypotheticals or Advisory Opinion 01-01A.

Anyone have any experience regarding this or could point me to some formal or informal guidance from DOL. I'm advising against it, but I'd love any input you all could offer.

The ABC Company has a 401(k) PS Plan. The company is sold to John Smith as an asset sale. John wants to keep the plan intact.

What is the best option?

We have a situation wherein several years ago (5+) a participant requested and was denied disability benefits because she had not attained the requisite age at the time her employment terminated due to the disability. (this is a jointly trusteed plan) A union trustee now wants to reopen the issue claiming there are new facts - these facts were known at the original meetings, but the trustee is claiming she was unaware and/or misunderstood the information. Are there any cases out there or can somebody guide me to information which states that the decision back over 5 years ago is final and binding on the trustees and that the issue cannot be reopened? If the trustees can in fact reopen cases such as this, what prevents them from reopening and rehearing almost any other case?

Any guidance is much appreciated!

A DB and DC plan are aggregated for testing and coverage. The DB benefit is based on years of service and a high 3-year average. A person earns a year of service in 2004, enters the plan 1/1/2005 and then terminates 1/31/2005.

To determine her DB equivalent normal allocation rate for the gateway I am valuing the difference in the benefit earned during the year, so she had a $0 benefit at 1/1/2005 and a positive benefit at 12/31/2005. Of course I am valuing this benefit using the testing assumptions. For gateway, plan year compensation is used, so the result is that this person has an extremely high DB equivalent accrual rate, since she only had one month of compensation in the plan year.

So, I can certainly choose to average the DB equivalent normal benefits of the NHCE's who are benefiting and so this one little person is increasing the average by a lot. I have to believe I can count this person as benefiting even though they didn't meet the accrual requirements for the year because they did have an increase in the accrued benefit for the year. This goes to the position you can't have an accrued benefit prior to entering the plan.

Anyone see any flaws in this?

I can't find anything in the proposed pension reform legislation (H.R. 2803 or S. 1783) that discusses variable rate premiums. I know they are proposing an increase in the single-employer flat rate premium. Anybody know if variable rate premiums are proposed to increase, too?