Does anyone know of any authority other than Tres. Reg 1-410(b)-1© that discusses the determination of whether retirement benefits were the subject of good faith bargaining for the sake of excluding employees under a CBA?

2005 Calendar year plan using current year testing methodology.

Company A & B are owned 100% by the same person and are all covered under one 401(k) plan.

On 9/30 Company A is sold (equity interest) 100% but continues to sponsor the current plan. Company B is spunoff into its own plan as of 10/1.

Question: Can we test Companies A & B as separate plans, due to the coverage change or do we have to included Company B's employees up through 9/30?

Calendar year plan. Company A & B are 100% owned by 1 person. On 9/30 Company A is sold (stock) off but continues sponsorship of the existing plan. Company B employees and their account balances are spunoff (still owned 100% by same person) to another plan.

Question: As there appear to be no separation from service for either Company A or Company B employees, how would adp/acp testing look like for 2005?

I had a client ask me this...

Voluntary Long Term Disability, Life Insurance & Accident plans that employees pay through pay roll deduction. Statement from insurance company identifying the contract and broker commissions paid.

Since this is voluntary and employee paid, what if any reporting obligations do they have?

Is there an understandable source out there that can lead me through the questions that I need to ask the client to determine if they should file? I have so little contact with health plans that I haven't a clue.

Thanks for any help that can be provided.

An employer plans to hire a sales person. The employer is planning to offer this person a substantial sum of money to be paid over 10 years AFTER the employee terminates service in exchange for the book of business he or she builds up over the years.

Is that a nonqualified deferred compensation arrangement -- or a non-compete agreement?

or would I need to consolidate the loan used for the first residence into the loan to purchase the new residence?

I have a governmental client that would like to offer an increased monthly retirement benefit (flat dollar amount) under its defined benefit plan to any retiree who elects (while retired and in pay status) to receive a lesser prescription drug benefit under its retiree health plan. Because the pension plan is a governmental plan, I do not see any pension nondiscrimination issues. However, this looks like a cafeteria plan election to me (choice between cash, albeit paid under a pension plan, and a nontaxable health benefit). Should the employer's cafeteria plan (in addition to its pension plan) be amended to provide this election? I do not believe this proposal violates Code section 125(d)(2)(A) (cafeteria plan cannot provide for deferred compensation), because there would be no election to defer compensation--retiree can simply elect to receive additional compensation if he/she is willing to accept a lesser prescription drug benefit (higher co-pays). Can anyone think of a reason why this will not work? Does the fact that the cash payment will be made under the pension plan (rather than directly by the employer) cause a problem?

An urgent request for help from the estate/trust/pension professionals out there:

Is the named beneficiary of a testamentary trust, established for a deceased participant's pension assets, permitted to step into the shoes of the participant and remain in the plan, or is the trust itself the beneficiary.

Very small employer wants to look into setting up a 401k for 2005, here in the last week of December!!! There's only about 5 employees (3 of which are HCEs) and the objective is for the owner to take a big bonus and defer some/most/all out of it. Lots of mechanical problems obviously, but lets assume that the plan can be adopted as soon as today, and that investments are chosen and ready to go. If only the HCE chooses to defer, then this won't work (failed ADP test). Could a massive QNEC to NHCEs only solve this problem? Alternatively, let's assume 1 or both of the NHCEs agree to have some of their bonuses deferred and there is room for the HCE(s) to contribute. Would this be acceptable? Would 401(k) comp. have to be limited to earnings paid on or after 12/19/2005? This is pushing the envelope but is their anything inherently wrong here?

Thanks

I am a little confused. I've read that 403(b) plans are subject to the automatic rollover of mandatory distribution rules. If the participant already owns the contract what would there be to rollover? Thanks for the help.

I asked a similar question as this before, but I want to be clear.

Situation:

A plan defines a year of service as 1,000 hours & a break in service as less then 501 hours. The plan has a 9 month eligibility, no hours requirement, and semi-annual entry. The plan does not require the participant to work a consecutive 9 months of service. A participant is hired on 2/15/05, terminates 5 days later on 2/20/05, and is rehired on 12/20/05. Does the employee enter the plan on 1/1/06 if he/she is still employed?

For the fiscal year 2004 I contributed $3000 to my roth IRA. When filing with my husband (we just got married), he informed me that I was no longer eligible to contribute to my Roth IRA and had to convert to a regular IRA. He filed our taxes as if I was contributing $3000 to the regular IRA. I was reading that the deadline to recharacterize was April 15, 2005 unless I had an extension, which would have made the date October 15, 2005. Of course, all these dates have passed, so a representative at my investment firm told me that I had to do a return of excess contributions and pull this money out of my Roth IRA, pay excise taxes of 6% and then file a form 5329. Is this the correct procedure, if yes, should I still see a tax specialist or just do this. I know there is a special calculation to figure out how much to pull out of the funds.

Thanks in advance for any adivce

Self-Insured Health Plan with Participant Contributions Through Cafeteria Plan -

We understand that Tech Release 92-1 and preamble to plan asset regulations won't exempt participant contributions from self-employed (sole proprietors) from trust requirement because they are not under a cafeteria plan.

What do people do? Wouldn't a trust for just these contributions ruin using 92-1 for the cafeteria plan contributions?

We know that if a Hurricane Katrina victim wants to take a Hardship withdrawal that they do not have to pay the 10% penalty. (IR-2005-96 under 7508A of the IRC) Pretty much all of our plans have language in place to accommodate that. The question is, If a participant terminates, do they still have to pay the 10% penalty or does it go back to the above regulation????

Are you still allowed to do a bottom's up QNEC, or were there rulings that eliminated this option?

Suppose I want to draft a new plan document allowing for the bottoms up, can I use it or are they not existent anymore?

Thanks for some reason I thought I heard something about this option going away, but I cant remember?

I had a similar problem earlier, but now the opposite way:

A corporation (S-corporation) owned by a single person is being dissolved.

Can the 401(k) plan be maintained as it is by just changing the sponsor (by corporate resolution and signature of the sole proprietor) to the sole proprietorship (= the former shareholder of the corporation)?

If yes, is there anything else to consider?

Thanks!

Can an individual who is covered by a 401(k) at their "day" job and contributes the maximum allowable to the plan (assume $15k) and also has a sole proprietorship establish a SIMPLE IRA to reduce their self employment income?

A response at page 43 of this "Governmental Plans" section states: "Federal Disclosure to Participants and Beneficiaries rules do not apply to governmental plans." Does this flow from ERISA's general exemption of gov't plans, or is there more specific authority for the proposition? Also, am I correct in inferring that a governmental plan does not need to distribute a summary annual report to participants? Thanks in advance for your responses.

If I set up a Roth IRA Dec 30, 2005, does my 5 year waiting end 1-1-2010??

I'm 58

Same question essentially for a Rollover Roth IRA????

Assuming I have a Roth Rollover account and I want to roll over 401k's (I have a couple) does the 5 year waiting period start from EACH rollover????

Thanks for any help

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