. . . for all of the participant's qualified employer securities portion of his account in cash? Does the note have to have adequate security like ESOP sponsors must procure in amortizing its put option pay out?

WL

koreambear@yahoo.com

I am wondering for the non-ESOP portion of a KSOP, would holding a note similar to the ESOP's put option total distribution + a 5 year note provision -- be a PT? In other words, are all parts of a KSOP subject to ESOP rules?

Corollary question: if a participant in a 401(k) has some closely held employer securities, upon lump sum distribution, could the Plan issue cash + a employer's note? Or, could a PT be avoided by issuing a lump sum in-kind distribution? But then how would the repurchase work?

WL

koreambear@yahoo.com

notice 2005-1 suggests that "to the extent that" an arrangement grants a recipient a right other than to purchase stock at at defined price and such additional rights allow for the deferral of compensation (for example, a tandem arrangement involving options and sars) the entire arrangement would provide for deferral of compensation. the proposed regs don't address the point.

can we design a fmv option/sar arrangement where there is no deferral and therefore be exempt from 409A?

A prospective new client has one employee (about the same age as the client). Client wants a new class allocation profit sharing plan for 2005 and wants max 42000 for himself and wants to give the employee something but nothing overly generous. Client says employee was paid $80,000 in w-2 and $30,000 in 1099 earnings for 2004 and will get about the same in 2005.

So how much do I need to obsess about this 1099 income.

On one hand, I say that 1099 income doesnt count and I should ignore it.

But on the other hand, I say that this $30,000 probably isn't legitimate 1099 income and should've been w-2 income.

On the other hand, If the client's accoutant said that this 1099 was ok, who am I to sugget otherwise.

Obviously for the client, if there was some way to include the 1099 for 2004, the employee would be an HCE and would only need to get 3% top heavy for 2005, otherwise employee as an NHCE will need to get like 17% for the client to get his 42000.

Is there any way I can include the 1099?

If I don't include it, do I need to do anything to cover my ***.

I would also like to know, in your expeience, what would be a real life example of an employer paying his employee both w-2 income and 1099 income legitimately.

Let's say that a plan has been amended and a SMM was given to the client to distribute to the employees. They hire a new employee and they want to produce a SPD that reflects the changes because they do not want to give the SMM to that new employee. Can you go into the plan document to make that change so that the SPD reflects the amendment?

Hi,

I have a long standing profit sharing plan and a separate individual k plan that was established a few years ago. The plans were never merged and 2 separate 5500 ez's are filed every year. I am over age 50 and therefore, eligible for the additional 4k catch-up.

It seems that I can put 25% of my compensation in up to 42k this year in the profit sharing plan and would have to put 4k into the individual k plan to max out at the 46k. Is this correct or can I put the 46k into the profit sharing plan?

I've also read that you may contribute up to 100% of "eligible compensation" to a plan. But I am unclear as to the meaning of "eligible compensation" and the relationship to the 25%. For example, if my wages are 46k, can I put the entire 46k into the profit sharing plan or am I constrained to 25% of 46k to the profit sharing plan and an additional 18k to the 401k?

Thank you for your help.

Steve

Company has a 6/30 pye for dental plan. Last october they switch providers. Old company provided Schedule A up through September 30. New company changed policy year from 7/1 to 10/1. I realize that for ease of recordkeeping I should have changed the plan year end to 10/1 back then...but since I didn't hear about it until now, I'm way past that.

What's required for me to change in terms of participant notice, plan amendments, and filings. Is it so simple as no notice necessary, 1 page amendment, and filing for short plan year through 10/2005? Or even easier? No notice and no amendment...

I have to say this filing is rediculous and a colossal waste of time. 2 entries on a Schedule A hardly seems worth the effort.

If a participant had 100% of his account transferred to his former spouse, pursuant to a QDRO, and it was later discovered that a corrective distribution needs to be applied to some of the transferred $'s (e.g. - adp/acp, 415 failure, etc.), does anyone view a transfer from the AP's account back to the participant for distribution, as a violation of the QDRO? I don't think it is, because the monies associated with the corrective distribution are not qualified retirement plan assets and need to be taxed to the participant (not the alternate payee).

Thoughts?

I have never needed to complete a 990T... I may be needing one. Is there a site.. or some literature that explains these forms (besides the instructions) and how to complete them for pensions.. an "Idiots" guide?

Thanks!

Doing a projection

Top heavy 401k

QNEC very small .733% to NHCE

8 NHCE - 3 terminated - no top heavy for these 3 but top heavy for remaining 5

keys also get 3% min - all benefiting

Pass (a) 4 on allocations basis with top heavy and QNEC

Without QNEC fail on allocations basis- HOWEVER, if I test onan accrual basis, 3 that term'd aren't showing up in gateway and plan passes 401(a) 4 on accrual basis

Is this possible and allowed?

A mutli-employer plan is considering spinning off one of the two employers. The spun-off employer will be setting up a new 403b Thrift Plan. Is the spin-off considered a partial plan termination and should the spun-off participants become fully vested in their accrued benefits?? Thank you.

Question can a someone in a goverment pension plan the New York retirement system, be force to retire on a given date by a QDRO ?

Greetings-

I am the CFO for a nonprofit in LA, California. My Foundation currently has 7 employees and needs to establish a Health, Eye, Dental and possibly a 401k plan. Looking for advice from individuals who have crossed this bridge (and lived to tell about it!)

This is a small Nonprofit, are there special groups that provide employee benefits for the nonprofit community?

Any advice would be greatly appreciated!

Nick Batch

PS: This same topic is posted under "Small Business" forum, but this seemed an appropriate location for my topic.

Greetings-

I am the CFO for a nonprofit in LA, California. My Foundation currently has 7 employees and needs to establish a Health, Eye, Dental and possibly a 401k plan. Looking for advice from individuals who have crossed this bridge (and lived to tell about it!)

This is a small Nonprofit, are there special groups (coalitions) that provide employee benefits for the nonprofit community?

What about going directy to Pacificare, Kaiser, Blue Cross ect? Is there benefit to going through as "broker"? There are thousands of Brokers, how do you decide?

Any advice would be greatly appreciated!

Nick Batch

generally can a plan rollover annual payments to a term participant over 5 years?

Just found this site - thank goodness.

I realize late deposits are considered prohibited transactions, but my problem is...what is considered late? If a company is consistently depositing by the 15th of the following month are they still not timely due to the "reasonably segregated from employer's general assets" rule?

Do we report a prohibited transaction since the company could have deposited the contributions earlier than the 15th?

Any help would be appreciated.

Thank you!

A participant has taken his money from his IRA and wants to roll it into his retirement plan. The bank where the funds were held issued him a cashiers check for the funds and he mailed to his 401(k) custodian. The custodian rejected the cashiers check, and they mailed it back to the trustee of the plan. The trustee has not received it yet - 30 days later.

In order to re-issue a check, the participant must:

1. Pay $ 500 to the bank to cover an indemnity bond and then they will stop payment and immediately do a reissue or;

2. Wait 90 days until the bank will do it for free.

The funds will be out of the IRA over sixty days if he has to wait for a free reissue, and he cannot afford the $500.

What is he to do. I have never heard of a custodian rejecting a cashiers check, nor have I heard of a bank charging a fee to stop and reissue a cashier's check.

Ugh!

Beneficiary of plan participant disclaimed a portion of the pension benefit to go into charitable remainder unitrust. Does the pension trustee report the distribution to the trust on a 1099-R? The other portion was rolled to IRA in beneficiary name. The beneficiary will receive a 1099 for this part.

The IRS gave us an extension for making automatic rollover amendments in Notice 2005-95. What about an extension of the extended period for operational compliance provided by Q&A-9 of Notice 2005-5?

Owner wants to put wife in plan for 2005

she has worked 4 days per week, 8 hrs per day since 1/1/04 but has never received compensation

eligiblity 1 year service, age 21 - entry 1/1, 7/1 with changes to salary reduction any time

owner wants to pay her just enough salary so she defer max for '05, receive 3% safe harbor and profit sharing

does anyone know if you must receive compensation to consider your "year of service" for eligiblity?

this sounds wrong to me

any other issues that stand out here?

thanks