Last I heard, there has still been no final word on the document requirement for 403(b) plans. Has anyone heard anything? Are they leaning one way or another? Are they considering only requiring documents for 403(b) plans with employer contributions?

Thanks.

ajames

My client's plan "forfeits" the nonvested portion of the employer contribution account at the end of the plan year in which employment terminates. The forfeiture is restored upon the employee's return within 5 years, but only if the employee repays any distribution received.

This language has been in the plan for years, but till now it has never come into play.

A number of administrative questions pop up re the buyback: Does the employee write a check to the plan trustee or does it go through the employer--or is either method acceptable? Can (and must) the plan accept a rollover from an IRA to accomplish this repayment? If the repayment is after-tax, does the participant acquire basis in the plan account--and if so, does the plan have to track it and report it on a subsequent distribution? How is repayment treated on the 5500?

I hope someone who does these all the time can tell me how it ought to be done.

Is it allowed for a participant to take an inservice distribution from plan A (as long as plan As document allows) and roll it into another qualified plan (plan B) of which the participant of Plan A is also a participant? The reason is that the investment choices of plan B are better than plan A's choices.

This "rollover" can only be employer contributed $, not deferral correct? age issues? and finally, if the account is not 100% vested, how is that issue addressed?

Thanks!

Company has maybe 20 ees, including 3-4 HCEs. Changed from fiscal 4-1 to 3-31 year to short 4-1 to 12-31-05 year.

I know I have to pro-rate salary 210*3/4 or $157,500. Integrated, so level is same fraction (3/4). Looking for max contribution.

Question is, 415 dollar limit, and what's counted against it. Had a guy defer $14,000 in first three months of '05 that were in the year end 3/31/05 tests. Knock that off the $ limit?

Others deferred regularly.

I guess the questions are 404© limits (I think 25% pay for short period) and 415© $ limit (when a short year and deferrals in the calendar year). Allocation limits?

Any help would be appreciated.

Our client which consists of a controlled group sponsors a 401(k) plan. They acquired another company during 2005 which sponsors a separate 401(k) plan. One plan applies the current year testing method for adp/acp and the other plan applies the prior year testing method. Neither plan satisfies Sec. 410(b) coverage separately requiring the plans to be aggregated for adp/acp testing. However, with the issuing of the final 401(k) regs in 2005, wouldn't these plans have to be disaggregated because of the inconsistent testing methods? Or does this prohibition apply only for permissive aggregation of plans?

Has anyone considered what you will be charging to administer a Roth 401(k)?

I'm preparing a valuation for a one-man DB plan, where the participant files Schedule F (regarding profit/loss from farming). My understanding is that the income is calculated the same way as for Schedule C, with the circular calculation to reduce income by the contribution and 1/2 of the SE tax.

If the contribution is greater than the Schedule F income, does this work the same way as well--i.e. there is a carryforward of the non-deductible amount to be deducted (hopefully) in future years as allowed?

I am gathering information about the new laws and document requirements regarding 403(b) plans. I am also looking at a TPA for our 403(b) plan. Where can I find additional information about:

-403(b) Plans in general (news, updates, etc)

-TPA's who handle 403(b) plans

-the new document requirement for 403(b) plans

Thanks

ajames

I can find references to making application to have the 4971(b) (100%) excise tax waived for an underfunded pension plan, but I don't see anything about applying to have the 4971(a) (10%) excise tax waived. Isn't that tax able to be waived?

May a S Corp owner (more than 2%) contribute to a FSA?

Client is the sole shareholder (and sole employee) of an S corporation. S corporation is going to set up a Cafeteria Plan and a profit sharing plan. Client's accountant suggested that the entity covert from S to C status before doing so to gain tax advantages. From the side of Section 125, I can see the advantage since a more than 2% shareholder of an S corporation would not be permitted to participate in a Cafeteria Plan. But from the side of a profit sharing plan, what advantages would there be to convert from S to C status?

Can a career average pay pension plan be amended to retroactively apply the $200,000 compensation limit to determination periods beginning before 1/1/2002?

For example, if a final average pay plan is amended for retroactive application of the compensation limit, the accrued benefit starting with the plan year beginning in 2002 will use a final average pay that is calculated using the 200,000 limit for determination periods beginning in 2002 and prior.

Does the same thing happen with a career average pay plan? If the participant earned $180,000 in the determination period beginning 1999, is the amount of benefit earned in that year calculated using the full $180,000, or is it still limited by the old $160,000 limit?

I guess I'm confused because of the following wording in the definition of compensation in the plan document for this client:

"In determining benefit accruals in Plan Years beginning after December 31, 2001, the $200,000 annual compensation limit described in the preceding sentence shall apply for determination periods beginning before January 1, 2002."

It seems to me that in a career average pay plan that the benefit accruals in plan years beginning after December 31, 2001 do not take into account the benefit accruals for prior years and thus there would be no effect of retroactively applying the $200,000 comp limit.

I'm so confused....any help would be greatly appreciated.

Facts:

large TH self-funded H&W arangement with over 200 participating employers

an employer with more than a POP 125 plan - full FSA

COBRA elections and notices?

Okay - obviously the H&W and FSA are seperate trusts, would the FSA be required to offer COBRA or more specifically where can I find the regs on how to qualify for the HIPAA exemption.

I'm new to H&W and FSA's - so by default also COBRA - any good links to reference sites for research would be much appreciated (not saying that BenefitsLink is not a good source).

Thanks.

My firm does the audit of a large 401(k) plan that is sponsored by a company that has several entities. We find several mistakes in the third party admin every year. The TPA has suggested to the plan sponsor that they should establish a plan for each entity seperately in order to avoid the large plan audit.

Can this be done?

Our initial thoughts are that 1)he wants to avoid anyone overseeing his work 2) he has found a way to switch the income paid to us for the audit to go into his pocket (how expensive it would be to set up plan docs, and annual admin for 5+ plans!)

Please give me any thoughts and suggestions. Thanks.

If a plan's EGTRRA amendment is silent as to whether or not the plan matches catchup contributions, should this be interpreted as they are matching catchup contributions?

a couple of foibles we discovered, without any fixes forthcoming from relius

You have to click on compute comp in match and safe harbor allocations to get those compensation fields to populate, even though you already have an eligibility transaction run.

When batch printing, we are getting 2 copies (hope they fix this)

otherwise havent had many problems

Hi,

I'm looking into starting up a Roth account and am 27. My question is, when you retire and start withdrawling from the Roth does it still earn an annual return? OR, when you start withdrawling, does interest stop?

-Matt

I wonder if anyone has knowledge or understanding of how court orders and QDRO's funtion. My divorce decree stated that my retirement plan was marital property but that any premarital portion was to be offset and the rest divided equally. The problem was that the other attorney filed paperwork to have the QDRO divided equally, without following the wording in the final decree.

Does anyone know what recourse I have to receive the premarital portion. Is there any relevant or existing case law that addresses this. Thanks

I was reading a webpage where the author of the page stated that businesses with partners can no longer use a form 5500EZ... Actually didnt state it that direct, but in essence that was the point conveyed. Is there a change for 2006 with regards to the form 5500EZ? The 2005 directions state that an EZ can be used with partners.

Thanks!

The regulations in effect as of January 1, 2006 state that, to remain except form ACP testing, all matching contributions must be allocated on a nondiscriminatory basis. Placing an allocation restriction, such as a last day rule or a 1,000 hours-of-service requirement, on any matching contribution provided by the plan is discriminatory unless all non-highly compensated participants satisfy the restrictions.

The plan I am looking at has the 3% nonelective safe harbor provision with an additonal discretionary match which has no allocation conditions for active employees but requires terminated employee to work 501 hours to receive the match.

Someone in our office is agruing this regualtion would not apply to this plan.

Your thoughts would be appreciated.