If an executive is given non-elective deferrals of $X per year, to be received only if he remains employed until normal retirement age, may he be allowed to elect the manner of distributions as late as Dec 31 of the year prior to his retirement, without violating 409A? This payment is intended as a golden handcuff, and will be forfeited if employment is terminated prior to retirement (except for death or if the executive is terminated by the employer without just cause).

We have a small software services corporation founded in 1992 that initiated a SARSEP in 1996. The Corporation is no longer a going concern and is being shut down.

Is the SARSEP an asset that has value to an acquiring company??

If so what?

If not, what is critical to correctly closing out the plan?

I have been using ATX for years. But now they want you to pay per return. What 5500 software are you using and how do you like it? Thank you.

I have a situation where a Plan allows catch-up contributions, has a match, and does not have language that addresses whether the catch-up is matched or not. It is my assumption that absent language that specifies that the catch-up is NOT matched, it would need to be matched. Is this accurate?

What is the due date for making matching contributions to a non-safe harbor 401(k) plan? I always thought it was the same as the profit sharing plan due date (tax return due date plus extensions) but have now received information that it is 12 months after the end of the plan year (even if plan is not a safe harbor plan). Can someone please clarify this for me. Thanks.

Former PEO situation where it covered all employers in the PEO. The PEO seperated the employers into their own plan. The company who leases the employees is the sponsor of the plan for the leased employees (about 25). There are no employer contributions made to that plan. The other plan is for the 2 hces and 2 other nhce's that are not considered "leased". The company is the sponsor for that plan as well. The plans have been in existence since 2002. They have never been tested together... (401(k) contributions only!)

It is my understanding that:

- We will have to go back to 2002 and test the plans for each plan year as if they were one plan since leased ees for retirement plan purposes are considered ees of the leasing co.

- If the test fails, we will have to take corrective measures

Here are my questions:

- What programs are available for correction? (I believe we are past the deadline for APRSC)

- How many consultant hours would one expect the "fix" would take?

I need to find out information on any rules governing the creation of an Association Health Plan. I know that there have been numerous bills that have passed in the House which never became law because they were not passed in the Senate.

Specifically, I am looking for information as to whether forming such an association could present a problem for an ERISA fund.

If anyone has any information or can point me to some information I'd greatly appreciate it.

Thanks

Plan is top heavy. Therefore, minimum allocations equal to 3% of FULL year comp are required.

The plan document generally disregards comp paid prior to becoming a participant.

For purposes of computing the EBAR of a participant who entered the plan during the plan year, can I use participant comp, or am I required to use FULL plan year comp?

Thanks for the help.

I was hoping someone could help me with a calculation for maximizing a a contribution for a sole prop in 2005. I have a 1 life (owner) sole prop 401k plan. Owner is under age 50, so maximimum accumulation is $42,000 for 2005. Accountant says that before any 401k or employer contributions, wages are $148,000.

To determine maximum, do I subtract the 401k portion from this figure ($148,000 minus $14,000 = $134,000) and then from there, perform the loop calculation on the $134,000 to see if she can get to $28,000? Or is the $148,000 first lowered further based on FICA because of the $14,000 401k contribution?

Thanks for any help.

I noted a couple of the previous strings on Automatic Rollovers and After-tax contributions but they are not real clear on the final result. Are after-tax contributions subject to the automatic rollover rules?

Does anyone know the Wage limits for 2006?

125 Plan established.

7 nonhighly employees who participate

1 highly who participants.

Is there a limit the highly can put away, based on discrimination testing, wage limits, etc.?

Very basic question:

What are a plan sponsor's options 1/1/2006 for a min distrib due where a complete lump sum is not being taken.

Clearly,

1 Allow participant to select full, final, retirement benefit (with spousal consent, etc), if plan permits in-service distributions.

What about:

2. Allow participant to select full , final, retirement benefit, (with spousal consent, etc.) even if plan does not otherwise permit in-service distributions?

How about, somewhat analagous to the account balance method:

3. Allow participant to elect to receive one year of payments based upon the relevant accrued benefit, in the life annuity amount, without having such election affect death benefits if he dies while such election is in effect.

Or

4. Allow participant to elect to receive one year of payments based upon the relevant accrued benefit, but with the reduced amount based upon a J&100 (subject to MIDB), but without having such election affect death benefits if he dies while such election is in effect.

Interpretations please?

Plan document provides that forfeitures be used towards plan expenses, then to reduce match, then reallocated. Client stopped matching mid-year and paid plan expenses from the corp. We have about $7,000 in unallocated forfeitures at year end. Would it be appropriate to reimburse the corporation for the plan expenses that were inadvertently paid from the corp? Or must we reallocate? Reallocation is difficult because the match formula was 50% up to 6% per pay period. I guess I could treat the $7,000 as a discretionary match at year end somehow. But it sure would be a lot easier if we could just apply the forfeitures towards a fee reimbursement to the corp. All thoughts, experiences and advice appreciated!

When Employer stock is taken from a qualified plan as in kind distribution, the participant only pays taxes on the basis value of the stock until the stock is cashed by the participant. Do the same rules apply if ER stock is held in a SEP IRA?

Interesting:

http://benefitsattorney.com/modules.php?na...=article&sid=34

As stated before, one hopes the drafter of the QDRO will remember to address all cases involving death:

- if the participant dies first and before any benefit commencement,

- if the AP dies first and before any benefit commencement,

- if the participant dies first after benefit commencement, and

- if the AP dies first after benefit commencement.

Husband and wife own a family business. They pay their 10-year old twins compensation of less than $10,000 (sure beats my paper route as a kid!!!). Company will establish a 401(k) plan with no minimum age or service requirements. Can these kids also defer 100% of their compensation? I'm guessing the answer is yes, provided the compensation is justified. Any thoughts are greatly appreciated. Ed

From 1978 - 2004, some lawyers were completely unaware of Sec. 457(f)'s existence. These individuals would create nonqualified arrangements for their tax-exempt clients, using the same documents and language as they would for taxable clients (i.e. no substantial risk of forfeiture).

Thanks to Sec. 409A, people are now becoming educated about Sec. 457(f). That's at least one good result of the new law. Anyone else who's ever discovered or had to clean up a Sec. 457(f) mess would probably agree.

If an employer timely provides a safe harbor notice but does not amend the plan until after the begining of the safe harbor plan year, what do you think the chances are that the IRS may in EPCRS permit the retroactive amendment? The IRS did see the amendment and issued a determination letter on it already.

Expenses must be incurred after account is established?

Does the account have to actually be set up on HSA custodian's records or can a signed application and check count? HSA custodian will take at least 10 days to set up and activate account, but participant is going to incur otherwise eligible expenses this week.

Will a signed and dated application and check work?