This came in newsletter I get. Thought you 409A people might enjoy it...

http://www.faegre.com/articles/article_1781.aspx

I have a interspousal deed to transfer the entire interest of the residence to the participant. The participant wants a 2nd personal residence loan, stating that the loan is for paying the divorced spouse out.

The first princ. residence loan was to purchase the same property.

Are there any issues with providing a 2nd loan, that's amortized for 15 years for the same property at the participants word that the money is used for the purchase of the transferred interest? The document does allow 2 loans, and 15 year amort. for principle residences.

If Bank A buys Bank B when must the employees of Bank B become participants in Bank A's 401(k) plan. The eligibility period is 3 months. Can you hold them out during the transition period under 410(b) or must you follow the eligibility terms in the document?

I have a SH 401k with a 3% SHNEC. The groups are named as the 3 partners individually, and then 1 group as NHCE"S. They are giving the 3%SHNEC, but only one partner wants to put in a PS. Can I give him a minimal ps allocation wihtout giving an allocation to any other groups as long as I pass all other testing? I've never had this before and it just seems weird....can't wrap my head around it. Thanks for any help.

Merry Christmas all!

A Politically Correct Christmas Poem

Twas the night before Christmas and Santa's a wreck...

How to live in a world that's politically correct?

His workers no longer would answer to "Elves",

"Vertically Challenged" they were calling themselves.

And labor conditions at the North Pole,

were alleged by the union, to stifle the soul.

Four reindeer had vanished without much propriety,

released to the wilds, by the Humane Society.

And equal employment had made it quite clear,

that Santa had better not use just reindeer.

So Dancer and Donner, Comet and Cupid,

were replaced with 4 pigs, and you know that looked stupid!

The runners had been removed from his beautiful sleigh,

because the ruts were deemed dangerous by the EPA,

And millions of people were calling the Cops,

when they heard sled noises upon their roof tops.

Second-hand smoke from his pipe, had his workers quite frightened,

and his fur trimmed red suit was called "unenlightened".

To show you the strangeness of today's ebbs and flows,

Rudolf was suing over unauthorized use of his nose.

He went to Geraldo, in front of the Nation,

demanding millions in over-due workers compensation.

So...half of the reindeer were gone, and his wife

who suddenly said she'd had enough of this life,

joined a self help group, packed and left in a whiz,

demanding from now on that her title was Ms.

And as for gifts...why, he'd never had the notion

that making a choice could cause such commotion.

Nothing of leather, nothing of fur...

Which meant nothing for him or nothing for her.

Nothing to aim, Nothing to shoot,

Nothing that clamored or made lots of noise.

Nothing for just girls and nothing for just boys.

Nothing that claimed to be gender specific,

Nothing that's warlike or non-pacifistic.

No candy or sweets...they were bad for the tooth.

Nothing that seemed to embellish upon the truth.

And fairy tales...while not yet forbidden,

were like Ken and Barbie, better off hidden,

for they raised the hackles of those psychological,

who claimed the only good gift was one ecological.

No baseball, no football...someone might get hurt,

besides - playing sports exposed kids to dirt.

Dolls were said to be sexist and should be passe.

and Nintendo would rot your entire brain away.

So Santa just stood there, disheveled and perplexed,

he just couldn't figure out what to do next?

He tried to be merry he tried to be gay,

but you must have to admit he was having a very bad day.

His sack was quite empty, it was flat on the ground,

nothing fully acceptable was anywhere to be found.

Something special was needed, a gift that he might,

give to us all, without angering the left or the right.

A gift that would satisfy - with no indecision,

each group of people in every religion.

Every race, every hue,

everyone, everywhere...

So here is that gift, it's price beyond worth...

"MAY YOU AND YOUR LOVED ONES, ENJOY PEACE ON EARTH"

I have to run a 2001 nondiscrimination test because it was never done.

The ADP test passes. The ACP test passes. However, the Multiple Use test does not.

I know that in certain situations, you're able to "shift" elective deferrals from the ADP to the ACP test. I believe one of the requirements to shift is that you pass the ADP before and after the deferrals are shifted.

If I shift some deferrals from the ADP to the ACP, then the results of my Multiple Use test are a little better. It still fails, but the refunds will be slightly lower.

I'm trying to determine if it is acceptable to shift in this situation or not.

The ACP passes on its own. So I don't need to shift to pass the ACP. I can't find anything on this topic.

Anyone have any opinions?

1. Is there a problem in a pension plan purchasing real estate property in partnership with another entity who is not related to the plan sponsor/trustees?

2. Is there a problem if the real estate properties are bought and sold frequently (i.e. flipping the properties)?

How is the basis handled when the excess deferrals are miscalculated and participants received excessive refunds (are, in essence, overpaid) and must refund the overpayment of refunds back to the Plan?

To treat this as an after-tax contribution would mischaracterize the situation, but for participants to repay the amounts back into the plan would mean that they would pay taxes on these amounts twice, wouldn't it?

How are these amounts generally segregated out by a Trust?

A small business wants to start a Profit sharing plan for 2005. The company began in May, 2005. The only employees are the two 50% owners and the spouse of 1 of the owners, so we have only HCEs for 2005. I'm told however that (for whatever reason) all 3 individuals received no W-2 income at all for the year. Instead, they are being 1099d for all compensation paid to them for 2005. They will go to W-2 starting in 2006.

It's likely that more information is needed, but based on the above, do you think we can set something up for them for 2005? Does 1099 income prevent them from having any plan wages in 2005? Thanks for you advice.

This is regarding vestint for a rehired employee. Original hire date was 2/8/1999 - term. dated 6/28/2001. At the time of termination, the plans vesting was 100% after two years which because the employee worked 1,000 in 2001, he was considered 100%. He has now been rehired as of 8/2005. On 7/1/2001 the vesting for the plan was amended amended to a 5 year cliff. Document states anyone employed on 6/30/2001 will vest according to the original vesting schedule and anyone hired after 7/1/2001 will vest according to the amended vesting.

I know this participant's hire date needs to be adjusted to give him credit for prior service since he did not incur (5) one year breaks and he has been allowed back into the plan on his rehire date not having to complete eligibility again. But what vesting schedule should apply to him? Should he remain 100% Vested?

An individual is a 50% partner in a partnership that sponsors a SEP. This individual also has unrelated self employment income from a business in which he is the sole employee and 100% owner. He would like to open a SEP for that side business. What are the concerns for that new SEP (i.e. are the combined contributions limited to the 415 limit)?

New company started 4/1/05 by two shareholders each over 5% owner. New employee hired 9/1/05.

New Plan says all employees hired as of 4/1/05 eligible with no service requirement but all other employees require 1 year with over 1000 hours. Does this pass 410?

Can someone please let me know how I find my site ranking on google? Much appreciated.

Our plan allows for hardships for the purchase of a primary residence. Two employees (who are married to each other) have submitted hardship distribution requests from each of their accounts.

Earlier this month and prior to the settlement on their new house, they maxed out their loan options in each of their accounts. They have presented the Settlement Statement from December 9th as documentation to support the purchase of their primary residence. The transaction was finalized on that date and it appears that all funds were distributed at that time.

I do not consider this to be a true immediate and heavy financial need at this point. The settlement is not contingent upon the cash from the hardsip distribution - for all intents and purposes - it's a "done deal".

Am I right?

It doesn't help much to see on the front of the faxed request "We would like to request this due to a recent purchase of our first primary residence. We would like to have new appliances, and curtains and such."

I must provide guidance to our Plan Administrator and I'm relatively new to the 401(k) area of benefits. Any thoughts would be greatly appreciated.

The preamble to the 409A proposed regs say that a split dollar arrangment is not subject to 409A if it provides "only death benefits." What if the arrangment also provides for the payment of the underlying policy's cash value upon termination of the agreement and/or cancellation of the policy? Does this blow the exception?

An employer maintains a single employer collectively bargained defined benefit pension plan. A Pension Committee is the named fiduciary and plan administer of the plan. Under the plan document, the employer appoints members to the Pension Committee. The union has requested that it be allowed to appoint 1-2 union members of the Pension Committee (which would be a minority of the total members of the Pension Committee). Would this violate the Taft-Hartley Act because the employer does not have exclusive control over the plan or can the union appoint some members provided that the employer still dominates and controls the vote of the Pension Commtitee? The 2nd Circuit's 1968 case, Independent Association of Mutuel Employees of New York State v. New York Racing Association, Inc., 398 F.2d 587 has been crticized by other Circuits. Any help would be greatly appreciated. Thanks.

A calendar year plan is attempting to terminate in 2005. They have already distributed assets but apparently there will be dividends which post and will not be able to be taken out of the trust prior to 12/31/05. Can the 2005 Form 5500 be their last one or will they have to submit a form for 2006?

A Plan matches the first 4% of deferrals at 25%. The next 2% (up to 6% deferrals) are matched at 100%. Does this Plan need to be tested for Benefits Rights and Features? After all, everyone can defer up to 6% if they want do.

Can the BRF test be done on a disaggregated (otherwise excludible) basis?

How is the test corrected if it fails? Do additional match contributions

need to me made to NHCEs?

Thanks!

FTWilliam advertised on Benefitslink plan documents at very reasonable prices. Has anyone used this service and if so, any comments on the checklist, plan document, etc.?

I have read conflicting information regarding the eligibility of over-the-counter meds reimbursed through a HSA. Are they eligible?