I am dealing with a 401(k) plan that contains a QJSA normal form of benefit. We are involved in a merger & acquisition situation, and we would like to apply a default election procedure under which a participant's 401(k) account balance will be automatically directly rolled over if the participant does not respond to the distribution election form and notice within 30 days (essentially a negative, or default, election). Is this possible, or must the plan obtain affirmative spousal consent for the direct rollover? In other words, can a default election satisfy the requirement for spousal consent of a direct rollover?

Could a MP plan that currently contributes 9% of compensation change the allocation formula to allocating 9% of comp to existing participants and 6% to new participants? If so, would a rate group test on an allocation rate basis be the required test to prove nondiscrimination? I realize the rate group test can be done on an equivalent benefit rate basis also, but I would like to avoid this.

I've worked on PS plans that give different allocation rates per divisions and have performed the rate group test as listed above to test nondiscrimination. I'm just not sure if being a MP plan changes things or if the participation date "grouping" matters.

Thank you in advance.

Birdie birdie

in the sky

do that do-do in my eye

me know care

me know cry

cuz me not in a four-twelve-i

so, while you can sort by name, the sort is as follows:

if {PLANKMTEST.EESORTOPTCD}='2' then ({PLANEEKMTEST.LASTNAM} + {PLANEEKMTEST.SSNUM})

so when it sorts you get by name, but if two people have the same last name then it sorts by soc sec number. so my plan with a flock of Smiths is, well....

you would need to modify as follows if you want the first name to be considered in the sort.

if {PLANKMTEST.EESORTOPTCD}='2' then ({PLANEEKMTEST.LASTNAM} + {PLANEEKMTEST.FIRSTNAM}+ {PLANEEKMTEST.SSNUM})

A participant in a profit sharing plan is deceased and so is the spouse. The company does not have a beneficiary designation on file. What options are available to the administrator for distributing the account balance?

Any thoughts on whether you can treat the following as a "newly eligible" participant for purposes of the 30 day election rule? The employee participates in a deferred compensation plan by making deferrals under the plan during 2006. The participant is terminated in early 2006 and 2 months later is rehired. The participant upon rehire must wait 30 days, but then becomes eligible to participate in the same deferred compensation plan.

Note: Under the plan you must receive your account upon termination of employment and in this case the employee is being treated by the employer as a new hire.

Any other way around this issue?

Where can I find more information on the above Safe Harbor 401(K) Maybe Notice, and possibly a sample?

Thanks.

Steve

A participant received and read the SAR and is now asking for all of the information they are entitled to.

What exactly is the plan required to give to the participant other than the 5500 excluding the Schedule SSA?

How frequently is it required to provide this participant with all of the requested information? (Participant is stating that it is required to provide quarterly.)

How long does the plan have to provide this information after the request has been submitted?

Thank you for any help.

I’m hoping someone here is familiar with administrative obstacles after your area has been declared a disaster area by the President. We are in an area that was declared a disaster area due to Hurricane Katrina and are dealing with a lot of odd situations because of it. One question I have is:

Would it be allowed to permit a participant that had to terminate their employment or go on leave due to the hurricane (main reason is because of relocation of either the individual or the company), to submit expenses incurred after the hurricane for reimbursement under their health FSA plan? The participant either had not incurred medical expenses before the hurricane or has lost all documentation in the flood.

Please let me know if you need more information to help with this.

Thanks in advance.

How do you determine if a new loan is considered a “replacement loan”?

Here are the facts:

Plan allows one outstanding loan per participant. Maximum loan amount is the lesser of 50% of vested value or $50,000 (reduced by….so on)

Participant takes “loan number 1” in 2003 amortized over 5 years. Participant has enough cash and pays off the balance of loan number 1 in 2005. (Maximum allowable term ends in 2008)

Participant then takes out loan number 2 in 2005 amortized over five more years shortly after paying off loan number 1. (Maximum allowable term ends in 2010)

No problem as far as only having one loan at a time as far as the document is concerned. Loan is not for purchase of home. The amount is well under $50k.

So, is loan number 2 considered a replacement loan even though she paid off the other loan with her own funds?

I am trying to determine if we need to take both loans into consideration to calculate the maximum amount of the new loan (50% of vested value).

Thanks.

Plan has 6 mth eligiiblity requirement w/ entry dates of 1/1 and 7/1. Plan amends to provide 1 year eligibility w/ same entry dates. If an employee met the 6 mths before the amendment is effective but not before her 7/1 entry date, can she be exclued?

Is there a recommended procedure for terminating the health plan for retirees? I am working with a small employer who has always provided retiree benefits (paying only 25% of the premium), but they would like to remove the retiree class from eligibility.

Thanks for any input.

It is my understanding the contributions are tax-deductible. I have an individual HSA, file a Schedule C so deduct my health insurance premiums - anyone know if my funding contributions are to be included on the same line on Schedule C where I list my actual health premiums? Thanks.

Hi, I hope someone can help me. I was going through my tax records and realized the person who had prepared my taxes for the year 2000, did not include my Roth deduction (the 4th of the 4 year spread deductions). Do I simply deduct the amount this year, or will there be fines I will have to pay as well? Thanks for any help, Jim

I can't get the user Profile Options section to work... is it just me?

Edit - never mind - just me! My User Agent switcher was on and screwing with it...

Ignore this. Unless you can learn from my mistakes.

Hi everyone!

Stupid question from my neck of the woods.....

If an accountant performs a limited scope audit, is it possible for them to issue an unqualified opinion? I was always under the impression that any limited scope audit could only issue a disclaimer, since they didn't look at/test the procedures at the financial institution.

Thanks!!!!

Vicki

Hi! I'm new to the board, but had a question about Cafeteria Plans...specifically concerning the entity that oversees Cafeteria Plans in the State of California. In most states, the DOI is the chief entity responsible for 125's, but in this case, the DOI reps that I've spoken to in CA are clueless. The last one I spoke with said she had been with the DOI for 30 years and had never heard of a Cafeteria Plan. Extremely discouraging!!!

I'm trying to find out what licenses are required to conduct 125 business in the state. I would really appreciate any and all help you all can provide. Thanks so much!

Do all plans need an amendment for Retroactive Annuity Starting Dates (by the end of 12/31/05 I believe) or is a RASD an optional design feature to where if the plan doesn't provide for a RASD there is no amendment required ?

I have a client who is interested in using IRA funds to help purchase a business. I am somewhat familiar with the prohibited transaction and UBIT considerations, but I'm sure someone has much more experience than I do. Would it be better to have the new company set up a one-man 401(k) plan that invests in qualifying employer securities or have a directed IRA hold the shares directly (via Swanson)? They want to use Guidant, and I'm skeptical of almost eveyone. Please point me in the right direction. Thanks.

According to http://www.wtplaw.com/News/articles.asp?NewsID=287

BEWARE OF TRANSMITTING SOCIAL SECURITY NUMBERS – HOW MARYLAND’S NEW SOCIAL SECURITY NUMBER PRIVACY ACT MAY AFFECT YOU AND YOUR BUSINESS

01/25/2006

Jennifer Ryan Lazenby

Maryland’s new Social Security Number Privacy Act became effective January 1, 2006. The Act prohibits, among other things, the public posting of an individual’s Social Security number or the public display of an individual’s Social Security number. Very few employers or businesses actually contemplate posting Social Security numbers for the public to see, so at first blush the Act may not seem relevant to your company.

The Act, however, is also directed at normally private actions that may become “public” through a breach of security. Transmitting an individual’s Social Security number by mail, facsimile or over the Internet is also prohibited.

Practically, the Act will have a huge impact on Maryland businesses, probably far greater than ever expected by the legislature and the general public. The use of Social Security numbers is prevalent in today’s society. Social Security numbers appear on insurance cards, credit reports, tax returns and employment applications.

There are some exceptions to the Act, including the use of an individual’s Social Security number if required by State or Federal law. Moreover, continuous use of an individual’s Social Security number may be permitted under certain circumstances if the user provides an annual disclosure informing the individual of his/her right to order, in writing, that the use of his/her Social Security number stop.

Although the Act does not specifically define how violators will be punished, precautions should be taken to avoid civil liability and to protect the identity of your clients, employees, etc.

If you use Social Security numbers in your business, provide the holders of the numbers written notice of the Act and inform them of their right to opt out of such use.

Evaluate the effectiveness of your internal procedures.

Make employees aware of the new law and regularly verify that your internet connection is secure.

If possible, recode your records to use only the last four digits of Social Security numbers.

Require an individual to complete a waiver if he/she asks you to forward information containing his/her Social Security number to third parties.

The above outline is intended only as a broad overview of The Social Security Number Privacy Act applicability and does not constitute legal advice.

I remember laws being passed that kept firms from printing Social Security Numbers on statements etc. However, it seems to me that this goes way beyond that. Do Maryland clients need to start using employee identification numbers when sending information via fax or internet?

Our clients send in census data, contributions, etc. using the SSN as the identifier.

Thanks,

Stephen