Are you still allowed to do a bottom's up QNEC, or were there rulings that eliminated this option?

Suppose I want to draft a new plan document allowing for the bottoms up, can I use it or are they not existent anymore?

Thanks for some reason I thought I heard something about this option going away, but I cant remember?

I had a similar problem earlier, but now the opposite way:

A corporation (S-corporation) owned by a single person is being dissolved.

Can the 401(k) plan be maintained as it is by just changing the sponsor (by corporate resolution and signature of the sole proprietor) to the sole proprietorship (= the former shareholder of the corporation)?

If yes, is there anything else to consider?

Thanks!

Can an individual who is covered by a 401(k) at their "day" job and contributes the maximum allowable to the plan (assume $15k) and also has a sole proprietorship establish a SIMPLE IRA to reduce their self employment income?

A response at page 43 of this "Governmental Plans" section states: "Federal Disclosure to Participants and Beneficiaries rules do not apply to governmental plans." Does this flow from ERISA's general exemption of gov't plans, or is there more specific authority for the proposition? Also, am I correct in inferring that a governmental plan does not need to distribute a summary annual report to participants? Thanks in advance for your responses.

If I set up a Roth IRA Dec 30, 2005, does my 5 year waiting end 1-1-2010??

I'm 58

Same question essentially for a Rollover Roth IRA????

Assuming I have a Roth Rollover account and I want to roll over 401k's (I have a couple) does the 5 year waiting period start from EACH rollover????

Thanks for any help

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Standardized profit sharing plan adoption agreement, everyone gets 3% of pay for safe harbor. Plan applies the "last day rule if <500 hours" allocation condition. There are just 3 NHCE's.

One participant who gets the 3% of pay is terminated with 300 hours, so is not benefitting under profit sharing. Because they are benefitting (i.e., getting the 3%), they are not excludable under coverage (and the plan passes coverage). So for this Plan, the rate group testing is failed (i.e., safe harbor allocation model is blown because of different allocation conditions on the SHNEC and the PS).

Okay, so we restructure the Plans. The person described in my second paragraph goes into their own plan. They're an NHCE, so that plan passes b/c it has no HCE's.

My question is really on the second plan - can we treat the participant in the first plan as excludable? The condition for excluding a term with a break is that the sole reason they're not benefitting under the Plan is the fact that they were not employed on the last day. That condition does not seem to be met here, which means that he is not excludable, which means that the plan failed the rate group test and must be amended. Am I missing something?

I guess what I'm really getting at here, is can a standardized plan be considered discriminatory in this scenario? How can that be?

Are governmental plans subject to the Top 25 restrictions?

I usually use the 'View New Posts' feature. I will then respond to a particular item. How do I then get back to the list of view new posts easily?? IF I try to use the Back feature, an ugly message pops up and then I have to do it again.

Thanks for any help that can be provided.

Participant chooses to defer into the 401k only of his nonprofit ER. Does this deferral have to be combined with the participant's 401a plan for 415 purposes as any deferrals into his 403b would?

My stipulation settlement of divorce makes no mention of me paying any interest to my ex wife on her share of my ira and 403b plan, I wanted to give her share 3 years ago, but she insisted we need a qdro, I told her all she had to do is open and Ira with my broker and I could transfer her share to that account, how she and her lawyer want to do just that and want me pay high interest on the money they wouldn't take, higher than it earn, by not taking the she share of the money she left me with all the risks of keep the money. My question is do I have to pay her anything more than what is mention in the stipulation?

Company owner and only 1 employee who is highly compensated. Can I have a 50% of pay formula for the owner and 20% (top heavy min) formula for the employe?

We have a client who sponsored a traditional profit sharing plan for many years. Two years ago we amended the ps plan to add 401k features. The ps assets were trustee-directed, the k assets were participant-directed within a familly of mutual funds. ADP has come along and told client that they can save him a bundle of money on employee expenses such as Workman's Comp by signing on to their Total Source program, with ADP Total Source becoming a "Co-employer". The catch is that ADP total Source wants to handle the investment of the 401k plan assets, but they don't want to handle the investment of the ps assets. They've told the client that he has to terminate the ps portion of his current plan, and transfer the k money over to the ADP plan, which I'm assuming is a multiple employer plan. At least that's how he's describing it to me. Questions:

1. Does anyone have any experience with this kind of transaction?

2. What is a co-employer? Is ADP Total Source a PEO? Who is now the employer?

3. Is it possible to terminate only the ps portion of the plan and still leave the 401k portion intact?

4. Even if it's possible, might there be an issue with the 12-month rule regarding the 401k deferrals?

5. I have no idea of Mass Mutual's (ADP's fund custodian) fees or how they relate to the fees the plan is paying now. If they're higher, but the sponsor is getting the benefit of lower employee expenses elsewhere, does this raise any fiduciary or PT issues?

6. Are there any other issues I need to be aware of?

Company A is a 401(k) plan with safe harbor non-elective contribution - plan year end 12-31-2005. The owners of company A sell the assets of the company to XYZ on 12-15-2005. XYZ wants to maintain the plan for the employees.

Who is responsible for paying the safe harbor contribution for the plan year ending 12-31-2005 - Company A owners or the new owners? Is this something that had to be determined in negotiations?

I have a question regarding two plans that merge. Company 1 operates on a fiscal year. Eligibility is 2 years of service with entry dates of the first and seventh month. The employees are 100% veested if they satisfy those requirements.

Company 2 operates as 1 year of service and graded vesting schedule 2-20.

Company 1 merges to company 2.

If the employer is making a contribution for this plan year, is the new money 100% vested for the employees from company 1 who were 100% when they merged with company 2? Or is the new money segregated at the new vesting schedule?

Thanks for your help.

The tax credit for emloyers who start new retirement plans (less of $500 or 50% of start-up costs for the first 3 years), is that tied to EGTRRA and still available for 2005 and 2006?

The SPD for a 401K plan does not address hardship distributions. Assuming the complete plan document also fails to address the topic, what discretion would an employer have in responding to a hardship distribution request? What if the request came from a former employee?

http://www.christopherhawkins.com/06-13-2005.htm#78

Start the new year bright

I understand the general rule that a 501©(3) can have a 403(b), but does also being a governmental employer that is not a public education entity blow the right to have a 403(b), even when the entity does have 501©(3) status?

We signed our GUST restatement back in 2002 and we indicated to use the Prior Year Testing method.

However, we just found out that we did not complete our 2001 ADP/ACP testing. So we're doing that now.

2001 would have been during the GUST remedial period - so I'm thinking that we can choose between the Current Year and Prior Year method.

But part of me thinks that we're only allowed to use the Prior Year method since that's what our plan document indicates - even though this is a 2001 test.

Any suggestions?