After numerous tries to log in, I finally decided to re-register. That took quite a few tries before I could get in.

I do not recall all the details but I recall that in both situations, I was told that a confirmation email would be sent. That never happened for the numerous tries. When I did get an email, I happily used it so that I could use the Board.

However, using the new name I get a new posting count while losing all that went before. In other words I lost my track record and search value. It might not mean much to some, and there are even some who might say that it is for the best (or worse), but I miss them.

Is there any way of reactivating the old name or merging the new with the old?

Someone has come to me asking for advice on his 401k allocation. Upon looking at his limited choices and the fees associated with all of them, it is apparent that there is NO good alternative. As a result, I was going to suggest, subject to the legality of it all and his employers' approval, that he "quit" for a specified period and then rejoin the company. Then we could roll over his funds to an IRA and have real latitude in his investment options.

Seniority is not an issue. There is no matching, so no vesting. Can't ID other relevant issues, sure would appreciate any thoughts.

I have a question about a situation we are in. A participant was in dire straights. They needed money BADLY. She already had a loan outstanding and did not qualify for a hardship or in-service. When all else failed we refinanced the loan so she could get at least some money. Ex. She had a loan outstanding of 1000.00. We did a new loan for 2000.00 and a loan payoff of 1000.00 for a net check of 1000.00. When we requested the check we inadvertently sent the request over for 2000.00 instead of the 1000.00. When the check left the trust it made the Plans cash negative (1000.00). We tried to stop the check in time put participant had already spent the money. We redid the loan in our system to match what actually happened but now it is blatantly obvious that she received more than 50% of her balance for a loan. When this Plan gets audited this will be a problem.

Is there anything we can do to make this fly? Can we have the Trust issue a 1099 for the extra 1000.00 we paid out to her or since she did not qualify for a hardship this can’t be done? No one can give me a straight answer to this problem, so I am turning it over to the experts. Thank you so much in advance…

Can anyone tell me whether 871(f), which generally provides an exclusion from gross income for amounts received as an annuity from certain qualified plans, would apply in the case of a qualified plan that only pays distributions in the form of a SLA or QJSA. In other words, can the word "annuity" for purposes of this section be interepreted so broadly as to include run-of-the-mill SLA pension payments? Or is it only an annuity that has been purchased by a qualified plan or something similar?

Several references including IRS training materials note that both cash and non-cash fringe benefits are excluded by the fringe benefit exclusion under 1.414(s)-1©(3). The IRS materials specifically note that such benefits include "taxable 'extras' such as the personal use of a company car, educational assistance, etc."

Can anybody point me in the right direction as to where the IRS draws the line with respect to what is a "taxable extra" for such purposes. For example, would a car "allowance" paid under a non-accountable plan be considered a taxable fringe benefit or should that be more properly thought of as general wages. Similarly, what about large cash employee awards or bonuses as opposed to small achievement type awards. I assume the smaller and less frequent the amounts the more likely these are to be thought of as taxable fringes rather than wages but I am trying to determine where the line should be drawn, especially for amounts that are fairly predictable and easily tracked and accounted for.

Thanks for any thoughts or assistance.

The proposed regs contained language to the effect that if an employer made a supplemental contribution in addition to a safe harbor, then the plan could not impose a last day/1000 hour requirement on that supplemental contribution. However, I can't find this provision in the final regulations. Does anyone know if it was intentionally removed or if it still applies?

In a plan that uses the safe harbor hardship reasons, is it permissible for an employee to take a hardship for the purpose of buying land on which to build a home in the future?

Plan has both grandfathered and non-grandfathered amounts. Could I "terminate" the grandfathered portion pursuant to the transition rule and pay only that portion out by the end of 12/31/05 and pay only that portion out? If no, what about bifurcating the plan into 2 plans - grandfathered and non-grandfathered amounts and terminating the "grandfathered" plan. Does that work?

Can a participant of a 401(k) age take an in service distribution and roll it to an IRA and not have the mandatory 20% withholding?

Sponsor's business is poor so a number of employees were "laid off" effective Dec. 1, 2005, meaning that the company intends to call the workers back to work when (and if) business picks up. No compensation is paid while on layoff and the workers qualify for govt. unemployment benefits.

Three of those laid off on Dec. 1, 2005 had met the eligibility req (yr of service) and were on track to reach their entry date into the 401k plan on Dec. 15, 2005. The plan only considers comp received while a participant. The laid off workers will not be called back to work prior to the end of the 12/31/2005 plan year.

Questions:

1. Do these 3 workers enter the plan on their Dec. 15, 2005 entry date despite their layoff status?

2. If so, how are they treated with respect to the current year ADP testing in view of the fact that they will have zero deferrals and zero participant compensation for the 2005 plan year.

Thanks in advance.

Can a participant make a distribution election for deferrals subsequent to 2005 that revises a distribution made previously (for example2004 or 2005) ? Would making an election that changes a previous deferral election take away all grandfathered protections?

Hi everyone...I'm working on a census report and I want it to show the "reason not eligible" element for the ineligbles. I can't seem to find a database field that will work. Does anybody know the table/field that I can use to get this info to print? TIA for any suggestions.

I haven't run into this before and after researching I am abit confused. For a new 401k-PSP, one could adopt a plan today and make it effective 1-1-05. For a new safe harbor, the language I am seeing says "first plan year must be at least three months". I presuming the plan year begins on the effective date, so one could start a new 401k (s/h non-elect) today for 2005 with the effective date 1-1-05?

Company Z is owned 35% by Employee A, 15% by his nonemployee son, and 50% by Employee B, who is not otherwise related to Employee A. Company Z is terminating an underfunded DB Plan, and the Company would like to eliminate the underfunding by cutting back A's accrued benefit. The question is "can this be done, given his ownership percentage." The nonemployee son is an adult, and Employee A has the right to buy Employee B's stock pursuant to their shareholders agreement upon Employee B's death, disability or retirement.

A control group (parent/sub) currently operates as a QSLOB and has separate 401(k) plans and different matching formulae for the two plans (one for P and one for S). The group soon will reorganize and lose their QSLOB status. However, for various reasons, there is a need to continue the two different matching formulae. What discrimination testing and other issues should we expect. The two plans will be merged into one, but there will be one match for all employees except for those employees employed by the subsidiary, which will have a more lucrative match.

It appears the major issues are 401(a)(4) and 401(m)/ACP testing. In terms of the amount of the match, it appears you just test the total or aggregate match as one. In theory, it seems like as long as the subsidiary with the more lucrative match has a better participation rate by its NHCEs than the parent, this actually could help the parent's ACP testing, or it at least won't harm it. The sub also has a greater concentration of NHCEs than the parent.

It also appears that the other issue is the benefits, rights and features testing in 1.401(a)(4)-4. The more lucrative matching formula will have to satisfy 410(b) in order to pass the "currently available" requirement, and then, based on all the relevant facts and circumstances, it will have to be shown that the group of employees to whom the more lucrative benefit formula is given does not result in the HCEs being substantially favored. Again, since there is greater percentage of NHCEs in the sub, and those NHCEs in the sub historically have deferred more than the NHCEs of the parent, it seems like this is not going to be discriminatory.

Is there anything else that needs to be analyzed?

We're setting up a new PSP for a company that manages an affiliated hedge fund. There will be 5 participants in plan - 4 HCEs and 1 NHCE. Is there a problem with plan assets being invested in the fund they manage? If not, are there limits on the percentage of total assets that can be invested? Does trustee direction of assets vs. participant direction make any difference? Thanks in advance for any input!

9/30 corp y/e, 12/31 plan y/e. In preparing the 9/30/05 corp return, you use compensation for the fiscal year end. For the Plan, you use compensation for the plan year. So, would you deduct the 12/31/05 ER contribution on the 9/30/05 tax return? If yes, do you extend the tax return due date each year? Or, due you end up pre-funding the ER contribution?

I just saw a December 8, 2005 draft from IRS of a new Notice.

There will be no requirement to make 409A disclosures on W-2 and 1099 forms for 2005.

Are you familiar with the following scenario:

Three foreign partners ( non-resident aliens) wish to set up a defined benefit plan in a US-based LLC.

There is only one employee in the LLC, who actually manages the business. This person will be part of the db plan ( of course).

Questions:

1. Is it possible to set up a defined benefit plan for such a structure?

2. Would not this type of relationship between the LLC and its employee be considered as a de facto ownership?

Any comments, ideas, further questions will be appreciated.

Regards, Yelena

Is it possible for a new company to adopt a DB with a beginning of year valuation?

For example, suppose an S-corp is formed 1/1/2006. No compensation exists for the prior year, but suppose we wait until 12/31/06 and use 2006 compensation. I know an end of year could be done the first year and then switch to beg of year, but could you start with beg of year?

If it is possible to use first year salary for a new company and beg of year DB, could the plan year be different from the company year? For example, suppose an s-corp is formed 10/1/2005 with a 12/31/05 year end. Could the employer adopt a db with a plan year 10/1/05-9/30/06? My understanding is if a beg of year valuation is done, the deduction could be taken on the 12/31/05 return. In this case the only participant will be the 100% owner and he will absoultely have more than $210K in salary every year. the contribution would have to be funded by 9/15/2006.

Thanks much.