I'm brand new to the compliance side of plans, so please bear with me.

I am looking to get Relius to generate the SH Match numbers based on the 04 census information I have. It's all been imported into Relius and I have changed the Matching Provisions to reflect SH Match %'s. The Contribution Analysis report I generate for 2004 is still showing a 50% match. I would assume there has to be a way of getting the SH Match numbers for the entire plan, I just don't know how to do it.

Thanks!!

Can a 50% member in a LLC (there are no other employees) create and fund a SEP based on net earnings from self-employment (from LLC) without regard to other 50% member? Or must the SEP be created at the partnership level requiring both members to be included?

Plan Year 2004

calendar year

t/h 401k no match

besides the fact that it's already too late - client in big trouble with various agencies - just a general question really

need small qnec to pass

but also need th min 3%

allocation for nche = QNEC (i.e. 1% of pay) + 2% top heavy

can pass (a)4 with QNEC but can't pass without

can we fix it by giving a full 3% top heavy minimum plus qnec? then plan passes

I know this seems like a stupid question but I've been sitting here so long I can't think straight anymore

thanks for your help

A company has a welfare benefit plan with over 100 participant that they have filed a 5500 in the past. During an in house audit, found they did not include the reporting of their dental reimbursement benefit in the filing. This benefit does not have a written document but is mentioned in the employee handbook and is available to all participants. The information on the 5500 is for the welfare benefit plan that does have a plan document. The Question is should the 5500 just be amended to include to include this benefit and would there be a penalty involved or since this benefit is not mentioned in the welfare benefit plan document would this be a separate plan all together and a separate filing altogether need done. I have very little experience with welfare benefit so please forgive me if this is an elementary question.

If an employee cancels his deferral elections by the end of 2005 under the 409A transition relief, how much should be distributed to him? Is it strictly the amount he deferred, or is it adjusted for earnings? For example, if an employee elected to defer $10,000 during 2005 into a new account-based plan, and his account, because of earnings, is now at $11,000, if he elects to cancel his deferrals, does he receive a distribution of $10,000 or $11,000? What if his account has decreased to $9,000?

Background: We adopted a plan document during 2004 with a January 1, 2004 effective date. (The plan was a volume submitter with a 1000 hr and last day requirement). The plan sponsor decided to utilize Safe Harbor 3% beginning in 2005. To simplify things, the plan sponsor choose to adopt full and immediate vesting with the new document for 2004.

Issue: We had two employees that terminated in 2003 that were paid out in the beginning of 2004 that were paid out based on the old vesting schedule (both were not fully vested based on 2-6 yr) in affect prior to the adoption of this new document with F & I vesting. Do you think that the forfeitures for these former participants should be paid to the participants because they would be considered fully vested under the terms of the plan document? Or are we okay in keeping their payout the way it was?

Thoughts? Concerns? Need more info?

Employer makes a corrective contribution with respect to an employee's missed elective deferrals in a prior tax year (e.g., 2004). Would the employer be required to report the deferral on a W-2? The W-2 instructions provide that employers must report only employee deferrals under a 401(k) and an employer contribution would not seem to fall within this category. My one hesitation is that corrective contributions made with respect to an employee's missed elective deferrals in a partial plan year are subject to the 402(g) limits, which arguably suggests the employer contribution may be characterized as a deferral.

Has anyone addressed this issue?

Misinterpretation of the plan document resulted in a few people not receiving an allocation of Money Purchase Pension Plan contribution in various plan years dating back to 1997. The amounts due in most of the prior years is very small, under $200. Would this qualify under the self correct program, and would the lost earnings be determined in the same manner as late 401(k) deposits under 6621(a)(2)?

I'm looking under the proposed regs for 409A and I can't find when it is permissible to accelerate vesting? Can anyone help? Specifically, the question is can vesting be accelerated for certain employees over others?

Thank you.

I did manage to arrive at most of the answers, then contacted the individual for the answers.

2 of his answers were not on the song list! Christmas Time in Texas (he wondered why no one could get that one!), and Round and Round the Christmas Tree. (It is actually Around the Christmas Tree, but makes more sense with the picture)

a couple of them I would never have gotten, and at least one or two of them I think my answer is as good as his.

Ha. I should charge for the answer grid, but what the heck. Now c'mon. no peeking until you really try to solve them!!!!!!

A for-profit entity has a NQDC plan that is a defined contribution plan under which all contributions are at all times 100% vested. The plan is funded in a rabbi trust. The for-profit entity is merging into a non-profit, tax-exempt entity (through a sale of assets).

Can the tax-exempt entity assume the plan's assets and liabilities without immediate taxation under 457(f)? The for-profit entity is effectively forfeiting the deductions.

There have been many posts on this topic since 2001 but not many answers. Hopefully since time has gone by someone has had more experience.

A particiapnt died with an account balance in a DC plan and the court has been brought in to interplead several claims against the death benefit. We were requested to pay the benefit to the court. Questions:

1. Is the plan required to tax report the payment to the court? I assume no, that until the court decides who is to receive the death benefit that it is still held in trust.

2. Once the court decides who gets the death benefit how does the plan withhold taxes and tax report?

3. If the plan allows a form of benefit other than a lump sum, does the plan need to offer the other forms to the court appointed beneficiary?

4. How do the MRD rules apply. In this case the participant was 40 and the plan allows the designated beneficiary to elect the 5-Year or Life Expectancy Rule.

5. How does this affect Form 5500 reporting?

6. Why allow the dollars out of the plan at all unless the MRD or plan provisions force it out? Why not wait until the court makes its decision?

Thanks!

I have just begun selling real estate. I have been advised that I have the opportunity to contribute to a Sep IRA and deduct 25% of my earnings or approximately $40,000 whichever is less from my tax liability. I also want to convert a traditional IRA to a Roth IRA this year. Could I use the tax deduction from my SEP IRA contribution to offset the tax increase I will receive from the conversion to a Roth?

Thanking you in advance.

Can a family limited partnership establish a qualified business retirement plan? I have heard of LLC and LLP being able to establish plans but don't know about family limited partnerships

A client has an arrangement with executives to pay them a bonus if the client goes public or is sold (liquidation event). The client wants some flexibility on when to pay the bonus after the liquidation event - if there is enough cash available at the time it would pay out the entire bonus immediately, otherwise it would pay it out over time (ex. over a 5 year period). There would be a period before the actual liquidation event in which the parties could work out the payment details, which would be in place before the liquidation event.

Can you do this under the new 409A rules? I don't think you can, at least under the proposed regulations. The proposed regulations seem to say that you either have to make an election 1. before the compensation was earned (I suppose this means before the original agreement), or 2. 12 months before the liquidation event and the payment date has to be at least 5 years from the liquidation event - the liquidation date is treated as the original payment date that can be delayed only under the 1 year/5year rule. Neither would work here - there's no way to know when payment should be made until shortly before the liquidation event.

This is impractical for my client and puts it in a big bind.

Am I reading the proposed regulations correctly? Any suggestions would be appreciated.

I am hoping that someone has a copy of PLR 9437042...and would be kind enough to provide me with a copy.

Thanks

Denise

I have a question regarding the 402(g) limits when it comes to failing the ADP test.

I have a plan year end of 06/30/05. A participant deferrerd $13,464 during that plan year. I know the limit for 402(g) is 13,000 for 2004. He is not eligible for catch up so the limit for ADP is 13,000. Since this is a fiscal year end and he is over the 402(g) limit, can the excess deferral be carried to the next plan year without returning that excess to the particpant?

In other words, since the extra $464 is already in the investment account, can a note be made to limit the deferrals for the next plan year so he does not exceed the limits for the next plan year?

Everything I see address a calander year. In whole, the adp test passed, he just exceed the 402(g) limit.

Any information would be helpful.

Thank You,

Cynthia

I have the following situation and just wanted to be sure that I am correct that a Controll Group does not exist:

Company A: Roger ownes 62%, Houser ownes 20%, and Elmore ownes 18%

Company B: Roger ownes 67% and Williams ownes 33%

Company C: Roger ownes 51% and Grove ownes 49%

I do not think a controll group exists here and just wanted to make sure I am correct on the rules.

There is not a parent subsidiary relationship b/c one of the businesses does not own 80% of one or more of the others. Also, I don't think that there is a Brother-Sister relationship b/c the 80% ownership test is not satisfied eventhough the 50% identical ownership test is satisfied. If I am thinking correct, both the 80% AND the 50% must be satisfied for a brother-sister relationship.

Any input would be appreciated....

Carson Vaughan

So it looks like the guy added a few more puzzles. but then the song list was also enlarged! good luck. I think I solved most of them. ugh.

ALL I WANT 4 XMAS IS MY 2 FRONT TEETH

ALL THROUGH THE NIGHT

ANGELS AND SHEPHERDS

ANGELS FROM THE REALMS OF GLORY

ANGELS WE HAVE HEARD ON HIGH

AROUND THE CHRISTMAS TREE

AULD LANG SYNE

AVE MARIA

AWAY IN THE MANGER

BABY IT'S COLD OUTSIDE

BABY JUST LIKE YOU

BLUE CHAMPAGNE

BLUE CHRISTMAS

BOOGIE WOOGIE SANTA

BORN ON EARTH THE DIVINE CHRIST CHILD

CAROL OF THE BELLS

CAROL OF THE BIRDS

CAROLING WITH THE ELVES

CHERRY TREE CAROL

CHESTNUTS ROASTING ON AN OPEN FIRE

CHILDREN, GO WHERE I SEND YOU

CHIPMUNK SONG

CHRIST IS BORN IN BETHLEHEM

CHRISTMAS BELLS

CHRISTMAS CHEER AROUND THE YEAR

CHRISTMAS DINNER

CHRISTMAS FOR COWBOYS

CHRISTMAS IN DIXIE

CHRISTMAS IN KILLARNEY

CHRISTMAS SHOPPING SONG

CHRISTMAS STAR

CHRISTMAS TREE

CHRISTMAS WALTZES

CHRISTMAS WITHOUT YOU

COME, THOU LONG-EXPECTED JESUS

COOL YULE

COVENTRY CAROL

CRADLE SONG

DANCE OF THE ELVES

DANCE OF THE GINGERBREAD MEN

DECK THE HALLS

DING DONG MERRILY ON HIGH

DO THEY KNOW IT'S CHRISTMAS?

DO YOU HEAR WHAT I HEAR?

FAREWELL TO FRIENDS

FELIZ NAVIDAD

FIRST NOEL

FRIENDLY BEASTS

FROSTY THE SNOWMAN

FUM, FUM, FUM

GENTLE MARY LAID HER CHILD

GLOUCESTERSHIRE WASSAIL

GO TELL IT ON THE MOUNTAIN

GOD REST YE MERRY GENTLEMEN

GOOD CHRISTIAN MEN, REJOICE

GOOD KING WENCESLAS

GRANDMA GOT RUN OVER BY A REINDEER

GREATEST GIFT OF ALL

GREENSLEEVES

HALLELUJAH CHORUS

HAPPY HOLIDAYS

HARD CANDY CHRISTMAS

HARK THE HERALD ANGELS SING

HAVE YOURSELF A MERRY LITTLE XMAS

HERE COMES SANTA CLAUS

HERE WE COME A CAROLING

HEY SANTA CLAUS

HOLLY AND IVY

HOLLY JOLLY CHRISTMAS

HOLY NIGHT

HOME FOR THE HOLIDAYS

HOW A ROSE E'ER BLOOMING

HOW GREAT OUR JOY!

HURON CAROL

I HEARD THE BELLS ON CHRISTMAS DAY

I SAW MAMA KISSING SANTA

I SAW THREE SHIPS

I STILL BELIEVE IN CHRISTMAS

I WANT A HIPPOPOTAMUS FOR XMAS

IF WE MAKE IT THROUGH DECEMBER

I'LL BE HOME FOR CHRISTMAS

IN EXCELSIS GLORIA

IN THE BLEAK MID WINTER

IT CAME UPON A MIDNIGHT CLEAR

IT'S BEGINNING 2 LOOK A LOT LIKE XMAS

IT'S TIME TO DECORATE AGAIN!

JESUS, JESUS, REST YOUR HEAD

JINGLE BELL BOOGIE

JINGLE BELL ROCK

JINGLE BELLS

JOLLY OLD SAINT NICHOLAS

JOY TO THE WORLD

LET ALL MORTAL FLESH KEEP SILENCE

LET IT SNOW

LET THERE BE PEACE ON EARTH

LINUS AND LUCY

LITTLE DRUMMER BOY

LITTLE SAINT NICK

LITTLE TOWN OF BETHLEHEM

LORD OF ALL HOPEFULNESS

LORD'S PRAYER

MAN WITH THE BAG

MARY DID YOU KNOW?

MARY'S BOY CHILD

MASTERS IN THIS HALL

MAY THE GOOD LORD BLESS YOU

MEET ME UNDER THE MISTLETOE

MERRY CHRISTMAS BABY

MILK AND COOKIES

MISTLETOE AND HOLLY

MOST WONDERFUL TIME OF THE YEAR

MRS. SANTA'S JIG

MUST BE SANTA

MY FAVORITE ORNAMENT IS GONE!

MY TREE HUNG WITH TEARS

NIGHT BEFORE CHRISTMAS

NUTCRACKER

NUTS ABOUT SANTA

NUTTIN' FOR CHRISTMAS

O, COME, O COME, EMMANUEL

O, CHRISTMAS TREE

O, COME ALL YE FAITHFUL

O, TANNENBAUM

OVER THE RIVER & THROUGH THE WOODS

PARADE OF THE WOODEN SOLDIERS

PAT-A-PAN

PINE CONES AND HOLLY BERRIES

PLEASE COME HOME FOR CHRISTMAS

PLEASE MR. SANTA CLAUS!

PRETTY PAPER

REINDEER BOOGIE

RING CHRISTMAS BELLS

ROCKING ROUND THE XMAS TREE

RUDOLPH THE RED NOSED REINDEER

RUN RUDOLPH RUN

SAINT NICK'S NIP

SANTA AND THE KIDS

SANTA BABY

SANTA CLAUS IS COMING TO TOWN

SANTA I'M RIGHT HERE

SANTA LOOKED A LOT LIKE DADDY

SCARLET RIBBONS

SEE AMID THE WINTER'S SNOW

SILENT NIGHT

SILVER BELLS

SKATERS WALTZ

SLEEP WELL, LITTLE CHILDREN

SLEIGH RIDE

STAR CAROL

STAR OF THE NORTH

SUZY SNOWFLAKE

SWINGLE JINGLE

THIS IS THAT TIME OF THE YEAR

TOYLAND / MARCH OF THE TOYS

TWELVE DAYS OF CHRISTMAS

UP ON THE HOUSETOP

VISIT FROM SAINT NICHOLAS

WALKING IN A WINTER WONDERLAND

WASSAIL SONG

WE THREE KINGS OF ORIENT ARE

WE WISH YOU A MERRY CHRISTMAS

WERE YOU GOOD THIS YEAR?

WHAT CHILD IS THIS?

WHERE ARE YOU, CHRISTMAS?

WHILE SHEPHERDS WATCHED THEIR FLOCKS

WHITE CHRISTMAS

YEAR'S END JIG

YOU'RE A MEAN ONE, MR. GRINCH!

ISSUE: What flexibility does Proposed Treasury Regulation §1.409A provide for structuring the payment of death benefits from an account balance NQ plan?

BACKGROUND:

Preamble page 71: "Where the time of payment is based upon the occurrence of a specified event (such as death), the plan must designate an objectively determinable date or year following the event upon which the payment is to be made."

Preamble page 72: "Once an event upon which a payment is to be made has occurred (i.e. death), the designated date generally is treated as the fixed date on which, or the fixed schedule under which, the payment is to be made. Accordingly, the recipient may change the time and form of payment after the event has occurred, provided that the change would otherwise be timely and permissible under these regulations."

Prop. Treas. Reg. §1.409A-2(b)(1)(ii) on page 189: "(ii) In the case of an election related to a payment not . . . . on account of death . . . , the plan requires that the payment with respect to which such election is made be deferred for a period of not less than 5 years from the date such payment would otherwise have been paid . . . .

MY THOUGHTS: This seems to say the 5 year delay requirement does NOT apply to death-benes. Thus, for example, if the plan said that the death-beneficiary's first payment was to be 14 months after the participant's death, then the death-bene could (within 2 months after the participant's death) elect to delay the start of payments, but not accelerate them (but also not need to delay payment for 5 years as the participant would have to if he were making the change). Does any one disagree with this?

Further, it seems that the plan sponsor could continually amend that part of the NQ plan that deals with the time and form of payments to a death-bene as long as the effective date of each amendment was at least 12 months in the future. Does any one disagree with this?

Alternatively, the NQ plan document could merely enable the Participant to specify the time and form of payment to his death-bene; provided that any change to it would not be effective for at least 12 months. Does any one disagree with this?