I have aplan with an ERISA FFL of $0, but there is an RPA floor. Do the existing bases get wiped out?? Thanks.

Facts: Company A is a brand new company. The company was formed on January 1, 2005. The same year they start a calendar year 401(k) plan - 1/1/05 through 12/31/05. The top heavy determination date will be 12/31/05 being the first plan year.

Q1) One of the key employee determination is an officer whose annual compensation exceeds $135,000 in 2005. However since this is the 1st year the determination date is 12/31/05. Does that mean that you use $135,000 compensation limit the first year as well as the second year while determining the key employee status?

OR

Q2) Basically it means that since there was no compensation in 2004 an officer cannot be a key employee in 2005. Am I correct?

How do you apply the key employee definition in case of an officer especially since the compensation limit is bumped up from $130,000 to $135,000.

Any IRC reference would be appreciated.

Thank you.

An Employer has 6 employees and wishes to cover 3 employees in a defined benefit plan and 3 employees in a profit sharing plan. They will commit to making a 25% of pay contribution to the PSP, so both plans will easily pass 401(a)(4). Also, both plans would be aggregated for 410(b).

The census should not change as all 6 are long term stable employees.

My understanding is that the 25% deduction limit would not apply as long as no employee participates in both plans.

Does anyone see problems with this arrangement?

Thanks much.

We currently have a self-funded Church Plan that we are contemplating terminating due to lack of sufficient participation (550 employees with only 150 currently enrolled). Lack of participation is mostly due to premium cost (most of the employees are service workers). We are exploring other avenues of medical coverage such as a classing out employees, implementing a carve out plan for management employees and a mini-med plan for the service employees.

Are there any legal ramifications that should be taken into consideration before making a decision to terminate the self-funded plan?

Are there any special notices that will need to be communicated to employees currently enrolled in the plan should the decision be made to terminate?

This plan IS NOT subject to COBRA.

I have found in several research sites the folloiwng fromthe 1999 ASPA IRS Q&As

2. Q. When can you terminate a SIMPLE IRA? Rumor has it that once you are passed the notification date, the employer must maintain the arrangement for the next entire calendar year.

A. It is either the notification date or the beginning of the next plan year. Though there is no official determination at this time, the conservative approach would be to use the notification date as the limit for termination.

My question - it was decided after 11/1 when the notice was required to be sent, to terminate the SIMPLE. If we do an amendment and send the participants another notice saying the SIMPLE has been terminated prior to the end of the plan year, is there a problem?

I could not find any recent quidance on this.

Thanks

Does the 6-month delay apply in the case of the death of a key employee of a publicly traded company?

Let's say a plan's normal form of benefit is a joint and 100% survivor annuity and that the plan offers a lump sum option actuarially equivalent to such. I have never seen document language the addresses the timing of when the spouse is determined other than at the annuity starting date, so it would seem possible for someone to manipulate the value of their lump sum benefit by marrying someone extremely young. Of course the flip side is their spouse could die, leaving them with a reduced benefit.

Has anyone had a plan that defined when the spouse is determined other than at the annuity starting date? Any thoughts? Anyone think this is a pointless observation?

if you like optical illusions try the following

http://gpsinformation.us/main/humor.htm

and then click on the first item: moving object illusions. and go to that link.

there are 60 of them, I particularly like the one that looks like a motorcycle driving down the road.

I would have posted that web site but there are other humorous things on this page. scrolling down to the dog and cat humor was the following picture entitled "why the dog left home":

good grief! Wonder what that thing eats!

Should diversification, 70 1/2 MRD, and an award to an Alternate Payee from the 401(K) account reduce hardship available dollars?

Participant takes a loan from her 401(k) Plan, but while that loan is outstanding the plan terminates...what happens to the loan?

I have a Safe Harbor 401k plan with basic match. The plan also has a discretionary match with no accrual requirements that matches catchup contributions only.

I believe that 410b would pass since all participants would be eligible for the Safe Harbor Match - since no accrual requirements.

Regarding ACP - since the discretionary match is limited to catchup contributions only - is this an example of HCEs receving a higher rate of match than the NHCEs; and therefore an ACP test would be required for the discretionary match?

A DB plan is in the process of being terminated (don't sound so shocked). Active and Vested Deferred Participants will be given the option to receive their benefit as a single sum distribution upon the approval of the IRS and PBGC. We typically provide the appropriate notice and election forms to the participants after the IRS does an intial inquiry, provided that the information requested is minimal. We typically do this to speed up the liquidation process, particularly if it is possible to liquidate the plan by year end.

The death benefit in the Plan is merely the QPSA.

If a participant dies while the plan is being reviewed (or prior to them making an election), it is my understanding that the QPSA would apply so that no benefit would be paid if the participant is single.

The question was raised on what benefit would be paid if the participant dies after making an election to receive a single sum distribution (QPSA or full accrued benefit without cutdown for QPSA)? Would it matter if the plan has received a fdl but was merely waiting to receive a bulk of the election forms?

This may be a reason to postpone the sending of notice and election forms until after the approval process is completed.

Please let me know if there is official guidance that I am not finding on these matters. Thank you very much!

I think I know the answer regarding this.... but I thought I would get thoughts of others.

I have a 401k plan that made their 401k deposits for the owners from a 12-31-04 bonus check in January 2005. This is the initial plan year, and none of the employees deferred; hence the owners are the only participants with account balances. Since this is the initial plan year, top heavy is determined from the balances at the end of the plan year. Are deposits in transit excludable since they were not in the plan 12-31-04?

Employer failed to make elective deferrals for exmployees for one payroll period in August '05 for a limited number of employees who had be laid off and were receiving unused vacation pay and severance payments in the same check. We have determined that we qualify for self-correction under the IRS correction procedures. We don't qualify for the self-correction exception because the employees will not have 9 months to "make up" the contributions (because we are so late in the year and the employees have been laid off). The employer would like to make the correction ASAP. My understanding of the correction procedures is that the employer makes a contribution on behalf of these employees based on the ADP for the group, either HCE or NHCE. My question is can the employer use the ADP for the non-highly compensated group from the last plan year instead of waiting until the ADP for this plan year is calculated sometime early next year?

Partners deferred into their plan during the calander year of 2004. They had a net loss in the partnership. What should be done with the deferrals and match contributions on behalf of the partners?

We were recently informed by our plan administrator that a former employee was paid more than the amount he accrued in our companies profit sharing plan. A letter was sent to the plan participant notifying him of the error and we made a request that he return the overpaid money to the plan. The participant has not yet returned the assets.

A few questions:

1) What law(s) is this person breaking if he does not return the money

2) What is a reasonable amount of time before one takes legal action to get the funds returned.

thanks

Could someone clarify whether it is required that we withhold the 20% for Katrina distributions?

These are being processed as terminations, becasue the company is shutting down. They aren't hardships.

What I am using came from ASPPA, and is below. But, I have heard conflicting opinions....

Thanks!

"If an individual receives a qualified Hurricane Katrina distribution in 2005, that amount is included in income, generally ratably over the year of the distribution and the following two years, but is not subject to the 10-percent additional tax on early distributions. If, in 2007 the amount of the qualified Hurricane Katrina distribution is recontributed to an eligible retirement plan, the individual may file an amended return (or returns) to claim a refund of the tax attributable to the amount of the distribution previously included in income. Under the new law, these qualified Hurricane Katrina distributions are not subject to the mandatory 20-percent withholding."

I need a to-do list, along with due dates, for a merger of two DB plans. For example, file Form 5310 30 days prior to the merger, notify PBGC x days, notify participants, etc.

Any help is appreciated.

Thanks.

I have a PS that terminated 5/31/05. All participants have been paid out except for one new doctor who has a balance of around $42,000. He's going through a nasty divorce and doesn't want to send in his paperwork now. The owner of the practice wants to pay out this doctor and close the plan.

This new doctor only has PS money in his account - no merged MPP money. There is no J&S on the PS money. Can he be paid out without his wife's signature?

If he still refuses to send in his paperwork, is our only option to roll his balance to an IRA?

Help!

does anyone know whether the IRS still uses Forms 668 A and W to levy retirement benefits? And, if so, when it was last updated?