Who would you recommend for seminars on Cafeteria Plan technical issues?

For determining a control group under a brother-sister relationship, is the common ownership threshold still 80% and the identical ownership threshold still 50%?

Someone is suggesting that the common ownership threshold has recently been reduced to 50% or some lower percentage than 80%.

Thanks

If a participant fails to take RMDs for more than one year and then makes up for it in a subsequent year - taking all required up to that date - how is the distribution taxed? Is it all taxed in the year of distribution, or does the participant have to amend previous tax returns to include what should have occurred?

I have a 401k client with an age 21 / 30 day eligibilty requirement. They were not letting PT employees defer until they reached the 1,000 hour mark, which many nver reached. Once we discovered they were doing this we referred them to counsel.

The attorneys (a well-known, large firm in our state) told them that the IRS was preparing a new ruling that could reduce the cost to fix the problem my client has. Has anyone heard anything about a new ruling for correcting this type of operational failure?

Thanks in advance!

Have a 50+ (9/30/05 fiscal) client that wants to max the PS contribution. Deferred $17,950. Can I calc the contrib so that he gets $45,000, or would only #3,950 be considered a catch up?

If a plan has a reduction in benefit accruals effective at the close of business as of December 31, 2005 and a 204(h) notice is required, what is the last day the notice can be mailed? (assume I mus provide the 45 day advance notice)

Will a mail date of November 16 be OK ? Is the notice considered provided on the date of 1st class mailing or do I need to back up the mail date to assume a day or two for delivery?

Is anyone aware of any type of software available to perform non-discrimination testing in a cafeteria plan? Thanks.

I did not see a thread on point here. We have a Multiple Employer Safe Harbor 401(k) plan. The primary sponsor is being acquired by a larger firm with a non SH 401(k) plan.

The question becomes - can the SH plan survive after the transition period?

If we can manage to have the new and old each be 410(b) groups, I think so but would like confirmation.

If we cannot keep them as 410(b) groups, what happens? Consider that this might not be known until after the year end, meaning we apparently are testing a SH and a NON SH plan together.

Note that the documents do NOT automatically include affiliated employers.

I remember seeing an article on the advantages and disadvantages of an employer participating in a multiemployer pension plan. Does anyone have the cite to this article? Thanks.

Am I right to assume that if I have four Roth IRA's, I can only contibute a TOTAL of $4000.00? For example, would I be maxed out for the year if I contributed $1000.00 each to all four?

I believe that there is a private letter ruling allowing a non-religious non-profit hospital to provide a parsonage allowance to a hospital chaplain under Section 107.

Is anyone aware of other instances in which non-religious, non-profit orgs have made use of the parsonage allowance? I am particularly curious about assisted living/nursing home settings.

Thanks much.

Can someone help me determine if I am reading the definition of "de-identified information" correctly? Reg. 164.514(b)(2)(i)© seems to provide that it is OK to not remove an individual's year of birth in creating de-identified information. In other words, it looks like a de-identified record could not include an exact birthdate, e.g. 1/1/1973, but could show the year of birth, e.g. 1973. Any thoughts?

I audit a profit sharing plan sponsored by a not-for-profit org. Employee salary reduction contributions are made to a 403(b). The Plan Sponsor is considering terminating the Profit Sharing plan and making contributions to the 403(b). I am aware of the the Title I requirements that will be triggered should we allocate employer contributions (either match or non-elective) to the 403(b). I am also aware of the 415 issue but this is not as much a consideration as this not-for-profit would never have the $$ to max. I understand that we can use permitted disparity in the allocation. Can they use a cross-tested formula?

Also, I would think that we could still impose the two years of service requirement on the non-elective contribution's eligibility. (100% vesting will apply). Do you agree?

IRA owner already begins taking RMDs. Designated beneficiary is spouse (7 years younger). IRA owner dies in 2005.

Is it correct that the remaining RMDs will be calculated using the spouse's life expectancy and the Uniform Lifetime Table?

Thank you!!

My individual life insurance client has a heath insurance program at her firm which I am unfamiliar with and was hoping one of you could help me out. She was a regular employee in the state of California covered under the group health plan. In the old employee handbook, it states that any employees living outside of California will receive a $300.00 health insurance stipend with which they can purchase health insurance on their own, since the group plan offers limited access to providers out of state. In the most recent copy of the employee handbook (issued this month), this benefit does not appear. My client is planning to move from California to Washington D.C. and would like to receive this $300/mo stipend.

1. Can the employer simply "remove" this benefit (as it appears that they did based on the ee handbook)?

2. Assume that other out-of-state employees are still receiving this benefit. Can my client make a case to receive this benefit as well?

3. Is this sort of benefit subject to any sort of non-discrimination requirements? For example, if my client wants to receive this benefit could she negotiate to receive this benefit even if the employer does not give this benefit to everyone that moves out of state?

Any advice you can provide would be greatly appreciated.

Thanks!

A participant had a loan from a 401(k) plan. When the loan paid off, the payments were never stopped, resulting in 16 additional payments totaling $7000 going into the plan.

We are taking over this plan and it is not clear to us why this was not noticed either at the payroll level or at the recordkeeper level.

What is the required method to correct this? Have the plan issue a check to the participant?

If the payments were invested in the money market fund, do the interest and earnings on the overpayments need to be refunded? If they invested in funds that are worth less now than the amount of the overpayments, is just the current market value refunded?

Any reporting that needs to take place to get this all straightened out?

Does anyone have any input:

Hypothetical - Company A's assets are acquired by Company B during the Plan Year. Company A and Company B maintain 401(k) profit sharing plans. Company A will stay in business through the end of the Plan Year to collect receivables, etc.

Do the employees of Company A have the ability to receive annual additions greater than $42,000 ($46,000 for those who are catch-up eligible)? I can make an argument that they do, because A and B are not in a controlled group or affiliated service group.

Does anyone have any thoughts either way? I can't find a solid answer.

Thanks!

An employee earns $10,000 the first half of the year and defers 6% ($600) into their simple IRA plan. The employer then contributes the 3% ($300) to that persons account as they are matching on a pay period basis (versus year end). The second half of the year the employee earns an additional $10,000, but elects to defer nothing.

Is the employer require to fund an additional $300 since the person made $20,000 and deferred a total of 3%, but the employer matched only 1.5%? Please advise.

Elfman

I'm setting up a new calendar year Cross-Tested PS plan effective 3/1/05. This is the date the company incorporated and started business.

For this first year, will the $42,000 max contribution and the $210,000 max compensation limits be prorated for 10/12 of the maximum?

My mind is drawing a blank. Thanks!

We have a plan on a Principal document - their former TPA. It is update, so we are continuing to use the document. There is a limit on the deferral of 10%. The sponsor want to eliminate it for 2005. Is an amendment we draft to change this to eliminate the limit sufficent enough for a document that we do not sponsor?