I have a client that was late once with a 401(k) deposit. Is it possible to have the key employees wave their right to lost earnings (and also pay less of a prohibited transaction penalty by only considering the non-key participant's deferrals late)?

If you have a plan year ending February 28, 2006, can they add the ROTH 401(k) feature January 1, 2006 or do they have to wait until March 1, 2006 (the plan year begining in 2006?

Can an emloyer offer a match on contributions exceeding 100%? For example, 200% match on the first 5% contributed?

Suppose a prohibited transaction occurred in 2000 and the amount involved was $500,000. The PT was never corrected before it was discovered by the IRS on audit. The PT involved a sale of an LLC interest. It doesn't appear that it would matter if FMV was paid or not ... a PT occurred. Does the 15% first tier tax apply for each year beginning in 2000 (let's assume PT occurred on 1/1/2000) and ending in 2005 (let's assume IRS discovered PT on 12/31/2005)? Additionally, is the 100% second tier tax an ADDITIONAL tax that could be assessed? This could result in a tax of 175% of the amount involved. Any help would be appreciated. Thanks. Ed

We have a client (C-Corp) with two owners that sponsors a non Safe Harbor 401(k) Plan. This year, one of the owners did not receive any compensation. For ADP testing, is he treated as a 0% deferral or does he need to be omitted from the testing?

Thank you for your assistance.

There was quite a bit of discussion about the "Use it or lose it" amendment that cafeteria plans should (but don't have to) adopt. However, I haven't seen much about amendments that must be adopted.

For example. does a plan need to adopt an amendment that addresses the new definition of dependent?

And does a plan need to adopt something formal that discusses health information in electronic format?

Normally, I get all kinds of reminders from various sources that time is running out on required amendments, but not this time. Maybe I haven't been looking in the right places?

A limited partnership (LP) wants to set up a retirement plan. LP employs 4 W-2 employees. There is one limited partner who owns 99% of the LP and the same person owns an LLC that is a 1% general partner of the LP. The LP is an investment management company.

Would there be a problem with them setting up a plan to cover the employees and the general partner?

A plan participant has an outstanding liability with the IRS. The participant has a small retirement balance in her 401(k)/profit sharing plan. The IRS is pressuring her to withdraw that money to cover her liability.

Is that legal for them to do?

Hello,

I have been paying into my 403b account through my employer for many years

now. (They match 200%, so it's a great deal.) This year I opened a Roth

IRA in addition to my 403b deposits. However, a surgery gone bad landed me

on disability (insurance provided through my employer) part-way into 2005.

I expected to go back to work this calendar year, but I now find it isn't going to

happen. Further, my doctor is unsure if I will go back to work in 2006.

Because my employer pays the premiums on this disability policy, I pay

federal and state income tax on the disability income, but I do not pay

medicare or social security tax.

My question is that if it turns out that I remain on disability through

2006, will I be ineligible to make deposits to my Roth IRA in 2006?

Further, does it make a difference if I start receiving social security

disability? (My employer's disability policy requires that I apply for

SSDI, which I did, but I was denied and have an appeal pending. As my

employer's policy is coordinated, any income I ultimately receive from SSDI

will reduce what I receive from my employer's insurance.)

One other question.... Let's assume I am not eligible to make deposits to

my Roth IRA while on disability. If I make desposits to my Roth IRA in 2006

expecting to return to work before the end of the year, and I end up not

working in 2006, what happens? I know I would have to retract those

deposits, but is there any penalty for doing so? Or does that depend on the

investment company? (My account is with Vanguard.)

And finally, can anyone point me to a source for all the Roth IRA rules and regulations?

Thanks!

Do you have to subtract an outstanding loan balance to get the total amount a participant can have as a hardship distribution?

upon our review of a 2 participant psp with an effective date of 1/1/95, they never updated for gust/egtrra, which we agreed needed to be submitted under VCP. upon digging deeper, the original non-standardized prototype doc was never submitted for determination. should this be disclosed under the VCP? we are updating to a gust approved Standardized prototype doc.

If a multiemployer fund is underfunded (due to performance of investments) can the trustee unilaterally require participating employers to pay more into the fund than is required under the CBE? There was a thread a couple of years ago but this wasn't really fleshed out. I guess it could happen in a reorg. But outside of that, I'm just not sure of the answer.

I have a 401(k) client that is currently matching @ 100% of deferrals up to a 4% deferral rate and the match is 100% vested from day one. Does this qualify as a "safe harbor" discretionary match? Many thanks for your thoughts and help!!

Gee Bee Fran

Sounds like a soap opera.....

I have a participant who named his fiance his beneficiary in 2000, later married and divorced her. He then remarried a co-worker, but never changed his beneficiary form. He passed away last week. Who is the beneficiary? Is it his current wife?

The participant also had an outstanding loan. If his wife wanted to pay it back before she takes the rollover, can she?

Thanks in advance.

here's hoping to see at least a few of you folks at the conference Nov 6 - 9.

have to give a talk, plus the boss is setting up a booth so I should be easy to track down. always nice to put a face with some of the names I see out here.

We currently sponsor a 401(k) (individually designed) - and recently purchased assets of another organization (assets only that we are setting up as a division that is wholly owned by buyer - not as a separate entity).

Aside from the discrimination issues, is there a problem with offering the employees who come with the new assets (division) a separate 401(k) plan covering just those employees? I know you can if it is a separate legal entity, but wasn't sure if the division throws that out of whack?

the 21st century actually began in the year 2001.

so this year is the 5th world series of this century.

This means, including this year, the Yankees will have lost 40% of the World Series in this century.

If the White Sox, the Yankees will be responsible for 100% of the Amrican League losses.

from what I can tell they have spent an amazing 900 million in the last 5 years to ccomplish this feat.

way to go. gotta love it.

oh, the Yankees have never won the World Series in this century.

I am part of a team preparing to terminate a long-established MEWA and am trying to locate any articles or other secondary materials or checklists that review the various issues and expected timeline with terminating a MEWA. So far I have not found anything particularly on point and would appreciate any suggestions other board members might have. Thanks.

I have a SEP that was set up by a previous employer. I am now a self employed consultant. Can I make deductible contributions to my existing SEP plan, or do I need to set up a new SEP for my current business? (In other words, are SEP plans company/employer specific?)

I have gotten conflicting information on whether you need earned income to convert a regular IRA to a Roth. Do you need earned income?