Does anyone know of a good article that expalins the myth of double taxation of loans takent from a retirement plan?

Is vesting credit required for 2 years of service where there is an overlap of the first year of employment with the vesting computation period (plan year)? If yes, do you have a cite?

Does the plan document have to state the match contributions can be applied towards the top heavy contributions?

in filing for a multiple employer plan, does one only need to file one form 5500 and multiple schedule T's for each of the adopting employers ? what will be the participant count to be reported on the form 5500 in relation to the adopting employers ?

in filing for a company that maintains qslob's, what are the rules in completing the Schedule T (or T's) ?

Please give reference to the codes on these multiple employer and qslobs issues.

As mentioned in my earlier post, I have a client that could not make the minimum funding requirement for the 2004 plan year (ending 12/31/04) thus creating a funding deficiency.

I just want to verify that a PBGC Form 10 is required regardless of the size of the plan and that the participants must be notified of the failure to meet minimum funding, again, regardless of the size of the plan?

Other than the 5330, Form 10, and participant notice, am I missing anything with respect to the failure to meet minimum funding for the plan year?

Any help with is appreciated. Thanks.

I have a few clients that are considering the ROTH 401(k). I know that extra admin is required. I was wondering what other people were going to be charging. I was thinking of a per participant charge instead of a flat fee. I was just curious as to what others are doing.

In addition an attorney told me that his clients would not pay for the cost. He wanted the participants to pay the extra cost. Does anyone know if the DOL would allow this to be charged to the employee?

Is there any definition of when an extended “leave of absence” would be considered a termination of employment for purposes of RMD?

Clearly, it seems reasonable to require that there be a real expectation by both the employee and the employer that the employee will resume working. However, is that sufficient?

I note that there are several discussion of the opposite problem of “sham terminations” relating to the problem of in-service distributions, but I did not find any discussion of the problem of “sham continuations” with respect to required minimum distributions.

Joe Smith rolls his money from an IRA into the ABC Retirement Plan. ABC Retirement Plan only allows for hardship distributions prior to separation of service. Is Joe's rollover monies subject to this or can he take it at any time?

The company has a location in Denver and has opened another company in Dallas with the same ownership. The plan wants to offer a higher match formula to Denver and a lower match formula to Dallas. It is my understanding this is a benefits, right and features issue. Would we have to do rate group testing for each office? Average benefits on the whole? Any advice would be appreciated.

Thanks!

Can a grandfathered governmental 401(k) plan merge into a 457 plan?

Due to attribution I'm sure we have controlled group issues. He has employees and a 401(k) plan. She has no employees and a SEP.

Because of attribution of ownership wouldn't husband's employees also need to be covered under wife's plan?

She'd like to up her contributions so we're thinking of having her sign on as a participating employer in husband's plan. Any issues there?

Does anyone remember when the participant loan regs were issued that required principal and interest repayments at least as frequently as quarterly? 86? Anyone recall the specific tax act?

What taxes are imposed for 125 deductions?

We're having a bit of discussion on this subject, and there are two opposing viewpoints (at least). Assuming you have a 2005 plan year, and you are determining the benefit accrual, and that accrual is based in part on pre-2002 compensation:

1. You can use 200,000 for all years prior to 2002, and the limit as adjusted for COLA's for years after 2002, but you cannot apply the current increased limit to years prior to 2002. (This happens to be the side I fall into)

2. You can take the current limit as adjusted, and apply it to all years, including years prior to 2002.

Opinions? Thanks in advance.

Plan year end and fiscal year end is 12/31/04. Plan sponsor could not make the minimum funding requirement for the 2004 plan year (due 9/15/05).

When is the Form 5330 and the 10% excise tax due? The instructions say "7th month after the end of the employer's tax year or 8.5 months after the last day of the plan year that ends with or within the filer's tax year. That means it is due on 9/15/05, the same day as the minimum funding requirement. Is that right?

Then, if you want to extend the 5330, according to the 5558 instructions, you must file a Form 5558 in time for the IRS to act on it before the normal due date of the Form 5330. That means you would have to file the 5558 to extend the 5330 before the due date of the minimum funding requirement that sets this whole process in motion.

I must be missing something because this does not make sense to me.

Participant wants to take a hardship w/d from a 401(k) Safe Harbor Plan. Can they take all contributions made from the 401k and SAfe Harbor portion, minus any earnings?? Or are they only allowed to take the 401k portoin?

The document says the following:

Nonelective and basic or enhanced matching contributions under the Safe Harbor CODA Contribution provisions are subject to the same distribution restrictions as Elective Deferrals except the Safe Harbor CODA Contributions specified here may not be distributed under the hardship distribution provisions.

The matching contributions that are made to your account to automatically meet certain nondiscrimation requirements are subject to same distribution requirements as your Elective Deferrals.

What does this all mean? What are this participants options?

Its a 401k & Safe Harbor Matching & Profit Sharing Plan. What is he able to take from?

Can a Roth IRA be rolled/transferred into a Roth 401(k) plan?

Is a 4221 withdrawal liability estimate binding? The estimate was way off from what was assessed and we are questioning the value of the estimate if it is not binding on the fund in some way.

Also, are the liability assessments REALLY negotiable? It seems like a solvent employer doesn't have any leverage, but we understand that technically, the Trustees may settle claims for withdrawal liabilty. Does it really happen?

Based on the following from Janice Wegesin's 5500 Preparer's Manual (Aspen) - which is a fine publication, and one I do not mean to disparage in any way! :

*****

The following are common issues raised with regard to fidelity bonding required for pension plans:

1. For purposes of indentifying nonqualifying plan assets held by small pension plans. Common examples are certificates of deposit or Israel Bonds. Typically, these certificates and bonds are physically held by the individual(s) named as plan trustee.

page 3-11

*****

there are some in my office who interpret this as saying any CD that is part of plan assets is a nonqualified asset. And by equivalence they extend this definition to checking accounts (because a previous version of the manual included them with CD's and IB's, notably absent in the current version). Granted Israel Bonds are usually a headache to start without further complicating them...

But has anyone else read this section and interpreted it this way? It seems a little too "broad stroke" to me. I could see reading it as "a CD or Israel Bond held in the name of the individual as trustee is a nonqualifying asset"; that just goes with what pension people have been saying for years: accounts must be set up in the name of the plan. What gets me is that nothing I see in the section quoted says yes, these are examples of nonqualified assets; it says these are "common issues raised"; what does that really mean?

So far, I got a reason of "that's they way we decided to interpret it a few years back, and we'll check when we've got some downtime", but I was hoping to have a solid case for the opposition by that time.

Thanks...

Let's say a plan fails their 1/1/2005 to 12/31/2005 ADP/ACP test. They have until 12/31/2006 to make a correction - whether that is in the form of a QNEC to the NHCE or refunds to the HCE's.

Now, let's say that they DON'T make a correction by 12/31/2006. So now the plan is in an operational failure.

One option is the Self Correction Program. There is the One-to-One correction method described in Appendix B of Rev Proc 2003-44. And there are some other options described in Appendix A.

The Bottom-Up QNEC is not a safe harbor correction method, but let's say that this plan want to use this method to correct their operational failure.

The Final regulations just limited Targeted QNEC's (including the Bottom-Up) to the greater of 5% or twice the plans representative rate.

Since this doesn't go into effect until the 2006 plan year, does the plan have to limit the Bottom-Up QNEC when correcting the 2005 ADP/ACP test?