I wondered what other TPA's out there are doing about force payouts above $1,000. We cannot find an institution willing to open an IRA without the IRA owner signature, so unfortunately if the amount is more than $1000, they've not been done. Many of our plans amended for force outs for < $1000, but those that didn't will continue to be a problem. What are you all doing?

Participant reaches normal retirement age and retires.

Wants to roll his account balance under qualified plan to a SEP IRA.

SEP IRA not connected to qualified plan.

Any reason this can't be done?

Thanks

Been looking all around and can't find any evidence that the IRS has yet released the Nov 2005 30-year rate and the Dec 2005 CL rates. Looks like the prior release came in the early part of November, but nothing on Checkpoint in December. Anyone know these rates yet?

Has anyone ever encountered a 1 day plan year?

Plan year was 12/31 to 12/30. Amendement is changing the plan year to 1/1 effective 1/1/05. So there is a short plan year from 12/31/04 to 12/31/04.

Does anyone know what kind of things to look for to determine if nondiscrimination (ADP/ACP, Coverage) needs to be done?

12/31/04 is a Friday and there were some employees who worked and who earned compensation. It is a 401(k) plan.

The pay period end date that included 12/31/04 was in 2005 sometime and the contributions were posted to the members accounts in 2005.

So I think it's safe to say that there is no testing that needs to be done. There was nothing allocated on 12/31/04.

Anyone have any thoughts?

When a 401(k) Plan participant terminates employment and subsequently requests to roll over his/her 401(k) Plan vested balance to an Individual Retirement Account (IRA), what are the requirements related to spousal consent prior to the roll over being executed? At the time of the request to roll over the account balance, the former participant has legally separated from her spouse but the divorce has not yet been finalized.

Also, with respect to opening the IRA account, does the account beneficiary have to continue to be the spouse?

If you can provide cites I'm sure one or the other party will demand them.

Thanks

Trying to establish new plan effective 1/1/2006 with 401k effective 2/1/2006. The plan provides for --

1. 401k defls.

2. discretionary nonelective contributions with a cross-tested allocation scheme (each participant consituting a separate alloc. group).

3. The ability to elect to utilize the 401k safe harbor provisions and to make either 3% SHNECs or SH Matching contributions.

The sponsor has only been in business for a couple years and is not making a lot of money. The owner wants to do something for himself and his EEs, but doesn't want to commit to much expense. The thought was to offer 401k and to provide a contingent notice regarding SHNECs (plan uses current yr testing). If business does well, these SHNECs can be made and the owner and his wife can make $15,000 in defls. It's unlikely that he will be able to afford or pass the general test in order to provide himself with additional (9%) cross-tested allocations.

It now occurs to me that the ave. benefit prong of the general test (which takes into account 401k defls) may not be met to validate the 3% SHNECs even if these are not provided to the HCE/owner. My question is whether these SHNECs satisfy the designed based safe harbor provisions?

Thanks for the help.

Trying to establish new plan effective 1/12006 with 401k effective 2/12006. The plan provides for --

1. 401k defls.

2. discretionary nonelective contributions with a cross-tested allocation scheme (each participant consituting a separate alloc. group).

3. The ability to elect to utilize the 401k safe harbor provisions and to make either 3% SHNECs or SH Matching contributions.

The sponsor has only been in business for a couple years and is not making a lot of money. The owner wants to do something for himself and his EEs, but doesn't want to commit to much expense. The thought was to offer 401k and to provide a contingent notice regarding SHNECs (plan uses current yr testing). If business does well, these SHNECs can be made and the owner and his wife can make $15,000 in defls. It's unlikely that he will be able to afford or pass the general test in order to provide himself with additional (9%) allocations.

It now occurs to me that the ave. benefit prong of the general test (which takes into account 401k defls) may not be met to validate the 3% SHNECs even if these are not provided to the HCE/owner. My question is whether these SHNECs satisfy the designed based safe harbor provisions?

Thanks for the help.

I have a client that owns an s corp and gets both w-2 compensation and Schedule C income from the company. Can I use both W-2 and the schedule C as his gross compensation when calculating contribution amounts, etc. Or can only W-2 be used?

Does the requirement that a plan be amended to permit hardship withdrawals pertain to those plan sponsors not in the affected area (Katrina)? We have several plans that do not permit hardship distributions, but they are not in the affected areas. Thanks.

Hi,

I have a very basic question, but I've been unable to get a clear cut answer from my online brokerage source. My scenario is that I have a company sponsored 401k and I opened a Roth IRA about 2 years ago. I got married last year and found out that by filing jointly our combined income put me above the limit to contribute non-taxable funds to my Roth account. My question is now, can I still contribute the maximum yearly allowable to the account but just not deduct the contributions on my tax returns?

My second question is basically the same, but applies to a Traditional IRA. I just opened(last night) one up online and see that again, my joint filing income level puts me beyond the limit of being able to contribute tax-free. Can I still contribute the max yearly allowable?

If the answer is yes, I would have a traditional, roth and a brokerage account. I would imagine that it would make the most sense to use the traditional and roth accounts for more active trading than the brokerage account? I'm not a very active trader if that helps.

I hope my question is clear and there is a simple answer. I'm really interested in putting as much away as possible, but feel somewhat dettered by my lack of understanding at the moment. Thanks in advance for any clarity!

A participant in a DC (money purchase) plan wants to rollover his money into an IRA since he was terminated from employment. The participant is divorced from his wife. The only reference to the pension plan is in the mediation agreement which was made part of the final divorce decree. It states that "if either party dies, the child shall be beneficiary of the husband's pension fund." There is no specific information in the agreement (child's name or information, plan name or information)

1. Shouldn't there have been a QDRO in this instance?

2. If not, can the money be rolled over?

3. Is the Fund obligated to protect the child's interest?

For a terminated plan, if there are participants who won't fill out the distribution paperwork but have balances greater than $ 1000, do we have to roll those balances or can we just send them a check? The new automatic rollover rules only seem to apply to terminated participant in ongoing plans.

A participant in a DC(money purchase) plan was terminated from employment and wishes to rollover into an IRA. He provided us with a divorce decree and mediated settlement agreement which states that should either party die, the child shall be the beneficiary of the husband's pension fund.

Can the fund allow the participant to roll the money in his account over to an IRA or must something be done to protect the child's interest?

Any assistance would be appreciated.

An employer uses a PEO for HR outsourcing, all employees are leased employees. Leased employees participate in the PEO 401(k) plan. The employer wishes to add a Defined Benefit Plan which would provide maximum benefits to the owners and the minimum meaningful benefit to all other employees.

If the employer sponsors the DB plan, can this plan be aggregated with the PEO 401(k) plan for 401(a)(4) testing?

This report will print a list of plans on the system

including plan type, vesting schedule, EIN number.

Open report in Crystal.

choose Report/ Select Expert and delete whatever is in there (otherwise you will get nothing)

This report does not print out of Relius. Use print Preview in Crystal only.

This report will only print the most recent valuation year (though you could modify that item)

ah, still at 9.1 but looks like this week the slowpokes finally migrate to 10

This may be a bit of a technical question, but hopefully someone can direct me to a good resourse. Here's the situation:

I am the administrator at our local church. We have a 403b7 plan through Vanguard. The plan docs are the VG template documents and in general the plan is set up to take only employee contributions because there is no 3rd party administrator no matching language, etc.

The church desires to make a large gift into the Sr. Pastors 403b as a one-time employer contribution ($100,000). [Actually there is husband/wife who are Co-Senior Pastors.] Initially I believed that it was not possible to make employer contrubutions without creating new plan docs. After some research, my understanding is that the Employer contribution in the 403b7 would indeed be allowed provided it meets discrimination testing - which I took to mean that despite not normally being subject to descrimination, it would be because of no plan docs. What we do for one participant we have to do for another (although I'm the only other participant and will be out of the plan for 2006). Since the $ amt is large, there are a couple issues.

First, I need to indeed find some language or documentation that the church can indeed make an Employeer contribution to a 403b7 without unique plan docs. (Per VG, it's okay, but they're not answering to the IRS, we are of course). And if it IS okay, then my understabding is that it must be based on percentage of income - and also must be done for each participant. Is that true or false?

Second, I need to confirm that I can shelter the whole $100,000. My understanding is the the aggregate contribution limit is the lesser of $42,000 ($44,000 for 2006) or 100% of compensation. Since the Pastors combined make about $100,000 my understanding is that we will be able to contribute $42,000 per person this year and/or $44,000 per person next year. Caveat is that about $40,000 of their pay comes as tax-free housing allowance and as far as I can tell (via FAQ on irs.gov) that is EX-cluded from total comp calcs, so their includable comp is about $60,000, which means we could do $60,000 in 2005 and $40,000 in 2006 to get to $100,000 (technically those would be divided up between the pastors - I'm just talking in aggregate numbers.) This is my understanding so far.

Third, since I am technically IN the plan in 2005, do I cause them to fail discrimination testing this year. Or because they are the Founding Sr. Pastors are there exclusions. And does discrimination just cover plan participants, or all hired employees? Etc.

I know it's a lot to ask, so thanks for any direction. (Fwiw, I have tried to work with several accountants, and it's a tough subject to find expertise)

GG

PS - for 2005 there may not be a discrimination issue since we can give them a one time bonus and have them defer it as an employee deferral. The limit on that would be $14,000 each, but they would also get a $3,000 years of service increase, which would be $17,000; times 2 people would be $34,000. Assuming 2006 limit of included income is indeed $60,000 ($30,000 each), then we'd be at $94,000 - which is at least *close*.

S-corp owner gets W-2 wages of $100,000. There are health premiums paid of $10,000 that are added on to his income on the W-2.

The extra $10,000 is subject to income tax but not SS Taxes? (Is that backward?)

Is plan comp $100,000 or $110,000?

Thanks (At least its not a K-1 question)

Does anyone know how to print a hard copy of a Thread or even a reply?

Posted this under the 5500 page and got no response, perhaps this is a better place for it.

I had a client ask me this...

Voluntary Long Term Disability, Life Insurance & Accident plans that employees pay through pay roll deduction. Statement from insurance company identifying the contract and broker commissions paid.

Since this is voluntary and employee paid, what if any reporting obligations do they have?

Is there an understandable source out there that can lead me through the questions that I need to ask the client to determine if they should file? I have so little contact with health plans that I haven't a clue.

Thanks for any help that can be provided.

At the risk of beating the proverbial horse ...

When I terminated plans in the past, for example, during the GUST RAP, I always adopted an amendatory agreement (or restated the plan document) as if I was amending the plan at the end of the RAP. However, with the Good Faith EGTRRA Amendment, it simply isn't as clear whether a detailed amendatory agreement (amending the specific plan sections and plan language) is still necessary. I have not been able to find anything issued by the IRS that states that the good faith amendment alone would be sufficient; and, logically, if the termination accelerates the RAP and the good faith amendment is NOT sufficient to meet the amendment requirements at the end of the RAP, it should not be sufficient now. However, I can't find where anyone is doing anything beyond the good faith amendment.

Has anyone filed for a determination letter upon the termination of a plan, post-GUST and pre-EGTRRA RAPs, with just the good faith amendment, the model 401(a)(9) amendment, and the automatic rollover model amendment and received an approval?

If not, any thoughts or comments on whether the full-blown amendatory agreement for EGTRRA is necessary?

Thank you in advance!