The Plan Document says that the company stock account of each participant shall be credited as of each anniversary date w/ the Particiapnt's allocable share of Co. Stock purchased and paid for by the Plan. This is not a leveraged ESOP.

My question involves the definition of "allocable share". Suppose the ER makes a cash contribution of 150,000 that is allocated based on comp to comp. Let's say that the ER purchases $150,000 of ER stock. Do I allocate the stock to the Participants in the same manner as the ER contribution that year or is it based on the ending balance of ER accounts?

A plan is amended to provide an Early Retirement Window (ERW) in 2004 but utilizing Rev Ruling 77-2 it's not recognized until 2005 ; the funding(cost) method was changed to FIL a couple of years ago and so it can't be changed to something like Aggregate this year ----- for those partcipants that qualify, the window amendment provides (1)enhanced accrued benefits (2) smaller early reduction factors and (3) the opportunity for immediate retirement and payment ---- some participants would not have been eligible for early retirement under the pre-window plan --- participants who opted for the window are "pending retirees" on the 2005 valuation date having made their benefit elections at the end of the 2004 plan year - many were lump sums.

My question involves the correct way to set up the amendment base - I'm thinking it would be A minus B where A is EAN-AL of the enhanced benefits for all those that elected to retire under the window.

My quandary is with B ?? Is it :

(a) the EAN-AL of the same window group assuming they retired under the

provisions of the pre-amended plan.

(b) the EAN-AL of the same window group assuming they terminated from

the plan with deferred benefits payable at NRD.

© something else ???

Any insights would be appreciated and I'd also like any thoughts on whether there should be any other base , e.g. assumption change - this doesn't seem likely since the assumptions for the 2004 valuation didn't include a consideration for a percentage of participants that would opt for the window.

Thanks again !!!!!!!!!!!!!!!

Ok, now I've got a question.

Suppose you have a DB plan where for a given plan year, let's say 2005, the participant would accrue an additional benefit of 50x, but due to 415(b) limitations, the participant hits the limit at 30x. The plan provides that 415(b) benefits will increase automatically for the 415(d) cost of living increases. What does this person accrue for 2005? If the plan is frozen for future years, is the benefit frozen at the 30x limitation, or did the participant "accrue" the full amount up to the 50x, and will thus receive increases even though plan has frozen all accruals?

I lean toward the former, but would appreciate opinions. Thanks!

Looking over some proposed calculations. Fairly basic questions

If someone has an accrued benefit that would exceed the 415 limit at age 70 1/2 but is reduced to the 415 limit receives minimum distributiions, is the maximum benefit at age 71 the age 71 415 dollar limit, or that limit less the pv of minimum distributions? Same question 71 to 72 for example, Doesn't the 415 dollar limit need to relect prior minimums?

Thanks for any help.

yes indeed.

the amazing chicken 'lays' it on the line by 'pecking' Nore Dame this week.

Does the 'ruffle the feathers' of you California folks? I'm sure Clucko doesn't care.

Will he get 'egg' on his face? only time will tell.

Hey, Clucko has picked the winner of the Nore Dame game correctly everytime this year. (We have a Notre Dame grad working for us and he looked it up)

I thought perhaps maybe this was just a 'cheep' gimmick, but then it dawned on me we have a 3-eyed fish that knows pensions, and a hairy 'what's it' who knows...um...I'm not sure what he knows, but he knows and thats good enough for me.

How does he do it?

from the website :

Put down two feed dishes, one representing one team and one representing another and whichever dish the chicken goes to first is the team that's going to win.

To see if Clucko picked your team, go to:

www.collegefootballnews.com

Our office completes the Schedule H or I using an accrual method. However, the report we use to complete the Schedule D is on a cash method. Therefore, the totals are different. Should we be using the same accounting method on both forms?

I have a client who failed to timely adopt a good faith amendment reflecting the automatic rollover requirements by the end of their first plan year ending on or after March 28, 2005. According to IRS Notice 2005-5, Q&A-16, the timely adoption of a good faith amendment allows an employer to retroactively correct any disqualifying plan provisions within the plan's EGTRRA remedial amendment period. However, what is the plan's remedial amendment period if it failed to adopt this good faith amendment? Is it the general remedial amendment period contained in IRC section 401(b)? If not, what is it? It does not seem that it should be the end of the initial EGTRRA remedial amendment period (before extensions) since IRC 401(a)(31)(B) did not spring into affect until regulations were adopted by the DOL.

I'm wondering the answer to these questions for two reasons: (1) If the remedial amendment period is the general rule in IRC section 401(b), do I still have time to timely adopt an amendment to reflect the automatic rollover requirements since my client has not filed their tax return yet; or alternatively, (2) am I eligible for the VCP fee for nonamenders in Rev. Proc. 2003-44, which provides for a 50% reduction in the VCP fee if a plan is submitted within the one-year period following the expiration of the plan's remedial amendment period to comply with tax law changes.

Any thoughts would be greatly appreciated!

I have a client who failed to timely adopt a good faith amendment reflecting the automatic rollover requirements by the end of their first plan year ending on or after March 28, 2005. According to IRS Notice 2005-5, Q&A-16, the timely adoption of a good faith amendment allows an employer to retroactively correct any disqualifying plan provisions within the plan's EGTRRA remedial amendment period. However, what is the plan's remedial amendment period if it failed to adopt this good faith amendment? Is it the general remedial amendment period contained in IRC section 401(b)? If not, what is it? It does not seem that it should be the end of the initial EGTRRA remedial amendment period (before extensions) since IRC 401(a)(31)(B) did not spring into affect until regulations were adopted by the DOL.

I'm wondering the answer to these questions for two reasons: (1) If the remedial amendment period is the general rule in IRC section 401(b), do I still have time to timely adopt an amendment to reflect the automatic rollover requirements since my client has not filed their tax return yet; or alternatively, (2) am I eligible for the VCP fee for nonamenders in Rev. Proc. 2003-44, which provides for a 50% reduction in the VCP fee if a plan is submitted within the one-year period following the expiration of the plan's remedial amendment period to comply with tax law changes.

Any thoughts would be greatly appreciated!

I realize this may be a redundant question but is it possible for a Simple plan to be taken over by a new broker/rep after the Oct. 1st deadline. What I'm asking is this considered a new plan and subject to the deadline or is it just a new account that could be opened any time because it falls under the same plan document.

I have a client who failed to timely adopt a good faith amendment reflecting the automatic rollover requirements by the end of their first plan year ending on or after March 28, 2005. According to IRS Notice 2005-5, Q&A-16, the timely adoption of a good faith amendment allows an employer to retroactively correct any disqualifying plan provisions within the plan's EGTRRA remedial amendment period. However, what is the plan's remedial amendment period if it failed to adopt this good faith amendment? Is it the general remedial amendment period contained in IRC section 401(b)? If not, what is it? It does not seem that it should be the end of the initial EGTRRA remedial amendment period (before extensions) since IRC 401(a)(31)(B) did not spring into affect until regulations were adopted by the DOL.

I'm wondering the answer to these questions for two reasons: (1) If the remedial amendment period is the general rule in IRC section 401(b), do I still have time to timely adopt an amendment to reflect the automatic rollover requirements since my client has not filed their tax return yet; or alternatively, (2) am I eligible for the VCP fee for nonamenders in Rev. Proc. 2003-44, which provides for a 50% reduction in the VCP fee if a plan is submitted within the one-year period following the expiration of the plan's remedial amendment period to comply with tax law changes.

Any thoughts would be greatly appreciated!

We have a client who has decided he wants to use his retirment plan to get into real estate development. This year he invested with a contractor and they built one house and sold it. The contractor and the plan split the profit. We told our client the wouldn't be any UBIT on the transaction if this was a one time deal as the plan did not own a trade or business.

Because of the success of the venture, the client wants to continue develping real estate. I have concerns regarding UBIT if he goes this route. If the plan owned a non-management interest in an LLC and the contractor (not a related entity) was the managing LLC member, would the plan still be subject to UBIT on its share of the profits? If so, is there anywhay the plan could do something like this and avoid UBIT?

Thanks for your help.

Dean Huber

I've determined that a stock option plan is subject to 409A and will be subject to the additional 20% tax. Does it have to be reported to the IRS? When does it have to be reported? Also, are there reporting requirements for the employer? Notice 2005-1 covers these topics but I'm having a hard time interpreting them and applying them to an actual situation. Any help would be appreciated.

Plan imposes a deferral limit for the year. Participant defers less than that limit during a portion of the year. Can this participant contribute a higher percentage than the plan imposed limit for the remaining portion of the year so that the total deferrals for the year in the aggregate do not exceed the plan imposed limit as a % of total compensation?

I just wanted to get some opinions about something. Plan has immediate eligibility with 1st of the month following hire date entry date. Person was hired 10/29/04 so entry date is 11/01/04. Enrollment forms were completed on or a day or two after hire date and returned to HR. First deduction did not occur for employee until first December payroll due to administrative reasons. These reasons are having to notify payroll to start deductions on next payroll run and getting enroll info to record keeper. Question: Is there are any requirement to go back and do retroactive withholding for this employee since he missed out on 2 payrolls in November before his deductions started? There was no administrative oversight and the HR people followed policy and procedure for enrolling this person. Meaning that all employees are treated the same and enrolled over the same time frame.

I do not work much with health & welfare plans, but I was asked a question, as to whether it is correct to include accumulated eligibility credits as a liability on Schedule H of the 5500. Any help with this? Any pros or cons?

Thanks

This may belong under the 5500's sections, but I'll try here as well. I do not work much with health & welfare plans, but I was asked a question, as to whether it is correct to include accumulated eligibility credits as a liability on Schedule H of the 5500. Any help with this?

Thanks

If a participant designates part of their elective deferrals as before-tax and part Roth 401(k) and there is an excess ADP, do you think the Plan can designate which source the excess comes from? Or do you think it has to be a participant election?

1.401(k)-2 of the proposed regs state a plan "may" permit an HCE to elect ... Do you take that to mean the plan can do it? And would the same be true as far as a 402(g) excess?

Any thoughts on what you may be doing? Allow participants to choose when they originally designate before-tax/Roth 401(k)? Or simply make it a fiduciary/plan decision?

I am working on a proposal for a DB and 401k PSP carve out. All employees are highly compensated anesthesiologists. The combined plans are top heavy. Do the participants in the 401k PSP need to get a 3% top heavy minimum or a higher top heavy minimum since there is a DB plan. There are no overlapping participants.

Is NUA treatment available on stock distributions out of an ESOP?

I have a client who is 74 years old and has a 403b plan with TIAA-CREF and Fidelity. She is planning to keep on working for a couple more years and wants to be able to delay taking her RMDs until she retires. My company is not an approved vendor for the college she works for. If I have her 90-24 transfer her accounts to a TSCA with me would she still be able to delay her RMDs? The plans do allow for transfers out. Thanks for any help with this.