When calculating the RMD for beneficiaries (children of deceased mother) does it need to be recalculated each year based on the beney's life expectancy or can it remain a flat amount? Thanks!

Does anyone know when we should get any more information on these regulations from the IRS?

Are there any legal issues caused when an employer plan sponsor gives an employee the option of either waiving participation in the plan or not being allowed to work additional hours for the current plan year in order to keep the employee below the 1000 hours requirement for a contribution allocation? The employer has limited funds available for contributions and does not want to contribute for new employees. Note that the Plan Document does allow waivers of participation.

Are employers who maintain a premium-only plan (125 plan) with fewer than 100 employees required to file a Form 5500? I don't know what the status of this filing is. Thanks.

I know that a Form 5500EZ filer is not eligible for the DFVC, but does anyone have a suggestion for how to handle delinquent 5500EZs? I have a situation where a friend failed to file their 2003 5500EZ and had a balance of $.27 in 2004 when they terminated the plan. They haven't heard anything from the DOL/IRS and have the forms ready to send. Does anyone have any suggesitons on how to proceed?

I am puzzled. I withdrew $10,000 to fund a purchase of a new home from my Roth IRA. However, I recently came into extra dollars and I would like to stick some of that money (about $6,000) back into my Roth IRA to replace the money I took out. Can I do this without running afoul of the annual contrabution limit? I have already contrabuted $3,000 for this year.

Can a new Federal employee who has maxed contributions to his previous state employer through a 457 Deferred comp plan this year now contribute additionally in same tax year to the Federal Thriift Plan (a 401k look alike but technically 401(a) /501(a))?

I just moved from the State (of WA) to the Federal Gov. The Federal Thrift Savings Plan (TSP) says it is ""like" 401 (k) s" but actually references 401(a) and 501 (a) in it's not very up to date plan materials. I have contributed to this year's annual max (including >50 age catch up ) to my previous employer's DCP 457 plan. Can I now contribute to the max (it is a % and total max) to the Federal Thriift Savings Plan also? Even better can I use the Thriift Savings Plan's own age > 50 catch up too ?!

The literature on 457s does say that the accumulated maximums for the 457 " no longer affects maximums for 401(k)s" but does not mention the Fed Thrift Plan . Unfortunately the Federal Thrift Plan's materials which appear out of date just says that (Part 2 "Participating in the TSP and another Tax Deferred Retirement Plan" page 4) " ..relates to excess deferrals made to the TSP and other qualified employer plan as described under sections 401(K), 403(b), 408(k) , 501© (18) . It does not mention 457s. It then says that the elective deferral limit applies to the total of all contributions to these in the year....

The IRS, TSF web sites have not been helpful so far.

Thanks, I would be very grateful for advice, suggestions, resources .

Just looking at a new (to us) plan established in 2001.

Facts and circumstances are as follows:

Plan established in 2001 with immediate eligibility; sources include employee deferrals and an employer match on deferrals.

Plan amended beginning of 2002 to get rid of match.

Our population available to us solely focused on people with account balances as of 12/31/2003 (calendar year plan).

Based on this population (which I think makes the circumstances WORSE), there were 53 participants hired in 2002 and earlier; there were 34 participants terminated in 2002, mainly on two specific termination dates.

Thanks to the large payroll company previously doing admin, reallocated forfeitures on the 2001 match were identified as a separate source in their accounting (presumably reallocated in future years based on current year comp); these totalled around $104,000 by end of 2004.

Looks to me like a partial termination occurred given 34 out of 53. Any comments?

Question ; (not been able to find it anywhere on the net)

Can you direct transfer a Roth from company "A" to company "B" without incuring any withdrawal penalty imposed by company "A"? Are there any set rules?

I was told that is common practice as a way to discourage asset movements? Is there any truth to that?

For the sake of consolidation, I would like to move my Roth to a much desired institution.

Thnx

A DBO plan provides (appropriately enough) benefits upon an employee's death, and no lifetime retirement or disability benefits.

Is the plan a welfare plan or pension plan under ERISA?

If the plan requires employee contributions, is a trust required?

My tentative answer is: it's probably a welfare plan, and trust is required.

I want to avoid the trust requirement. The DOL's nonenforcement policy in Technical Release 97-01 doesn't apply to unfunded plans. However, top hat pension plans are exempt from the trust requirement, and it seems inconsistent to apply it to top hat welfare plans. I don't know of any DOL enforcement in this area. Anyone have any recent experiences? I'm not entirely uncomfortable taking the position that the plan is a deferred comp plan exempt from 409A.

Our client (Parent) sponsors a single employer 401(k) plan covering several control group members. Parent company is selling a subsidiary (which will become an unrelated employer to parent) in October but desires to continue covering the subsidiary in the plan post-sale. Parent is converting the plan to a multiple employer plan as of 10/17/05 to accomplish this.

QUESTION: How will ADP testing be performed for parent and new unrelated company for 2005? Is the plan tested as a single employer plan through 10/17 and then tested again as a multiple employer plan as of 10/17 through 12/31? Or, is the plan tested as a single employer plan through 12/31 treating the employees of the unrelated company as no longer eligible as of 10/17 (and then testing the unrelated company separately from 10/17 through 12/31)? Or none of the above?

DC plan has life insurance policies. In addition to reporting on Part III of Schedule A, I believe the cash value also needs to be reported on Schedule H.

My question: what line is normally used to report this? The only insurance policies that seem to be specifically mentioned are insurance company general accounts/unallocated contracts. [Line 1.c.14]

Would you put this in the "other" line -- line 1.c.15?

Thanks for your help,

Casey

A doctor's office with 4 doctors and about 30 employees.

One doctor decides to leave the office to start a separate practice and she is taking a nurse and a nurse practitioner with her. The nurse and NP only worked for the one doctor who is leaving, they did not perform any services for the remaining doctors. All three are not fully vested.

The split is not on amicable terms.

Would this possibly qualify as a partial termination and allow all three to become vested?

TIA

Owner A and Owner B each own 50% of corporation X (a c-corp). Company X has a 401(k) plan with a calendar plan year. As of 04-30-2005 A & B go their own way and dissolve company X.

Owner B starts his own company and wants to take over the X 401(k) plan that he was in and continue contributions etc. for the employees of X who went to work for him.

Is it okay to amend the ABC plan to list a new employer with new EIN and just continue the plan showing a change in sponsorship of the plan on the 12-31-2005 form 5500? Is it to late to do this amendment now? Does X have to terminate the plan and Owner B start his own plan and roll over to his own plan?

I do not work with SEPs very often and am always confused by controlled group questions so am hoping others can help me out.

Two unrelated business partners each establish their own single member LLCs and each establish a SEP in the name of their single member LLC. (Obviously the single member LLC is disregarded so the SEPs, I assume, are basically treated as if established by a sole proprietor?).

The two business partners, in turn, use their single member LLCs to each take a 50% interest in an S corp. which is their principal business venture. The S corp has no employees--just the two owners--and has been operating for several years in this form.

In addition, the two individuals recently decided to each take a 36% individual interest (not through the S Corp or their LLCs) in another, well-established corporation that has several employees. Although the 2 individuals each individually own 36% of the company, the remaining 28% is owned by various unrelated individuals or entities.

Accountant seems to think that the employees in the new company must be counted as controlled group employees and allowed to participate in the SEPs previously set up by the individuals through their single member LLCs. Given that the 2 individuals do not effectively control 80% of the new company, I cannot see how there is any argument that the new company employees would have to be included or covered under the SEP. (Even if the two individuals did own a combined 80% of the new company, I'm not sure the new company employees would have to be counted.) What am I missing?

An April year-end plan terminates on 4/1/2005. Come 10/1/2005, the plan sponsor decides to call off the termination and proceed merrily along with the plan. Being this termination recission is past the 412©(8) deadline do I:

a) continue to prorate the NC and amortization bases by 11/12 or;

b) treat the plan as not terminated and not prorate them?

I can't say I have ever had this happen before. However, I am leaning toward the latter option as Rev. Rul. 79-237 describes a plan that is terminating and this one is not, well at least not now.

In reading the new comparability rules, it seems that a partnership can make comparable contributions to the HSAs of partners and make no contributions to the HSAs of employees of the firm and pass the comparability test. Am I missing some potential nondiscrimination problem here?

Is the Roth 401(k) that goes into effect 1/1/06, available as a Roth 403(b)? Sorry if this is a stupid question.

Is there a prohibition against transferring non-employer stock assets from the ESOP portion of a KSOP to the 401k portion? The KSOP in question will not receive any further contributions of employer stock. There is no encumberance. The plan sponsor is a sub-s corporation that pays very significant dividends on the stock.

The plan sponsor would like to get the dividends moved to the 401k portion of the plan to more easily facilitate participants self-directing the investment of these funds and to get away from a future possible problem of the ESOP not being invested primarily in employer stock (knowning this may or may not be a real problem). The question is whether there is any reason making such transfers is not permissible or advisable.

I recently attempted to do a full-amount hardship withdrawal from my 401K (which I undoubtedly qualify for - putting myself through school and attempting to buy a home.) I have been told that I can not withdraw but instead have to take out a loan and that I am eligible for only 50%.

But it gets better. If I elect to do this, not only does it incur an additional payment for me (to repay the loan), it also prevents me from accessing the other 50% should the need arise because it is used as collateral on the 50% loan.

What is wrong with this picture? Doesn't hardship truly mean what it implies? Can anyone address whether or not I can actually withdraw the full amount and if so, how?? My pension fund company is being extremely difficult and insists that there is only one choice - the loan. Then I ask you, if that is the case, what is the purpose of the hardship option??

Thank you for any and all help that anyone can offer.