Are 401(a)(9) amendments required by 12/31/2005? Thanks.

I have a CPA group which has 19 employees, and will have 19 employees when it renews January 1. The carrier will charge the 67-year-old employee enrolled in Medicare $286 instead of $576 if the group was over 20 employees. They will charge that amount until the next renewal. We know that the employee number will be over 20 before tax season is over and drop to 19 in May. Has anyone had any experience or know how Medicare would treat claims for this 67-year-old if the claims were incurred when there were more than 20 employees? Thank you.

Bill Lehnertz

Does anyone know where I can find detailed information on the states that have put in HSA's as an option to their employees?

I appreciate any help!

If you retain an hour rule or employment on the last day rule with a discretionary match in a safe-harbor 401(k) plan------do you have to test both the ADP & ACP percentages or just the ACP?

We have a prospective new client that feels that any distributions made to former employees who have moved to another state must have withholding taken out of their distributions for that state. Other than a new rule effective Jan. 1 in Nebraska for mandatory state withholding we don't want to have to comply with that suggestion and/or have to research into each state we may have a payee address for to determine whether or not we have to withhold income taxes for that state, set up a state tax id number, and comply with remittance instructions.

Does anyone have any suggestions or guidance on this issue? Thanks

Has anyone had an application accepted? I've heard lots of rumors about how hard is was/is to get them approved.

Just curious.

I was looking for feedback from others regarding the 2006 safe harbor notices. At the ASPPA conference, everyone was talking about the "new" notice requirements. We have been using a notice which I think is pretty comprehensive, but when I look over the "new" notice template, I see it contains much more information especially regarding "other" employer contributions to the plan, availability for withdrawal of those other contributions, vesting, etc. Is it really required to have all of that additional information in the SH notice? Our notices have always including information regarding eligibility and withdrawal restrictions as it pertains to the safe harbor contributions, but not on the other employer contributions that MAY be made. One of the IRS speakers at the conference said that notices by reference to the doc or SPD that didn't spell things out would probably not be acceptable. any input appreciated.

We deal with a few governmental money purchase plans whereby if an employee elects to voluntary contribute some additional money to the plan, it must be done on an after-tax basis.

Could a ROTH 401k be added to MPP?

Does anyone have a good participant statement vendor that they use and recommend?

How are Highly Compensated Employees determined in Multiemployer plans? For the ownership %'s, is it ownership with a single employer? For the dollar threshold, it is based on compensation earned from ALL employers within the multiemployer plan?

Example #1: John Jones owns 100% of ABC Co. His son, Jake, is a member of a union that sponsors a multiemployer plan. Jake earned $50,000 for the 2004 calendar year, working all year for ABC Co. He clearly doesn't meet the dollar threshold. Would he be considered an HCE in the multiemployer plan due to attributed ownership?

Example #2: Mike Smith is a member of a union that sponsors a multiemployer plan. He works for Company A for 5 months and makes $48,000. He works for Company B for 7 months and makes 60,000.

Is his compensation combined for the year ($108,000) for HCE determination purposes?

Does anyone know if a fidelity bond would be required for a plan with only the owner and spouse, no employees? We recommended that they obtain a bond for 10% of plan assets, but they are questioning why one is needed since they are the only ones handling money. We have not been able to find any exception to the 10% of plan asset rule.

I'm trying to come to grips with the 404© requirements. One of major concern is the requirement that participant investment instructions be given to an identified plan fiduciary who is obligated to comply....

Usually self directed accounts are set up with a mutual fund company, the money is transfsered into these accounts and the participant can direct investment as he/she deems desireable. They make a phone call or invest via internet. There is no fiduciary involved at any level of this. At best the broker will respond to participant questions, but he is not a fiduciary and does not receive direction.

How are you dealing with this core requirement?

Pretty basic question, I'm sure, but are 403(b)s required to separately account for 401(k) rollover contribs?

Working on a proposal for a new 1-person DB plan effective for 1/1/2005. The sole participant (obviously a 5% owner) attained age 70 1/2 in 2004. NRD would be 1/1/2010 under the Plan. Trying to get a hold of the MRD calcs for the individual. No past service benefit is contemplated (so no AB @ 1/1/2005). Am I correct that under annual approach, MRD that would start @ 1/1/2006 would be 12/31/2005 AB reduced for early commencement and that adjustments for additional accruals would only have to be made annually?

What rules govern how a plan grants a participant service in a DB plan?

I know a plan can grant participants past service in some cases and even service with a predecessor employer, but what about grants of fictional service?

For example, assume a plan provides a benefit of $50 a month times years of service. When Jim retires, he has 10 years of service, but the plan sponsor wants Jim to get $1,000 a month from the plan, not $500 a month ($50 times 10). So the plan sponsor just decides, on a whim, to credit Jim with an extra 10 years of service in order to "gross up" his benefit. Is such a technique permissible? If so, is such a technique subject to any special nondiscrimination tests?

Are there any timing deadlines that apply when a plan is moving assets from one place to another? For example, Plan is moving all assets, lets say $1 million dollars, from insurance & annuity company A to mutual fund company B, does A have to comply within 30 or 60 or 90 days with the request? There is probably something in their contract that stipulates something, but is there anything prescribed in the regs in this regard?

Thanks

We have a couple of retirement plans that are sponsored by partnerships with complicated income allocation formulas. I was thinking that plan administration would be much easier if we could define compensation for purposes of the owners as an amount equal to the lesser of guaranteed payments or earned income. These are profitable partnerships so it would be rare that the guaranteed payments ever exceeded a partners earned income. This would greatly simplify plan administration as any profit sharing contribution would not change each time there was a slight adjustment to partnership income.

Do you see a definition of compensation like this as problematic? I worry about whether or not the IRS might argue that the profit sharing contribuiton is a deemed deferral becasue of the control a partner would have with regards to guaranteed payments. If the guaranteed payment amount was stipulated before the start of the plan year would it make a difference?

Thanks in advance for any advice you can offer.

Dean Huber

What if a taxpayer sells a security at a loss in his regular account (not an IRA account) but uses his tax-advantaged retirement account (IRA) to buy substantially identical securities within 30 days after the sale in his regular account, do the "wash sale" rules apply so that his capital loss would be limited?

My client has an account balance NQDCP. The plan provides that the value of accounts is determined by reference to various investment alternatives specified in the plan. One alternative is a mutual fund that is in bankruptcy. The independent fiduciary appointed to manage the fund while the bankruptcy is pending estimates that the value of the fund is approximately 90% of book value. Two participants, who have chosen this alternative have retired and are entitled to lump sum payments this year. The employer intends that a portion of the accounts representing post 2004 deferrals be grandfathered from the 409A requirements (not sure that really affects the answer to my question).

If the employer defers payment until it's rabbi trust receives payment from the bankruptcy estate, do I have a problem under 409A or prior law? I would like to argue that the provisions of the proposed regulations governing disputed payments would apply, at least by analogy. There is no guarantee that the mutual funds have any value at this point. I'm not at all comfortable that this is the type of dispute envisioned by the proposed regs.

What rules govern how a plan grants a participant service?

I know a plan can grant participants past service in some cases and even service with a predecessor employer, but what about grants of fictional service?

For example, assume a plan provides a benefit of $50 a month times years of service. When Jim retires, he has 10 years of service, but the plan sponsor wants Jim to get $1,000 a month from the plan, not $500 a month ($50 times 10). So the plan sponsor just decides, on a whim, to credit Jim with an extra 10 years of service in order to "gross up" his benefit. Is such a technique permissible? If so, is such a technique subject to any special nondiscrimination tests?