Has anyone heard of or used Fort William online document services? They offer prototype and volume submitter documents at what seem to be impossibly low prices. Their website doesn't indicate who is responsible for their product. Buyer Beware of course, but has anyone worked with them before?

These should be simple for the pros out there but a couple of questions on 5500-EZ for 2004 for a one-person sole proprietor 401k PSP...

LINE 10b: The instructions say to enter the contributions owed to the plan at the end of the plan year - if the plan year ended 12/31/04 and a contribution of $10,000 was put in let's say March 1, 2005, is it correct that the $10,000 is considered "owed" to the plan and should be included on this line 10b?

LINE 11b: This line is supposed to show "Total Plan Assets at the End of the Year". Assuming that the plan year ended 12/31/04 but just like above a contribution of $10,000 will happen 3/01/05, should Line 11b include the 12/31/04 investment account balance plus the $10,000 March '05 contribution?

The plan doesn't have loans and doesn't have distibutions at this time. Any other suggestions for the 5500-EZ would be very welcome. Thank you.

ER has a Cross Tested plan with about 10 EEs. Sells the clinic with the EEs and becomes a Public Speaker. After a time his old Admin Assist. comes to work with him again.

So:

2004 AA is rehired 10/15/04 and works only 245 hrs. Plan has 1,000 hrs for accrual. Plan is TH so she gets the TH min. X-tested so she gets to Gateway, 5%.

But she is older than him. Is she in the 401(a)(4) testing? (I think so.) So to get the guy a 20% allocation she has to get a 20% allocation. But the Gateway amendment only allow bumping up the TH to the Gateway.

Am I missing something? I think she has to get a regular accrual but under what authority? Do I need a corrective amendment?

Thanks

We have a prospect who sponsors a safe harbor 401(K) with an enhanced match.

The plan is on a fiscal year ending 10/31/05. Effective 11/1/05, the plan will be amended to a SHNE 3% because the plan is now top heavy; in addition, the client wants the flexibility of a profit sharing contribution, should he decide to make one.

The client was told by his insurance company representatives(who said they thoroughly checked with their Agent Support Team in their Home Office) that he could add a profit sharing component and have the vesting for the new profit sharing component start from the effecitve date of this amendment.

Then the fellow from the Home Office told the Rep that TPAs generally do not like to do this because it requires more work in that the contribution will have to be tracked separately, so TPAs tell their clients that this can not be done becaue they don't want to do the extra work.

I'm about to tell the prospect I have a problem with it because I do not beleive it is legal to do this, not because I do not want to.

Has anyone heard of this approach before?

Steve

Say a person has an income amount for a certaiin year that is under the limit at which you start owing income taxes. I think it is presently $7,000 per year for a single person. Assume you did not have any tax withheld, then you would not be required to file a tax return. (If I am mistaken about this, please advise.)

So assume that someone in that situation made under that amount, and put some of it in a Roth IRA because it was still earned money. Is he going to run into any problems with the IRS for not filing the tax return? Does the IRS require filing a tax return or any other kind of documentation to verify that he actually did make the amount of money he put into the Roth IRA account?

Thanks for any info.

I'm not sure if this is the right forum to be posting, but I figured I try anyway...I'm taking the 2nd SOA exam, exam FM in November. I'm really behind and I need some help in finding out where to get good study books/guides.

Have a C Corp on a fiscal year that will elect S Corp status and become calendar year filer. I'd like to match Plan Year to Corporate year (calendar).

Plan in place is a 3% SHNEC. Do I lose safe harbor status because of a short plan year? Don't think it will be an issue because of good participation, but you can never take anything for granted in this biz.

Participant wants to transfer a limited partnership interest to his personal account to satisfy the age 70 1/2 required minimum distribution.

I fear this is a PT, and that the asset will be valued without a true market value.

How do I advise this participant?

Participant "A" and "B" have the same last name. "A" wanted to raise his deferral percentage from 2% to 5% 7/1/04 to take full advantage of the $1 for $1 on first 5% match. Apparently he never noticed that his deduction changed on his paycheck. The change was inadvertantly applied to "B" whose deferral % was lowered from 6% to 5%. He also never mentioned the error to HR.

I haven't found any examples of this type of situation or suggested corrections. Has anyone run into this situation and how to fix it? It doesn't appear to be a qualification problem from what we see.

A local 125 administrator is allowing members who choose unreimbursed medical to not include a certain dollar amount. Rather, the select to participate in the URM FSA and submit claims as they are incurred. This eliminates the at risk componenet.

Client wants to set up a new 401(k) SH Plan. Do I have to wait to make it effective until 1/1/06 since its October 2005 already?? Doesn't it have to be atleast 3 mths to be considered a "short plan year". Also taking into consideration it being a SH Plan, there wouldn't be enough notice given to the employees for 2005 to be the effective plan year.....right??

Are there another limitation for the first year?

I have a client who has a pye of 9/30 and they just gave me their census. The have a new comp plan and all looks good EXCEPT all of the employees who are younger than their son have terminated.

First question is: is it too late to change the groupings so that I can provide the son with a zero.

Second question is dependant upon the first answer being yes, it's too late: Since the son hasn't started working for today...it's possible to actually terminate him. I'm sure the IRS frowns on that, but what precludes us from doing it?

I hate playing games with this stuff, but I suppose you have to get creative when a younger child is involved. better to have multiple groupings to begin with, but that wasn't the case and wasn't necessary for last 4 years.

Can anyone point me to a sample of a Governmental Excess Benefit Plan? I can't find one anywhere and don't know where to start if I'm forced to draft one from scratch. My usual source, RIA Checkpoint, doesn't have one. Any help would be appreciated. Thanks.

Can an employer amend his plan to say that the "minimum deferral percentage of pay is 5%"???

right now no limits

(dont ask the logic.........)

I recently attended a training class where the instructor pointed out that the recently released IRS Regs on IRA annuities state that each individual annuity contract must satisfy an MRD. This means that you can no longer take an MRD from your regular investment account to cover an IRA Annuity. I have not seen any articles or information that covers this point. I also cannot find the Reg Section referenced.

If anyone has info on this I would appreciate your sharing it.

Thanks!

Laura

Distributions from an HSA used exclusively to pay for or reimburse qualified medical expenses of the account owner or the account owner's spouse or dependents are excludable from gross income. Can a distribution from an HSA used to reimburse a third-party who directly paid the health care provider for qualified medical expenses qualify for this tax-favored treatment? In other words, if an account owner's former spouse pays for the dependent child's doctor visit, can the account owner take a tax-free distribution from his HSA in order to reimburse the former spouse for the expense?

I'm not an insurance fan in DB plans per se, but is there any cite that prevents us from deducting the full premium on say a whole life policy (split funding) if the policy is a paid up policy in say 5 years, but the assumed future working lifetime of the participant is say 20 years ? Would this be an unreasonable funding method if this accelerated full premium was deducted ? There's probably a Revenue Ruling or Rev. Proc. on this but not sure where. Both opinions and cites welcome.

Hi everyone,

I'm a financial planning master's student with a ESOP question.

I understand the tax advantages to the owner and the company of setting up an ESOP. What I'm wondering is: How does the owner benefit financially each year when the company makes its contribution to the ESOP?

A bit more detail: I'm working on a final project for an employee benefits class. Our hypothetical company wants to establish a qualified retirement plan and contribute $190,000 this year. The owner has a retirement savings need of $560,000 in 16 years, in addition to his other resources. I'm supposed to recommend a qualified retirement plan and explain how it will help the owner meet his retirement savings need.

So with a straight profit sharing plan, he would get $X (his portion of the $190,000) a year, and I would need to calculate whether that $X a year would grow into $560,000 in 16 years.

But with an ESOP, is he actually getting anything each year when the company contributes to the plan?

Thanks--I can post more details if necessary.

Leonard Barry

Madison, WI

I ran the ADP test for my plan, excluding the statutorily excludables. Plan fails the ADP test for 2004. Client decides they want to correct by allocating a QNEC. The QNEC is to be allocated to NHCEs who worked 1000+ hours and were active on the last day of the plan year. As part of the correction report, our system provides the allocation figure. I had the system allocate the QNEC and it provides it to all NHCEs who are eligible for the QNEC, regardless of their status as a non-excludable or excludable. My question is: Isn’t the QNEC supposed to be allocated to ONLY those participants who are non-excludables and in the failed ADP test? Should the excludables receive the QNEC allocation? The plan document does not specify this.

I probably haven't tried hard enough to get out of the 7.5% gateway on DB/DC permissively aggregated plans. It seems the "primarily DB in character" exception to the 7.5% gateway usually defeats what I'm trying to do (keep most NHCEs out of the DB plan) and I've tended to just think of "broadly available" perhaps overly simplisticly as simply two plans standing on their own for discrimination testing as normal (i.e., no special relationship between them). However, I noticed the blurb in the (a)(4) regs under the "broadly available" option that states it's applied "assuming that the Average Benefit Percentage test of 1.410(b)-5 were satisfied". Is this of much value from a practical standpoint ? I guess this eases the standard somewhat so it's not just the full normal coverage and discrimination applied to both plans separately as there is a built in ABP "pass". Anyone get any bank-for-the-buck using this approach ? Any example ? (just trying to see what situations it's helpful for).