Client failed to withhold deferrals from an ee's pay. Will now be making up the missing deferrals following one of the EPCRS self-correction methods. The plan allows forfeitures to be used to reduce employer contributions and QNECs are listed as Employer Contributions. So, the QNEC contribution will come from the forfeiture account. The question is: can monies in the forfeiture account also be used to cover the lost investment earnings that need to be credited to the deferrals? Or would this be considered a prohibited transaction?

thinking about a owner plus spouse db plan terminated but never distributed and never amended, etc. how to fix? insignificant operational failure in failing to payout, so self-correction? plan document failure must go vcp ... and what about delinquent 5500s? any help will be appreciated.

Assume a plan starts in 1971. In 1991 it adds a suspension of benefits provision. Does 2005-23 require that the suspension of benefit provision not apply to accruals before 1991, or does 2005-23 just state that once set forth, the suspension of benefits provision can only be modified on a prospective basis?

Company X is a Fortune 100 company maintaining both a defined benefit plan and a 401(k) plan for the benefit of its employees. A few years ago, Company X acquired Company Y, which had similar plans for its employees and merged Company Y's defined benefit plan into Company X's defined benefit plan and merged Company Y's 401(k) plan into Company X's 401(k) plan. Company Y's defined benefit plan allowed employees to make voluntary after-tax contributions to it, but this feature was frozen a number of years before Company X acquired Company Y. Company X wants to eliminate the voluntary after-tax contribution feature.

Among the options being considered are the following: (1) spinoff the voluntary employee contribution feature of the Company Y defined benefit plan into the Company X 401(k) plan (which also allows after-tax contributions); (2) terninate the voluntary employee contribution feature and allow affected employees to make distributions from their voluntary employee contribution accounts; or (3) purchase an annuity contract to hold the voluntary employee contribution feature outside of Company X's defined benefit plan.

Questions:

If Option (1) is selected:

(a) would the Company X 401(k) plan have to track the voluntar contribution feature to make it comply with the QJSA/QPSA requirements under the tax law?

(b) since the right to make ongoing contributions to the voluntary employee contribution feature was frozen several years ago, would Company X have to issue a notice to participants under Code Section 4980F?

© are there any other issues to be considered before implementing the spinoff?

If Option 2 is selected:

(a) Would the termination of this feature have any impact upon the remainder of the Company X defined benefit plan from a qualification, ERISA or PBGC perspective?

(b) If a participant's account balance under the voluntary employee contribution feature exceeds $5,000, what can Company X do to get it out of the plan?

If Option 3 is selected:

(a) Are the Joint Guidlines prescribed by the IRS, DOL and PBGC in the early 1980s still effective? If so, would this require that Company X fully vest all Company X defined benefit plan participants in their accrued benefits?

(b) Are there any other issues from an IRS, DOL or PBGC perspective that Company X should be aware of?

A participant established a Single Life w/ 10 year guarantee annuity from a 403(b) plan. The participant died and the surviving spouse is the beneficiary. They have the option of receiving the remainder of payments in the guarantee period as the participant was OR the actuarial equvilant as a single sum. If the surviving spouse receives it as a single sum, is this an eligible rollover distribution?

I have a ROTH account with a full service brokerage firm. Does it cost me anything to sell and buy stocks or mutual funds on a regular basis. Do i pay my broker to make these transactions in my account. Do i pay any commissions when buying stocks in this account or selling. Thanks for the clear up.

Do contributions to a pension plan have to be in cash? Can they be in securities? For example, if the employer is a sole proprietor can he contribute securites held in his stock portofolio without first having to redeem them for cash?

Sad that my 1,000th post should be something this boring. To all you BoSox fans, shouldn't I get a couple of Green Monster seats for this post?

Situation is this: participant terminated employment, and was properly reported on a SSA. Two years later, participant is rehired. Do you:

A. Report on a SSA with a code B, and change benefit to zero?

B. Report on a SSA with a code D?

C. Something altogether different?

I lean toward D, but I'm not really certain. Any opinions? Thanks!

Schedule C requires us to list "service providers", but the form's instructions don't define the term.

I believe that Schedule C is for reporting services to the plan, not to the participants. For example, a plan that offers employee legal service benefits will report its own attorney's fees, but not the expense of providing legal service benefits to plan participants.

And, how broad is the term "service"? Do you include the janitorial company that cleans the plan's office suite every night? What about the caterer who serves food at enrollment fairs? Is Schedule C limited to reporting only "professional" services?

Company with SIMPLE paid one-time bonus to EE's a few months back. Apparently the executive director deferred a good chunk into his SIMPLE without executing a deferral agreement. Also the rank & file were not informed of their ability to defer any of their bonus. A few questions:

1. Is it permissable to execute a separate SRA to deal with deferral of a one-time bonus?

2. If so wouldn't it have to be done in conjunction with the plan's election periods (in this case calendar quarter)?

3. If done outside the allowable election period does the deferral need to be returned to ER & run back thru payroll?

4. Since the rank & file weren't informed of ability to defer does that fact invalidate the ED's deferral? Or the fact that no SRA was executed?

Any assistance is appreciated. Thank you.

I'm testing a 7/1/2003-6/30/2004 (large) plan and trying to determine who are HCEs. Under the plan's terms, service is measured on a plan year basis but compensation is defined as calendar compensation.

For 7/1/2003-6/30/2004. I seem to be able to use calendar 2002 pay to determine the HCE threshhold by using the calendar year data election of IRS Notice 97-45. There does not seem to be any documentation or amendment requirement to use this, except for consistency among plans and that the election, "once made, applies for all subsequent determination years unless changed by the employer."

Questions:

(1) Am I right that I would use calendar 2002, not 2003?

(2) This is still an option, right?

(3) How does an employer make such an election, i.e. is there any documentation requirement that I have not found and am unaware of?

Thanks for any help.

I have one of these books from 1998, and I was talking to my current employer about this book yesterday. she emailed me today, asking "where can we order these?" and I cannot find this book anywhere. The edition I have was published in 1997 by Investors Press, Inc.

Does anyone know where I can get some of these books? There are some clients who really need to have these! When I worked at BISYS Plan Services, we used to give them out to clients (they also had the BISYS logo on them).

when an exec compensation package includes "welfare benefits" in its definition, what welfare benefits are being referred to (in general)? Where would I find this information?

Plan is safe harbor match with immediate entry for 401(k) and 1 year wait for safe harbor match. Participant is hired in March, 2005. He earns $100,000 in 2005. For 2005, he is an otherwise excludable employee so he does not have to be included in an ADP test. In March 2006 he becomes eligible for the safe harbor match. For the 2006 plan year, how do you test his deferrals? He satisfies the safe harbor from Match - December, but does not satisfy it from January - February. He is also no longer an otherwise excludable employee, since he does have 1 year of service.

I have a DB plan which is currently just barely top heavy ( i.e 62%) - it wasn't TH last year but was the year before - under the current plan formula, non-keys will get at most 12% of final average pay after 30 years of service - a far cry from the 20% TH minimum required after only 10 years of service.

A Question/Poll for Other Practitioners : For funding would you assume continued top heavy status and fund for 20% of pay for those non-keys expected to have at least 10 years of service at NRD ?

PS: This is one of those "Doctor Plans" for those practitioners who go back a few years and is general tested each year - it passes (a)(4) due to the large build-up in a sister DC for the non-keys/non-hces --------- under this DB plan the Docs get 60% of FAE after 30 years.

I have a new DC plan in 2004. At year end there were over 2,000 participants. Although there were participants techinically eligible on 1/1/2004, there were no assets and no one had an account balance. There is an end of year requirement for an allocation. I would think that there we no participants on 1/1/2004 and certainly not on 12/31/2003

I don't find guidance in the 5500 instructions regarding new large plans. What I do read is that the large/small distriction is based on participants at the beginning of the year.

I would think that this is a small plan for the 2004 5500.

The major question is whether an audit is required. I would think NO.

Comments?

What documentation is necessary for a loan that is to be used for the purchase of a principal residence w/a repayment period of 15 years? Would a signed statement from the applicant be sufficient?

Thanks!

When is the deadline for making matching contributions? Thanks

My husband was divorced 28 years ago and the domestic relations order stated that his former wife would receive survivor benefits. However, a QDRO was never drafted or filed with the court. My husband and I married five years ago. My husband is vested and will retire in approximately five years. Do I have any rights to the survivorship benefits? (The pension is a defined benefit.) Also, is there a statute of limitations for filing a QDRO?

Controlled group entity maintains a "mega-wrap" health plan document that covers group health, dental, life insurance, and short and long term disability.

Not all participants are enrolled in each component of the mega-wrap plan. Thus, 500 are enrolled in the life insurance component, 325 in group health, 400 in dental, etc.

What is the total participant count for the beginning and end of the plan year, for Form 5500 purposes?

Do we use the largest number (life insurance) and file an attachment to the Form 5500 showing how many participants are covered under each component of the plan?