I'm working on a plan design for a nonqualified plan that will cover employees who will all be earning at least the 401(a)(17) limit. Can someone please point me to information on the current thinking on replacement ratios for highly paid employees?

I know there's a Georgia State University/AON study on replacement, but I don't think it specifically addresses the highly paid.

Thanks.

My employer hired me as a "full time employee" that works a minimum of 37.5 hrs per week. I have asked my employer to take 7% of my pay and put it towards my 401K. The problem is, they only take 7% out of 37.5 hours. If I work over 37.5 hours the contribution remains the same, so my 401k contribution ends up being less than requested, usually averaging 6.25-6.50%. Isn't 401K's based on Gross Pay, not hours worked? Is my employer allowed to contribute on the "assumption" of hrs worked and not the "actual" hrs worked? Haven't been able to find this answer anywhere, Are there any rules or laws that govern this ? We are new to the site, Thanks in advance for the replys!

Plan has aggregate funding method normal cost (minimum funding) of $40,000.

412 full funding limit for 90% RPA and ERISA are less than zero.

404 Unfunded RPA is $60,000.

Client wants to and plans on funding $40,000.

So if client pays $40,000 then the quesion is:

Does the FSA show a year-end balance of zero (no FFC) or is there a credit balance of $40,000 equal to $40,000 FFC + $40,000 contribution - $40,000 AFD?

I think I've read too many interpretations from too many sources and now need clarification. Regarding the reduction of the $5,000 threshold, I am under the impression that if it's reduced to $1,000 and a missing participant has a vested interest of <$1,000, the trustee does not have to automatically roll it over into an IRA for the participant. In other words, nothing changes in regards to distributions of <$1,000.

If this is true, why would a plan consider decreasing the threshold below $1,000 or even bring it down to $0? Eliminating it completely would force terminated participants with vested interests of <$200 to fill out election forms where they previously were not needed. All help is greatly appreciated.

Mulitemployer plans seeking net experience loss relief under 412(e) are subject to restrictions on benefit increases during the deferral period. Let's say a plan that seeks relief under 412(e) spins off certain participants who are then merged into another plan. Are these participants still subject to restictions on benefit increases under this new plan?

My question is in regards to the new attachment to the Schedule I/H. In my research I do not seem to find specific instructions for the for the 5 boxes on the form. Can anybody provide details for the 5 sections or a link with an explanation.

Is this form required for a Schedule I if there are late deposits? Relius does not print the form or say there is an error if this form is not completed.

Thanks for your help.

We acquired a company a couple years ago, kept their DB Plan intact and converted it to a cash balance plan. We already have a DB Plan that was converted to a cash balance plan. We haven't merged the 2 plans because we promised we wouldn't for a number of years.

We are trying to design the benefits for transfers between the 2 companies/plans. We don't have the systems capability to pay the benefits from each plan in a different form. So, if you elect an SLA from one plan, you have to select an SLA from the other plan. No one is loosing any options - in fact, they are getting more options. It's just that we can't pay, for instance, a certain & life from one and an SLA from the other. Only transfers between the companies/plans are affected.

There doesn't seem to be anything on point about this. Just wondering if anyone else has dealt with this or has any thoughts on it.

Can a one-man DB plan use the VFC program to receive an exemption from excise tax on a prohibited transaction of contributing stock rather than cash to the DB plan?

I am attempting to add another employee, but am being told by management that my income per FTE does not justify another employee. Management, a non-TPA business, knows little about the TPA business, and after 26 years in the business I know what my needs are. However, hard data would help.

Is information available that would give me an idea what the average income per FTE is in the TPA business, and where would I find it?

If anyone wants to offer this information on their own firm, it would be appreciated. I don't need income or number of FTE's, just gross income per FTE.

Thanks.

I was contacted by a co-trustee who can not find the document of her husband's plan. American funds will not allow her to gain access to the funds because they do not have her listed as a trustee. They want to see the doc. She is not a client (not yet)... What are her options?

Plan was established in 1998 and he was the only participant.... FYI

Prior record keeper did not provide hardship amounts available for participants. The plan has gone through several service providers in the past. The plan sponsor is also unable to provide this information. Is there any way to process a hardship distribution without the exact amounts?

Does an employer have to offer FSA under their COBRA coverage?

I'm trying to determine if a health plan is self-funded by looking at the 5500 information. The benefits provided are noted at Line 8b as 4A (health), 4B (life) and 4H (disability). Line 9a notes the funding arrangement and benefit arrangement (9b) as (1) 'X' Insurance and (4) 'X' General assets of the sponsor. Is the response in Line 9(a) and 9(b) generally determinative as to whether a plan is "self-funded" or not. Any help would be greatly appreciated. Thanks......

Can someone give me the regulation or code that restricts distributions until separation from service or age 59 1/2 for defined contribution plans like a money purchase plan?

I thought I knew this until someone asked me directly...

If you count the receivables in the BOY amount to determine the 20% threshhold, then (usually) you'll get a higher amount and thus a higher limit, so you may have less assets to report. But it seems sort of disingenuous to inflate the number that way, and so maybe that calculation is meant to be done on the actual cash assets at BOY.

I can't find anything definitive to support it either way, so any direction is appreciated!

I am currently researching Paid Time Off Banks and would like to come up with a cost analysis that shows the difference between the current cost to my company when employees use vacation, sick and personal time versus what our costs would be under a Paid Time Off Bank.

Has anyone handled a similar project, and if so, what resources did you use and how did you proceed with the costs analysis. Did you calculate the greatest exposure under your existing policy (i.e., did you assume that all employees used all vacation, sick and personal and then total the costs) and then did you do a similar calculation for the total number of days alloted under the Paid Time Off Bank?

If for whatever reason an employer wants to no longer allow elective deferrals in their Plan, does a plan amendment have to be signed before those deferrals are no longer taken from an employee's compensation? Or would a notice to the employees telling them deferrals will no longer be accepted suffice, with a plan amendment signed by the end of the plan year.

We have a 2 person plan that terminated. The assets were distributed completely, the DB account was closed, and we filed the final 5500-EZ. Residual interest of about $750 was credited to the plan's investments, so the investment house re-opened the account.

To get the money out, does this really count as a distribution? or is it just an interest credit?

Do I have to revise the final 5500?

Thanks!

Dennis

We believe that we are overthinking this:

5 individuals, Including father and his 2 adult children (this family owns 81%), and 2 unrelated individuals (who, together, own 19%) own 100% of corp. X.

Corp X owns 59% of Corp. Y.

2 individuals unrelated or connected to Corp. X or any of its owners own the remaining 41% in Corp. Y

Is there a controlled group existing here?

Would it make any difference if all the owners of Corp X were parent and children?

Thank you. We believe there is a parent/subsidiary relationship here, but the facts presented to us have changed so many times over the past few days, our thinking is getting muddled and we are being to quarrel amongst ourselves.

Are elective deferrals made as a result of automatic enrollment to be treated strictly as pre-tax contributions or, in 2006, will a participant be allowed to have an option to treat them as "designated Roth contributions."

On one hand, the Code says that a qualified Roth contribution program means a program whereby an employee may elect to make designated Roth contributions, implying that the employee makes an actual election to have such contributions made; on the other hand, a designated Roth contribution means "any elective deferral" which could be pretax but which the employee designates as not being excludable.

I recogniize that a participant receiving an automatic enrollment might be the type not to get too involved in the deferral amount so s/he would not likely go to any effort to designate the type of ED (Roth or not), but there may be those who are donkeys in the path who let the employer make the election for them but who want the benefits of a Roth contribution.

I'm hoping for an obvious answer that I've just been missing. Thanks for any assistance!