I have a client with a PS Plan with a 5/31 year end. Currently the plan's eligibility is Age 21 and six months of service. Entry date is on 6/1 after meeting eligibility.

Employee A, over age 21, was employeed 8/23/04 and should enter the plan on 6/1/05.

Client is wanting to amend his plan's eligibility to Age 21 and One Year of Service with the amendment effective 6/1/04. Will this keep Employee A from entering the plan on 6/1/05? Or since she has not entered the plan yet, will she fall under the new eligibility rules?

Thanks.

In a situation where there are 2 employer plans, does a prohibited transaction result if one plan buys an asset from the other plan? I cannot find anything on point in IRC section 4975 or ERISA 406 or 408.

I have a 401(k) plan that (during 2004) has adopted a resolution to terminate. I have a number of employees who were eligible for the plan (prior to the resolution) and made no 401(k) deferrals and have no account balances. They are still actively employed. The question is: Should they be included in the participant count in question number 7 on the Form 5500 or can they be considered as having received a distribution (deemed distribution) and removed from the counts? I know that they should be included in the count for question 6.

Any referral or cite would be a great help.

If an independent contractor is participating in the state's 457(b) plan can the independent contractor also fund his own SEP plan?

We have a company that submitted their own 1099R for a participants loan default for 2003. They issued it for the wrong amount (too much by about $1,000).

Do we just need to submit a corrected 2003 1099R for the correct amount or is there more needed?

Company X maintains a cafeteria plan for its employees. Company X is proposing a design change in which it promises to make a $300 contribution to the medical FSA it offers if the employee elects a specified medical insurance option, whether or not the employee also elects to make contributions to its medical FSA. Is there any legal prohibition against an employer providing one type of benefit contingent upon an employee's election of a specified benefit?

I saw a while ago a list of required provisions for EGTRRA, which I believe was provided by the IRS in order to assist practitioners with amending plans. Anyone know where I can get this? I also saw a similar one for GUST.

Anyone having experience as to how to handle separation/distribution issues involving a non-qualified plan and a qualified domestic relations order? Looking specifically for possible pitfalls.

Situation is a deferred bonus program on a revolving 3-year cliff vesting schedule. First year's bonus to the executive is now vested, however, with "haircut" provisions appearing to be a thing of the past, should the non-qualified account held by a rabbi trust be somehow segregated? Comments of stories or experiences sought.

The guidance regarding the new determination letter program is confusing to me. Assuming I am an employer that has adopted a non-standardized prototype plan, do I have until whenever the IRS finishes reviewing the sponsor's document to submit a determination letter application (thought to be 2008-2009)? What about the 401(b) remedial amendment period?

Curious if anyone has heard whether employees with covered dp's can drop dp mid year for any reason or does employee & dp need to have a Family Status Change to do so.

We have a profit sharing and mp plan that terminated a couple of years ago and all assets were distributed. Just discovered some insurance company stock in the name of the plans as a result of demutualization. The accountant feels that we should file amended ( and late) 5500s back two years and a final showing the payments made once the 5 affected participants are paid out. I would be tempted to execute the payments and call it a day. Note: the final plan year just went through a succesful IRS audit. Any ideas

Would appreciate any guidance on the following scenario:

Indiviually designed 401(k) plan amended and restated for GUST. Discusses desired EGTRRA good faith amendments it wishes to make with counsel in 2001, prepares revised SPD and communications to participants indicating EGTRRA changes have been made and will go into effect in 2002. However, no good faith EGTRRA amendments are actually executed--no board resolutions, company actions, etc, other than file references that they plan to make certain changes. Plan has been administered consistent with the desired EGTRRA changes since 2002. Problem is not discovered until plan tries to amend and restate on a prototype plan document this year. Questions are:

1. Does this plan currently qualify for the 50% reduction in VCP compliance fees under Section 12.03 of Rev. Proc 2003-44 for nonamenders that submit under VCP within a one-year period following expiration of the plan's remedial amendment period. I know the EGTRRA remedial amendment period has not closed but I have seen some guidance which suggest that the extended EGTRRA remedial amendment period only applies to plans that timely adopted good faith EGTRRA amendments. Under such an interpretation, it seems the 50% reduction might arguably only apply if the VCP submission was made prior to December 31, 2003--1 year following the Plan's original deadline for getting good faith amendments in place. Such a definition of the remedial amendment period for these purposes seems circular to me. Anybody had experience with this?

2. As noted above, the Plan intends to shift over to a prototype. Will the IRS allow the Plan to amend and restate on the prototype document and accept the prototype document as satisfying the EGTRRA amendment requirement for VCP purposes or does the IRS require that the current individually designed plan adopt good-faith EGTRRA amendments, go through VCP, and then switch over to the prototype? Seems a waste to require separate amendment but prototype sponsor is nervous about proceeding with the restatement before the existing plan is fixed.

Thanks in advance for your assistance.

I have heard two different answers to this question. 1099R Instructions read as follows: Code 2 - Early distribution, exception applies. "A distribution from a qualified retirement plan after separation from service where the taxpayer has reached age 55"

I have an employee whose position was terminated on 2-28-05, he has not yet made a distribution from the Plan, but is going to cash out. He will turn 55 on 5-2-05.

Does the exception apply only if the employee is 55 at the date of termination or does it apply when the distribution actually occurs? I have had two people read it completely different.

Thanks.

Please furnish me with the Code Section that makes these payments free of federal income tax.

Why would pre 87 after tax and post 86 after tax money be treated differntly - if at all - for tax purposes?

With regard to Non-Deductible Contributions to a DB plan, in going through the ERISA Outline Book, it appears that you can disregard contributions that are not in excess of the old ERISA full funding limit for purposes of calculating the excise tax due on the non-deductible, and then the non-deductible gets carried forward into the following plan year. this references IRC 4972©(7).

Is anyone familiar with this, and if so, did I understand it properly?

Thanks!

Dennis

Simple PSP termination going in for a DL letter following Co. liquidation.

Former employees have requested an immediate distribution. Plan Sponsor wants to hold-back a percentage of balance to the credit until IRS review termination status and issues DL and final trust accounting completed.

What percentage hold-back do you think is reasonable/conventional?

Thanks.

Instructions are to give spouse IRA under IRC 1040, which talks about pecuniary bequest.

Does this mean that the spouse gets the assets now? Or after the IRA owner dies?

This is different from a non-taxable transfer due to divorce -right?

Does anyone have old C3 exams? ASPPA no longer sells them.

Does anyone know of a vendor that has a 125 document with HSA?