A SEP adoption agreement was signed in 2003. The adoption agreement was a "check the box" type. It was completed by the plan's broker and given by broker to sponsor (employer) to sign.

The employer did not read the adoption agreement, he simply signed it.

The agreement's service eligibility box was marked "0 years", but the employer was told by broker that an employee would have to work there 3 years before he/she could become eligible.

The sponsor's accountant has recently read the 2003 adoption agreement, and informed the sponsor that all past and current employees met the eligibility requirement ( 0 years) of the agreement .... and should have entered the plan in 2003 and 2004.

The employer says, he did not read the adoption agreement he signed. He relied on the broker when broker said 3 years service for eligibility.

According to past tax returns, the employer (as employee) entered the plan in 2003. he has been an employee since 1998.

My question:

Can the "0 years" stated on the adoption agreement now be deemed a PLAN DOCUMENT FAILURE and corrected (changed to 3 years) rectroactively under the the Employee Plans Compliance System ?

Does anyone know if the Florida Documentary Stamp Tax applies to ERISA qualified plans? I have read Florida's statute on the subject and don't see that it was meant to include participant loans form 401(k) plans. However, our recordkeeper says it is mandatory per Florida's statute 201.08.

I don't see it that way.

Thanks.

I have a 401(k) plan from my previous employer. Although I cannot make contributions I am allowed to have the account with them because I meet minimum eligibility requirements. My question is how much will I be taxed if I take a disbursement and use the money for the purchase of a home? Is it 20% + 10% penalty fee? Any way around it.

I have a similar question for my 2 rollover IRA accounts.

We have a client that we are helping withdraw a nondeductible contribution from her DB Plan. Under Rev Proc 90-49, it says that we must attach to the Schedule B an actuarial certification, copy of the plan language or corporate resolutions condintioning the contribution on deductibility, and a certification from the employer that the contributions were not deducted on their tax return.

Does anyone know if there is a standard format for the last item? Is it just a generic statement saying something to the effect that "I hereby certify that this amount has not been deducted on my taxes"?? Or are they looking for something specific?

Thanks!

Dennis

Amending a plan to eliminate a division will affect employees already participanting. I know the right to continue to participate is not a protected benefit, but the accrued benefits are protected. The plan sponsor wants these participants to take distributions. Is there a distributable event? As long as these participants are employed they will continue to vest in their accrued benefits even though their participation is suspended.

Does the fact that the plan sponsor has changed affect their status?

As I read the regs on automatic approval for a change in funding method, it is OK to use Level Dollar Individual Aggregate method for a plan with a salary related benefit.

Does anyone know of any guidance from the IRS on whether it is OK to use a salary scale when using the Level Dollar Individual Aggregate funding method?

Has anyone had occasion to consider the impact of the new Circular 230 provisions on their "regular" benefits practice? In other words, if you are not engaged in rendering opinions on tax shelters, how will the new rules affect you?

We have a 403(b) with AXA-Equitable and, frankly, we are losing money. :angry:

How this happens is that they advise us what to invest a percentage of our 403(b) into and that percentage is supposed to grow at around 3%. In almost a year of investing we have accumulated a WHOPPING $2.93! That is all well and good but at the end of the contract year we pay a service fee of $35. You do the math. No wonder they've been in business for nearly 200 hundred years.

That said, can we transfer our 403(b) to another invesment firm, w/o penalty? Our employer has a list of several companies other than AXA-Equitable and we'd like to switch if the penalty is not too great.

I am new to Welfare benefit plan administration.

Our firm set up a life insurance only WBP using a whole life policy with cash value build up, with deductions in accordance with the limitations of 419(e).

Regarding the Schedule A s/ info be entered on p. 3 much like an investment or s/ info be entered on p.4 for WBP info.

If it s/b on p.4 what info s/b provided or how s it be presented?

Since it seems much like an insurance investment with an increase in value for gains and decreases for expenses it appears like it s/b entered on p.3 where the beginning and end of year values are reconciled.

Any input would be appreciated.

Thanks.

Gary

A partner of an LLC receives a W-2. His tax attorney just told him that he can not defer into the plan until the LLC is profitable. I have never heard this before.

Anybody know if this is true?

This is an unusual situation and I would appreciate feedback.

A company has a medical reimbursement plan that limits reimbursements to medical expenses for treatment of on-the-job injuries that are not reimbursable by workers compensation. Without going into specifics, this is an unusual company and the injuries are regularly incurred and are not the result of accidents - for example, ankle injuries for a basketball player. If this were a medical plan for a basketball team, the players would be reimbursed for ankle braces, the orthopaedist, and massage therapy.

The question is what to do when the employee quits. I don't think this should be subject to COBRA because it is limited to on-the-job injuries, and non-employees wouldn't have on-the-job injuries.

Any guidance out there on this issue?

Locust

I am single, reside in Calif, and for the year 2004 had an adjustable income of zero as I am back in school. At the end of Dec. 2004 I called and made a transfer (9,000) from my IRA to my Roth in order to take advantage of my zero income and therefore avoid having to pay taxes on the money transfered between these accounts.

Then on December 31, 2004 I made another transfer ($4,000) invovlving the same accounts from my IRA to my Roth IRA and thought I had requested the second transfer to occurre in the year 2005.

On April 15th,2005 I realized that both transfers actually were completed for the year 2004. This has created a taxable situation and I will owe income tax on the $4,000 transfer.

My question : Is there any way the IRS will allow me to reverse the transfer I made in error ? Or is there any other options or suggestions that may help in avoiding the taxes the will be incurred on the extra transfer?

Thank you.

ADDITIONAL INFO:

Account History. Originally was an Incentive Thrift Account with my employer opened approx 13yrs ago. I ended employment with the company in 2000. The Thrift account ( approx 36,000 )was rolled over into a Traditional IRA (30,000) and a Roth IRA (6,000) in 2002. In 2003 there was no activity in either account.

For years 2002 to 2004 I have been a student with zero reportable income.

If any other info. is needed please let me know . thanks !

We are reviewing and trying to streamline our FMLA process. There are some disagreements amongst the team regarding some of the info contained within the regs and what level of flexibility the employer has.

We currently offer the pay-as-you-go and catch-up payment options. Can we offer just one?

We currently allow the employee to decide which of our benefit they want to continue. Can we eliminate this as a choice and state that they all must continue?

Are long term care insurance premiums reimbursable from a health FSA?

Seems pretty straightforward but just wanted to check with all of you... Individual A owns 100% of the shares of Corp T. Corp T owns 100% of the shares of Corps. U, V, W, X, Y and Z. Looks to be a parent-subsidiary controled group under 1563(a)(1). However, wouldn't recent 5500's for each corp's qualifed plan (401(k)'s) show the same number of active participants, etc..... if they are properly being reported as a controlled group???? Thanks for the help.

Good morning,

Could anyone offer me some feedback into hiring practices at your fim.

I have only worked for 2 firms, and both have been small companies where interviewing and hiring happens within a matter of weeks, and decisions are made without having to go through much red tape. I am not familiar with having to work with departments, budgets, multiple locations, red tape, etc.

I have been interviewing for an out of state position for about 4 months. I have had some offers, turned some down, and narrowed my choice to three employers that I wanted to work for.

Unfortunately, I had offers from two of them, but it is the third one is making my head spin. Also unfortunately, it is the company I want to work for the most. The company has a great reputation in the industry and the people I have met at the firm are so incredibly smart and talented, I am so anxious to work with them.

I have done phone interviews with them, and traveled down to their office twice. I spent two full days in their office and met with the heads of three departments. They keep saying what a great candidate I am and that they would love to have me on the team. However, I havent yet seen an offer. There have been explanations why, including budgets, people being away on business, having to talk to other locations, etc. Two weeks ago, I visited their office again to meet with the department heads. I fully expected to leave the office with an offer. However, I got a "we'll be in touch." The weird thing is, they keep saying how great I am and how all the people in the office really want me on board.

In the meantime, the offers from the other two firms have come and gone. I had a deadline to accept them, and I turned them down, because of this firm that I really, really want to work for.

Is this normal? Could budgetary stuff really make an offer take a few months to go through? I cant think of a single reason that they would string me along, other than that they really do have budgets to work on.

Now I have another potential offer coming in. Its a good firm and a good offer.

At what point do I just walk away from something I really want?

A newbie question

If i roll a 401k into a traditional ira i understand there is no tax due.

What would be the tax implications of rolling into a roth?

thanks, dave

Does it make sense to borrow from a 401k to pay off credit card debt?

First, so that I don't have to "comb" the internet, is there anyone having a link to the 409A regulations with an interpretation?

Second, is anyone aware of sample or free plan documents covering deferred bonus arrangements? I have a pretty good document, but want to look at one that has been updated for 409A to determine if I need to scrap the one I have and get a new one.

Third, the document I have is both a Trust Corpus and an Adoption Agreement, similar to a Qualified plan. The actual agreements for the participants are based on that Trust/Adoption agreement.]

Thanks in advance for your comments.

A former client of mine has called me with an oddball question: one of his employees has his wages garnished to cover his child support. My client tells me that his new cafeteria plan TPA had advised that this can be considered as a DCAP expense and paid by the plan. They want to take the amount of the garnishment out pre-tax, and pay the support via the 125 account.

I've been out of the 125 world for a year or two, but I certainly don't remember anything like this in the regs. If I remember correctly, the employee can't even claim DCAP expenses for a child for whom he is not the custodian. I can think of three possibilities: 1). I'm getting senile faster than expected; 2). the regs have changed while I wasn't looking; or 3). my client is getting bad advice. What do you think?