We have a Schedule C person with an age-weighted allocation formula. I'm OK with regular and integrated formulas, but am wondering how to set up the circular calculation for this type of allocation. If Tom Poje sees this post, perhaps he can help. I downloaded his self-employed/partnership calculation spreadsheet and found that my own spreadsheet was exactly like his as to the outcome - not the format. Any help/suggestions will be greatly appreciated.

In a community property state, husband and wife own 50% each of S Corp with a SIMPLE plan. Both are officers, and receive wages with SIMPLE participation. Wife also has unrelated Sch C income and wants to make maximum SEP contribution. Is this OK, or by attribution rules does she own > 50% of Sub S so benefits must be equal in both Sub S and Sch C?

often we see plans whose match is not exactly to the penny. this may affect a few participants who may receive $40 too much or short by $20. i believe there is a threshhold where the plan administrator has to make adjustments on the amounts. i want to say $20, but am not sure. for instance if the employer overcontributed by $15 on the match, it would not result in $15 being moved from that participants account to the forfeiture account. if an employer inadvertantly underfunded a participants match by $25, they would just make it up either by issuing a check or transfering from forfeiture account. or am i completely wrong.

I am looking for information regarding the distribution of SPDs and SMMs. Specifically, I would like to know if such material can be distributed electronically. My company's population can be divided into salaried employees, who currently have access to an online benefits library (all salaried employees have a computer terminal at their desk), and hourly employees who are mailed their material because not all hourly employees have a terminal at their work area. Indeed, we post material for salaried employees to review or print and do not distribute. Can we post hourly material electronically as well and avoid the mailing, or must we continue to distribute the material individually?

A controlled group sponsors 2 401(k) plans, each for a separate location. One has a 2 YOS requirement for match, the other has a 1 YOS for match. Both use prior year testing. For 410(b) purposes, the plans are being tested together. Can you test them together for the ACP test? If so, do you only test those who have 1 YOS at location A and 2 YOS at location B?

In one of the Treasury teleconferences post 2005-1 I remember hearing that, after 12/31/05, the exercise of discretion to terminate a plan and distribute the assets would be deemed a material modification and thus violate 409A, even if the plan document allows for it. I've referred to my notes and my impression then was that the only allowable termination/distribution for a grandfathered plan would be under an "automatic" plan feature (i.e. financial trigger).

Since that time, another (well respected) advisor has disagreed with my understanding. Would you weigh in?

Thanks,

Joe

married couple ages 30 and 28. he makes about 80k annually contributes appx 7000 to his 401(k) which includes match. he puts in 4% and they match up to 4%.

she made 13,400 as a self employed medical transcriptionist in 2004. usually she makes 19 to 20K. they have about 154k in cds and 36k in savings and feel they pay too much in income taxes.

would directing her income into a SEP be a good idea? roth IRA?

I have a Corporation that is a Tax-exempt non-governmental employer, which has a 403(B) Tax-deferred Annuity Plan.

Is it possible to have a 2% Employer contribution that is not a Match contribution?

We are a TPA who recently had a company terminate their FSA plan due to being acquired by another company. We have paid out more money in reimbursements than what has been made in deductions. We have sent them a spreadsheet outlining this. Is there any legal jargon that states that if they terminate their plan they are responsible for paying if the reimbursements exceed the deductions?

Is there a standard in the industry to determine the selling price of an actuarial practice?

What might the variables be?

Thanx.

Suppose you have a DB plan for a small, privately held company (10 employees), with funding of the plan based on individual aggregate approach (i.e., funding each year is equal to the sum of the normal costs for all employees). The employees have anywhere from 10 to 40 years until retirement.

My question is: how does the actuary go about picking the interest rate (pre- and post-retirement) to use in calculating the normal cost? Are there regulations or guidelines published anywhere? Is the rate typically based on some margin above long-term treasuries, corporate bond rates, etc.? Is a single rate always used for all employees or can the rates vary depending on the lenght of time to retirement for each employee?

Any insight as to how actuaries think about this would be appreciated. Thanks.

Two employers that are related by ownership but are not part of a controlled group participate in the same safe harbor 401(k) plan. What are the issues unique to being a multiple employer plan?

1. ADP and coverge testing are separate.

2. An attachment to form 5500 must be made indicating that the plan is a multiple employer plan.

3. what else?????

Client has MPPP. Wants to convert to a safe harbor effective May 15, 2005

(calendar year plan)

Is this allowed?

Do I have a short plan year for 2005 for safe harbor or can I use comp for entire 2005 plan year

Have anyone seen the Book The CPA's Guide to Retirement Plans for Small Businesses- Edited by Gary Lesser. Good stuff

In a qulified plan, under certain conditions you are allowed to withdraw any pre 1987 after tax contributions first (amounts representing basis) before any earnings have to be withdrawn. With amounts contributed after 1986 you must withdraw the after tax contribuitons (basis) and income pro rata. The support for withdrawing the after tax contribuitons first on amounts contriubuted pre-87 comes from Code Sec. 72(e)(8)(D). Code Sec. 408(d), dealing with IRA distribuitons indicates the Code Sec. 72 rules will apply regarding the taxation of IRA distribuitons unless something else in 408 overrides. I see nothing in 408 that would prevent pre-87 after tax amounts that have been rolled out of a qualified plan and into an IRA for being aforded the same treatment they would have been afforded in the qualified plan, that is they can be withdrawn first, prior to any imcome being taken. Am I right in this conclussion or have I missed something?

If I am right, it appears the 8606 form is not set up to take this into consideration. Any suggestions for how to report this type of distribuiton?

Thanks in advance for your help.

Dean Huber

When are the contributins on an owner required to be made. The case at point is a sole proprietor. He does not have a set salary to withold contributins from. Can he elct a contributoin st yearend?

Hello. I'm currently a NJ state employee with 7.5 years in the PERS (414h) pension system. Repeatedly, bills have been introduced in the legislature seeking to lower the vesting requirement from 10 years to 5, but for some other reason other benefit enhancements are always passed instead. It doesn't even look like the bill will make it out of committee this legislative season. I will most likely have to leave the state soon due to heatlh reasons, but am trying to hang on until I'm vested. I've noticed that most states, including NY, PA, DE, etc., require only 5 years for vesting purposes. In fact, it seems like most states nowadays only require 5 years. Also, this defined benefit plan is not covered under ERISA.

Do you know of any federal law that might require the state to change this vesting requirement soon? I have no idea why the NJ legislature prefers to remain out-of-synch with the times. Any information would be greatly appreciated.

Here is the situation. 10/1 plan year changed to a 1/1 plan year effective 1/1/04.

ADP/ACP test was done 10/1/02 to 9/30/03.

Short Year ADP/ACP was done 10/1/03 to 12/31/03.

Now doing the 1/1/04 to 12/31/04 ADP/ACP nondiscrimination test and the Prior Year Testing method is used.

What are the PY Method rules in this situation? Do we use the short plan year NHCE average?

Thanks for any help!!

OK April 15 is coming up really quick. So please give me some advice:

First little background. I DO want to take the time to look into my investment options and figure out what is best for me. I did Economics as one of my majors as an undergrad so I have some knowledge of investing. But I have been lazy and procrastinating so I never put that knowledge to use. I notice now it is April 6, and I want to start a Roth before the 15th. I have $7k to contribue for 2004/2005 right now, so....

Please help me choose a temporary custodian/investment. Somewhere I can just start with for the next 6months or so while I do research and try to understand what is out there. I'm thinking maybe a market index type fund at a brokerage? Maybe a Fidelity/Vanguard/T Rowe??? I don't really know what the best options are for me at the moment so please give me specific recommendations that you think would be good. I really want to get started now so I can get that 2004 contribution in. Help? Please?

Is there any reason why an in-service withdrawal under a profit sharing plan cannot be rolled over to another qualified plan?