DC plan is terminating. The plan says that expenses can be paid from plan assets, but I know that certain expenses really can't be. Can expenses to locate missing participants be paid from the plan assets? Can they be charged to the missing participants' accounts? It sounds reasonable to me, but I would like another opinion.

We took over a plan that has not filed the Schedule P for several years, but they did file the Form 5500. Should we just prepare 5500 Schedule P's for the delinquent years and send them to the regular mailing address for the Form 5500?

We have a cross tested psp on a corbel vs document owners and non-owners are the groups. Due to a demographic shift the x-testing does not work without massive contributions to the non-owners. Can we shift to an integrated or pro-rata allocation and deem it to be a safe harbor allocation formula?

Does the employer need to be concerned about the plan provisions or contribution levels going into the safe harbor 401(k) plan for the non-union employees, as long as the union employees are participating in the multiemployer plan? In other words, does there need to be any syncronization of benefits between the two plans?

Our client thinks that he read somewhere that the frequency of elective deferral deposits can be limited (made less often) if the TPA costs increase as the number of deposits increase. He could realistically deposit deferrals every pay period, but doesn't want to because his TPA fees will go up.

I can't imagine that the IRS gives a hoot about what his TPA fees are. Any thoughts?

An Law firm with five employees and an exisiting SEP made a mid year contribution of 3% of pay to the SEP for the plan year 2004. The client adopted a crosstested PSP at year end. Can the 5% gateway be reduced to 2%, ie. offset by the sep contributions? The ERISA outline book chapter Nine, references that contributions to "other plans" of the employer can be used for 401a4 testing. Do SEPs qualify as an 'other plans' ?

Client has a 25% MPPP they no longer want because older owner retired. They want to adopt 3% SH 401k Profit Sharing Plan for 2005 calendar year.

If we amend MPPP to a 0% formula, distribute the 204(h) Notice and restated the MPPP to a PSP with k feature, am I stuck with a short plan year? If so, can I have a short plan year for a safe harbor k in this situation?

Wouldn't the client be better off restating to a 401k PSP for 2005 and then adding safe harbor for 2006?

Help

Does anyone have a sample letter to participants letting them that the employer made a great PS + SH contribution for them? I have a client that wants their participants to know just how generous they are.

If a participant is at the 415 dollar limit, with an implied 5.50% interest rate for 415 lump sum purposes, and the current liability rate is below 5.50%, is the maximum deductible contribution based upon RPA CL affected by the 5.50% 415 limit (net of the mortality difference of course as well), or is a higher deduction allowed on CL calculated below 5.5% without regard to the lump sum 415 limit?

Of course an annuity purchase may be more expensive than a 5.50% 94 GAR lump sum.

I am drafting a Safe harbor 401(k) with 3% non-elective contribution. The employer wants to include an in service withdrawal provision to allow participants who are 60 and still employed to make withdrawals from their accounts. Our document is set up to list the accounts from which they can withdraw funds. Is there anything preventing withdrawal of safe harbor contributions?

Thanks.

I have an end of year one participant plan. The benefit is 100% of high 3-year average compensation. The participant is 68 years old and has 10+ years of plan participation as of 12/31/2004. His high 3-year average compensation is $205,000.

Two questions:

1) How do I calculate his age adjusted 415 $ limit at 12/31/2004?

2) What is the present value of the age adjusted 415 $ limit at 12/31/2004?

I'm sure I will need to provide more information, so just tell me what you need.

In 2004, I have recharacterized my traditional IRA into Roth and at the year-end I got a 1099-R showing the total amount as taxable distribution. Unfortunately, I lost all the money in this Roth IRA through some bad investments. I still have my account open and this is the only Roth account. My understanding is that I can claim the Roth IRA loss under misc itemized deduction subject to the 2% floor, but I need to close my Roth IRA account. In 2004 I do not have any other income other than this distribution which I completely lost, so I was thinking I should NOT be paying any taxes (I have some other capital losses which offsets more than the 2% floor I cannot deduct, thus making my taxable income zero). However, if I close the account, this will be considered an early withdrawal of the original traditional IRA and I need to pay a mandatory 10% penalty. Is my understanding correct and is there a better solution?

Can an inherited IRA be rolled into a Roth IRA by paying the taxes?

Can anyone point me to a link or other references that briefly explain ERISA compliance requirements as they apply specifically to public agency retirement plans, e.g. a 401(a) plan sponsored by a school district for its non-teaching staff?

I understand that there are some differences in ERISA compliance here versus for private sector employers' plans.

Thanks.

Would anybody be so kind as to tell me what ITO Amortization is with regards to PEBOPs and FAS 106?

I read suze ormans Young fabulous and broke book..and I want to open a Roth Ira, I am 26, married with 2 small kids.

I am looking at scottrade.com to open an account, but I really dont know if thats the best way to go. My credit union says to call AIG for financial advising, but I think they are commission driven.

I want to invest in mostly stocks, but I do not understand how to see if they are no-load or what they charge. When I look at the prospectus, I don't feel comfortable that I'm reading the all of the fees correctly.

Can someone please recommend a few good places to invest. Suze reccommends "85% in an index fund that tracks the entire market and 15% in a foreign stock fund"

I'm fine with that, but I need a few names...you know the no load, low annual fee. I'll put my 85/15% there...I just need to know the symbol...

I'd like to get in before the 15th deadline for last year. So my questions are:

What company should I use to open an acount?

What are some investments that have great ratings, low/no fees? (i know this is a broad question...but I'm so lost in all the small print)

thanks,

Stacey

General question on SH 401(k) cross-tested plans that allocate the 3% SH and allocates the rest under profit sharing. Using cross testing, what is the effect of adding a discretionary match? Wouldn't this lower the highest allocation rate for the HCE's thus lowering the NHCE's rate? This seems like a better design, especialy if very few NHCE's contribute to plan. Disregard the matching cont. for rate group testing?

any thoughts appreciated

A client has put down a deposit for a unit in a development which is still far from being completed. Does "Escrow Deposit" count as real estate?

Thanks.

Doctor participates in SIMPLE - he is 52 years old & will defer $12,000 max into plan for 2005 ($10k max plus $2k catch-up). W-2 income is $360,000. Assuming employer elects the 3% matching option, what will the employer contribution be? One webite calculator showed the 3% figured on $210,000 (similar to the cap on the 2% nonelective option) while another showed the 3% figured on total comp.

Is there any exception to having the independent qualified public accountant audit for a plan that has over 100 participants at the beginning of the plan year?

In particular, what if the plan was terminating during 2005, but had over 100 participants as of January 1, 2005, do they still have to have the audit?

Thank you for any insight!