I need some help with the following RMD:

Participant is a terminated vested non-5% owner. Employer was unable to locate him until this year, which is why he did not go into pay status at age 65.

Plan actuarial equivalence = UP84 (pre and post retirement mortality) @ 7.00%

DOB = 10/1/1933

Initial distribution year = 2004 (first RMD must be paid by 4/1/2005)

Monthly accrued benefit at 12/31/2003 = 165.93

Age at 12/31/2003 = 70.25

Present value of AB at 12/31/2003 = 165.93 x 90.5175 = $15,019.57

Applicable divisor from Uniform Life Table = 26.5 (using participant's age in 2004)

Required Minimum Distribution that must be paid by 4/1/05:

$15,019.57 / 26.5 = $566.79

Two questions:

1) Is the above calculated correctly?

2) How do you calculate the amount of the next Required Minimum Distribution (that must be paid by 12/31/2005)? (Please use actual numbers)

I need to know the deadlines for amending plans to comply with these two law changes. I know they go way back and I can't find my old stuff. OBRA 93 change for rollovers and 401(a)(17) reduction to 150,000.

A public company wishes to use company stock in their 401(k) plan (as a match or profit sharing contribution, and an investment option). Are there restrictions on the amount of stock used as a match or a profit sharing contribution? Is a stock match/contribution the same as a cash match/contribution for 401(a)4 testing and safe-harbor?

I have seen previous discussions concerning a KSOP plan design. Based on what I have read, it seems that the primary advantage to creating a 401(k)/ESOP plan would be that the dividend would be tax deductible. Is this correct?

A company has a 401k plan with less than 120 participants. They have acquired a

second company. When the second company's employees become eligible they will have well over the 120 participant count that requires an audit. Is there any

problem in establishing a second identical plan for the new company's employees to avoid the audit requirement for both plans? Is there any problem in including

all new hires in the original company in the second plan to assure that the first remains below the audit level of 120 participants?

We have a plan changing from a fiscal to a calendar plan year. We will have a

short (1 month) plan year. The plan uses the prior year testing method. For the calendar year following the short 1 month plan year, is it proper to use the NHCE

%'s from the 1 month year?

Just a confirm. Client is non-gov, not for profit entity. Has 401(k) plan that the key ee maximizes by contributing the full 16K for 2004. Can they contribute another 13K in the 457(b)? I also assume no catch-up available in the (b)?

Thanks

Does a spouse have to be named as a beneficiary in a 457(b) governmental deferred compensation plan?

If a 401(k) plan is established via a collective bargaining agreement, is it necessary to do ADP/ACP testing?

If necessary to do the testing, what do you do if it fails? If the plan were a DB or DC plan you have the 415 limits, but you do not test discrimination under 401(a)(4) because the benefits are negotiated.

Are there any cites pro or con?

Not surprisingly, I am confused by the final regs and the exception for the 12-month rule for safe harbor plans in the year a plan terminates.

The plan makes the 3% not the match.

The regs say the plan will not fail to satisfy the requirements for safe harbor if it satisfies the requirements through the date of termination and EITHER 1) treats any suspension of safe harbor matching as a reduction or cessation subject to a 30 day notice requirement or 2) the termination is because of business hardship or transation described in 410(b)(6)©- probably a merger or acquisition.

Can anyone determine what this means for plans that make the 3%. Neither of these would apply if there is no match made. So, either it means 3% plans automatically satisfy 1 or satisfy neither and therefore must provide the 3% for the entire year or lose safe harbor status if it termintes mid-year.

Help!

Thanks

Stupid question. I have a 401(k) that covers union and non-union. Only one union group covered. Eligibility is 6 mo for deferrals and match. Do I have to test separately, union and non-union. Or can I test the whole thing as a single plan? I seem to remember something in an old pension answer book, that says a company may but is not required to treat the plan as separate plan. Does that only apply to minimum participation?

Thanks in advance.

Our office has been getting copies of letters sent to our clients from NYS Dept of Tax and Finance looking for a form NYS-45-ATT-MN. The form does not seem to apply and it does not make sense. We never got these forms in the past. There were no taxes withheld for NYS purposes. What is required to send to NYS as a transmittal form along with copies of the 1099R's?

There used to be a 401(k) forms and worksheet book, but Aspen Publishers no longer publishes it. Is anyone aware of something similar, preferrably on CD?

Can you provide that a deemed distriubtion to a zero percent vested participant will occur when employer sources are 0% vested? I.e., allow a forfeiture even if there is a 401(k) balance allocated to the participant.

Could anyone provide a 'dummies' version definition of a 401(k) catch up provision?

Also, what are the contribution limits nowadays?

Thank you!

Assume Ray is a participant in a nonqualified deferred comp plan. The plan provides a defined benefit type benefit payable only when Ray's employment is terminated.

Ray's employment will terminate on June 30, 2005. From January 1, 2005 through June 30, 2005, Ray's wages are $300,000. On his termination date, he is entitled to the nonqualified plan benefit which is, in its normal form of payment, equal to a monthly payment of $10,000 for life. The Plan also permits Ray to elect a lump sum payment which, using the plan's actuarial equivalence factors is equal to $1,200,000.00.

For FICA purposes, none of Ray's nonqual benefit should be subject to the OASDI tax (since he has already earned more than $90,000). However, is Ray's HI tax equal to 1.45% of the $1,200,000 (the present value of the benefit) or is it 1.45% of each $10,000 payment (when the payment is made--assume Ray does not elect the lump sum)?

As I read the FICA rules, the present value of Ray's benefit is includable in wages for FICA purposes (in this case that would be $1,200,000) on his termination date (which is the date on which the benefit is no longer subject to a substantial risk of forfeiture). However, the client's employee benefits consulting firm has told the client that the form of payment dictates the FICA treatment so that if Ray elects the lump sum, then the $1,200,000 is treated as a wage on his termination date, but if Ray elects monthly annuity payments, then when each payment is made it is subject to FICA then. Please help!!!

I realize this is a very broad topic, but is there anyone out there would could help me define what needs to take place during a transitional period due to acquisition of a retirement plan?

I am familiar with the management of H&W plans during a transition to an outsourced vendor but am not familiar with the management of pension plans taken over by an organization due to an acquisition.

Any and all information would be appreciated.

I know an inherited IRA for a non-spouse beneficiary must be maintained in the deceased's name. Does this rule apply for inherited 401(k) and qualified plan assets?

Thanks

Can't we pretty much allocate a QNEC to whoever we want to to pass ADP testing, and just make a corrective amendment?

Can someone also confirm my understanding of the effective date of the bottums up QNEC allocation rules. I believe they are effective for plan years beginning in 2006, is that correct?

Hello everyone. I am 24 years old and just recently started my first job. I am looking into investing into a Roth IRA. All the articles I've read and people I've talked to encourage a Roth, but no one every really mentions any downsides.

So my question is, ARE there any negatives to a Roth IRA over another type of retirement investment. Has anyone had any bad experiences I should look out for?

Thanks!

I have searched prior threads about accepting rollovers for terminated employees. In most cases, they are not accepted by the current plan because the person rolling the money over is no longer an employee. Most plans limit rollovers into the plan to "employees".

What do you do when the employee request the rollover from his prior employers plan and then terminates from his current employment while the money is in transit? Does the fact that the rollover was initiated while he was still an employee have any bearing on the issue? To accept or not accept, that is the question?