Our company pays for STD for all PT and FT employees. One of our employees received benefits for her FMLA under this plan, but is now terminating her employment before the full FMLA leave has been exhausted. Can we recoup any of the employer paid premiums for her benefits now that she has terminated voluntarily?

How should a more than 5% owner of a company, who does not take a salary, be treated for purposes of the top heavy test? We take the conservative route and classify him as ineligible since he has no comp, that he's not included in the ADP since he of course is not able to defer anything with no comp. The question is, should he be included as a key employee in performing the top heavy test, even though he is ineligible?

I know that there are several previous threads about this topic. I've searched for and read the earlier discussions, but I can't find a comprehensive answer to my questions. I'm hoping you'll bear with me as I raise this issue yet again.

There's a direct rollover from a QP to an IRA. The TPA goofs and distributes too much money. The individual gets to keep the overpayment, because the plan fiduciaries successfully recover the full amount from the TPA.

1. I'm certain that the overpayment is the participant's taxable income and isn't eligible for rollover. Can anybody cite an authority for this?

2. Would you issue two separate Form 1099-Rs? My thought is to use one Form 1099-R for the amount of the "real" rollover, with Code G, and another Form 1099-R for the taxable overpayment, with Code 1.

3. Doesn't the plan administrator have some obligation to notify the IRA trustee about the overpayment?

4. Does the individual have IRA basis for the taxable overpayment?

I thank you, in advance, for both your help and patience.

I have very little experience with church plans and would appreciate some help.

If a private college is "affliated" with a church convention, does that automatically qualify them as a church plan? If not, what are the key points to review in order to determine if an employee benefit plan is indeed a church plan?

Thank you.

I have a top heavy 401(k) plan that has a match and also provide an additional PS contribution that is integrated. The doc states that the match will go toward satisfying the top heavy minimum. My question is basically "can the match be used in integration"? For some reason I thought it couldn't, but when I allocate the additional contribution it is considering the match in the integrated formula.

Any thoughts?

Thanks,

Carson Vaughan

I'm looking at a tax-exempt 457(b) plan document using a TIAA-CREF prototype. The base document provides for lump and annuity options. It's my understanding annuities shouldn't be offered by a tax exempt 457(b) plan if a lump sum option is also permitted. The amounts become available and taxable. Am I wrong?

I WOULD JUST RATHER HAVE ONE THING TO WORRY ABOUT. BUT WHEN I SPOKE TO THE GUY AT OTHER COMPANY HE SAID THEY WOULD TRANSFER THE IRA FROM MET LIFE TO THEIR BANK BUT KEEP THE ORIGINAL YEAR AS TRADITIONAL. HE SAID THE NEW CONTRUIBUTIONS WOULD GO TO ROTH. i DIDNT UNDERSTAND WHY HE WANTED TO DO IT THAT WAY. i JUST WANT IT ALL IN THE ROTH. i DONT WANT TO LEAVE THE ORIGINAL CONTRIBUTION AS TRADITIONAL. PLEASE EXPLAIN WHY HE WOULD WANT TO DO IT TAHT WAY. IS IT A PAIN FOR HIM TO TRANSFER IT?

Ours is a TPA firm, no product, so we work with a lot of different financial advisors, many of whom bring admin business to us. When an employee terminates employement or retires (particularly those with larger balances or benefits), we normally let the financial advisor know ASAP so that she can get a jump on talking to the employee about rolling the money or providing other advice on how to handle their money. Is there anything wrong with this, technically or ethically? Normally the advisor would know about it anyways when it comes time to move money to pay the person out so I don't really see a problem here, but wanted to check to see what others think.

In an ongoing profit sharing/401(k) plan, how are forfeitures handled? I understand the different ways to try and locate missing participants, and I understand that if they ever come back it must be reinstated. Aside from those issues, the plan uses forfeited matching contributions to off-set future matching contributions. The plan even provides for accounts of missing participants to be forfeited, but what then. Should they just distribute them pro-rata to all participants? Should they treat the forfeitures the same way as the matching contributions? I just don't know.

I have a participant that had a distribution from his account because of a QDRO. The QDRO was immediately payable and the wife took the money right away. When I show this as a withdrawal from his account in Datair (not as a transfer), the accrued to date calculation is adding this withdrawal back into the participants ending account balance. (Pooled PS account only).

Is this correct? I could not find anywhere that says this should/should not be included in the participant's account balance for the accrued to date method.

Second part would be: Do I have to keep including this withdrawal for any reason beyond this year?

Thanks

Rick

For a distribution to be reported on Form W2 from a non-qualified deferred compensation plan, what withholding rate for federal taxes should be taken?

I have read several differing opinions as to whether the account balance on the determination date should include 401(k) deferrals. For example, if the determination date is December 31, 2004 and the plan's last payroll date is December 31 but the contribution is not made until January 5, 2005, are these deferrals included in the participants' December 31 account balances for testing purposes?

Scenario 1: Doctor group pays full medical premium (insured plan) for all doctors, but only pays a percentage for non-doctor employees. Non-doctor employees are permitted to pay their part of premium through 125 plan. Nondiscrimination problem? What if 125 plan says that all doctors are excluded from participation?

Scenario 2: What if the doctor group was an S corp, so the 2% shareholders are excluded from participation by law? Wouldn't that help the nondiscrimination situation, as those shareholders (who are also HCEs) would be taxed on their premiums and, in theory, shouldn't be counted as part of the testing?

I've reviewed old posts on this issue and haven't found a consensus view. Thanks

COMP. "A" BECAME A MEMBER OF A CONTROLLED GROUP IN 2004. IN 2003 COMP. "A" WAS OWNED BY A CANADIAN COMPANY WITH NO 401(K). IN 2004 COMP. "A" ESTABLISHED A CALENDAR YEAR 401(K) TO PROVIDE BENEFITS TO ITS EMPLOYEES SOME OF WHICH WERE EMPLOYEED WHEN OWNED BY THE CANADIAN COMPANY.

IN ORDER TO DETERMINE WHO HCE'S FOR 2004 ARE, WOULD YOU STILL LOOK AT COMP/OWNERSHIP IN 2003? ALSO, IF AN EMPLOYEE EARNED IN EXCESS OF $90,000 IN 2003 AND/OR WAS A 5% OWNER, YET WERE NOT EMPLOYEED IN 2004, WOULD THEY FACTOR INTO THE ADP/ACP TEST? WHAT IF THEY WERE REHIRED IN 2005?

THANK YOU KINDLY.

I guess this has always bugged me and I'm hoping to get some clarity.

It was my understanding that 10% federal withholding applied to corrective refunds of excess contributions unless the participants elect out.

Now I am being told by one of the recordkeeping firms, that the 10% withholding only applies if the distribution is made after March 15.

Can anyone shed some light, share some insight.

Many thanks

We have a multiple employer DB plan. One of the companies in the controlled group wants its own plan, so we are spinning that portion out to a new stand alone DB plan for that company.

Suppose a few years from now we sell that company and it is no longer part of the controlled group. Subsequent to that, the company has difficulty and ends up in a distress termination.

Can the PBGC come back to us as the prior parent if the new entity is no longer in the controlled group when it suffers the distress termination?

Thanks for your thoughts!

Situation:

A company is spun off from a larger company in 2004. All employees were terminated and then rehired, hence we had a distributable event.

The new company has over 100 employees and participants.

Does this company need to have a plan audit done for 2004?

I thought I read somewhere that if the plan has been in existence for 7 months

or less, it does not need to have an audit performed.

Thank you!!

If a plan defines 1st year eligibility as something like "Anyone in employment on xx/yy/zz enters immediately. Anyone employed after that date enters on the next entry date after completing 21/1", no one is excludable for purposes of 410b/401a4 for the first plan year. What if 21/1 also applies to to the "Anyone... on xx/yy/zz"? Are those employed after the magic date now excludable? In other words, are the entry dates relevant? Or do I now have an amendment that may discriminate in favor of HCEs?

We have an opportunity to get a 401(k) Plan with over 100 participants. We generally specialize in small plans with higher assets. The investments are with listed mutual funds. Can anyone tell me if there are different rules that apply when there is 100+? Or direct me somewhere to find out? Is there a special audit that needs to be done? etc... Thanks!

I would like to open a Roth, but a financial advisor from a company I don't consider to be completey on the up-and-up (they were just in trouble with the SEC) said I do not qualify because I do not work.

Can someone clear this up for me, or point me in the right direction? Do you have to have a minimum income for a Roth IRA? TIA for any help.