I was contacted by an individual, one man show, took a loan from the plan, only made an annual payment (principle and interest). I know the rules... at least quartely payments and if a payment is missed it is allowed to be made up as long as it is done before the next quarter.

My question... are there any exceptions to the rule... can he make annual payments? Semi-annual?

He is looking at a deemed dist... trying to help him out...

I am 27 years old and invested in a 401k plan at work, do I need an IRA or am I okay with a 401k for retirement needs?

I am 27 years old and invested in a 401k plan at work, do I need an IRA or am I okay with a 401k for retirement needs?

Suppose the accrued benefit in a 412(i) plan is defined as a unit benefit accrual (for example 2% of HC3 multiplied by years of plan participation payable at NRA) instead of the cash surrender values as allowed in 411(b)(1)(F).

The plan is going to terminate and assets will be far below the amount necessary to provide the accrued benefits (lets assume lump sums will be paid).

At this point I figure the plan has two options, but I am looking for a third.

1. Pay the entire accrued benefit to the rank-and-file and short the HCE,

2. Ask for blessing from the IRS to pay the accrued benefit to the extent funded to each participant, rank-and-file and HCE alike as mentioned in 411(d)(3).

Does anyone out there think that one may be able to take a deduction up to unfunded current liability as allowed under 404(a)(1)(D). The problem as I see it is that because section 412 does not apply to a 412(i) plan that one does not calculate current liability for a 412(i) plan (is everyone else out there just as tired of 412(i) plans as I am?)

Any other suggestions regarding how the plan sponsor could make a large deductible contribution when the 412(i) plan terminates?

An ESOP owns 100% of the corporate stock currently outstanding. There is a group of corporate officers who own options to buy stock in the future.

I realize that none of the stock allocated to participants is attributable to them for purposes of determining ownership. But is the stock owned by the ESOP included in the denominator in determining ownership percentages?

For example if an ESOP owns 100,000 shares of stock, and Employee Joe has an option to purchase 5,000 shares of stock outside of the plan, how is Joe's ownership percentage in the corporation computed for determining whether he is a > 5% owner?

Is it 5,000/100,000+5,000 = 4.76%

or is it

5,000/5,000 = 100%

Thanks for whatever insight you can provide. Again, I understand that none of the shares in the ESOP are attributable to Joe, therefore they clearly are not to be included in the numerator of the ownership fraction. What I am concerned with is whether the ESOP shares are to be used in the denominator of the fraction.

Once upon a time, the IRS took the position that if the investment of a term vested participant's account balance was more restrictive than that availbale to an active participant, the consent given by the terminated participant to receive his distribution was invalid since the disparity in treatment (i.e., pooled funds vs fixed income money market) resulted in the participant being coerced to take a distribution.

I cannot remember the citation ofr this position. ANy help?

401(k) Plan with safe harbor match. Eligibility is 1 YOS, 12 months, over 1000 hours, age 21. Dual entry dates (Jan 1 & July 1). The owner's son completed over 1000 hours in calendar 2002, turned 21 in March, 2004. He worked 509 hrs. in calendar 2003 and 526 hrs. in calendar 2004. My question is, does that completed YOS over 1000 hours from 2002 stay with him until he reaches age 21 since he didn't have breaks-in-svc in '03 and '04 (over 500 hours each)? This seems like it should be a basic thing, but I'm not getting a grasp on it this busy Monday...........thanks in advance for all thoughts.

Plan effective 10/1/2000 and had a short year 10/1/2000-12/31/2000. The valuation date was 10/1/2000.

The second plan year was calendar 2001. The valuation date used was 1/1/2001 and the Schedule B reported a change in valuation date/funding method subject to automatic approval under RP 2000-40.

Now the plan year has again changed to a 4/1-3/31 year causing a plan year of 4/1/2004-3/31/2005, thus making a valuation date of 4/1 desirable.

Is this a change in valuation date/funding method? Do we have to file for approval since the 4 year period has not passed?

Note that at no time was a change from a date other than the first day of the plan year used, so no change was made to the first day of a plan year.

Help please. Thanks.

Profit Sharing Plan has a 2 year waiting period....if the plan is top heavy does an ineligible participant become eligible in the first year???

403(b) participant had already begun receiving RMDs from her TSA. She passed away earlier in 2004 without having taken an RMD. No RMD was paid to her beneficiary for 2004. Is there some sort of exception to the penalty for not taking the RMD in year of death?

Plan X is a 401(k) plan that permits participants to have two outstanding loans at any time, either two general purpose loans or one general purpose loan and one principal residence loan. Participant A had a loan outstanding and requested a new loan. The Plan accidentally issued two checks and Participant A negotiated both. How should the Plan correct this? If the Plan were to treat this as a distribution, there is a prohibition on in-service withdrawals of 401(k) contributions that are not as a result of a hardship withdrawal. Does this pose a problem? If not, then I think Plan X could ask Participant A to return the amount of the extra check plus earnings or be informed that the amount of the extra check could not be rolled over and issue a 1099-R. Having Plan X pay the amount of the third loan back into the plan would be a windfall to A. Any thoughts?

I haven't seen any posts on this topic in a while so wondered if anyone could give me an update on their experience.

We're looking for a non-insurance company, non-mutual fund company recordkeeper that partners with TPAs and does not restrict fund selection or require certain funds to be in the plan.

We've talked with Ceridian, BenefitStreet, and Retirement Planners & Administrators so far. Does anyone have any plans on these platforms who could give me their thoughts/comments?

What about The Newport Group, 401kASP, Daily Access or Unified Trust?

Any input would be appreciated.

I have a doctor group, where one of the doctors wishes to have the fees for his self-directed account billed to the company and have them paid as a company expense.

I have not read any thing that would prevent this from happening, but I cannot find anything in writing.

On the surface it appears that this would be some type of plan discrimination, but if the company wishes to pay this expense, wouldn't that just be a perk for that doctor?

If anyone has any regulation or documentation, please share...Thanks!

Employee has initial charge of $650 in 2003 but no payments made until 2004. Two payments in 2004 were made against initial $650 of$150 and $250

Are these payments eligible under FSA?

Thanks for your help - this is not my area

We have a client who indicates that there is a "new" regulation that allows in-service transfers (regardless of age) of one-half of your 401K money to a personal IRA account one time each year.......has anyone heard of this rule and if so where I can find the reg?

I've run into a murky situation involving the 404(a)(3) deduction limit. The actual example is really confusing, so I'll try to just present the general question:

An individual owns 100% of company A and B, both of which are adopting employers of a Target Benefit plan. There are 2 employees plus the owner all 3 of which work and draw compensation from both companies.

Let's say that the total contribution required to fund the plan for 2004 is $100,000. Company A is responsible for $25,000 and Company B is responsible for $75,000.

But the problem is that the maxumum deductible contribution for Company B is only $70,000, while Company A's max deductible is $35,000.

Can Company B deposit (and deduct) the full $75,000 since they are being treated as a single employer under 404?

There seems to be a lack of regulations on this specific topic. ERISA Outline Book (2004 ed, pg 7.410) confirmed this, while stating that you "should" be able to take the higher deduction for Company B. Does anyone have other ideas on handling this situation?

Thanks

If you have a Roth IRA with one custodian and you want to invest the next year in something else with an entirely different custodian because the first is with one fund and you want to invest the second year in another fund or stock with a different custodian, is that acceptable?

What happens when a participant is terminated and receives Severance pay for over a year.... The plan administrator withheld deferrals from his Sev-pay for all that time and then all of a sudden he receives a check from the plan stating that it was all done in error, here is your $ back. It sounds like the guy slipped through the cracks, but what are his rights? He has lost out on over a year of deferrals saving for his retirement.

Thanks

Can a Roth IRA be invested in a Mutual Fund ($3000) the first year and the second year invest that $4000 in another Mutual Fund or Stock, thus having two Roth Ira's and as a matter of information a different Fund or stock in succeeding years?

To make my question a little clearer, I understand that it would be only one Roth IRA but there would be two different investments with two different holders or Trust Companies (if that is the proper term) of this Roth IRA. This is OK?

Client has roughly 350 employees, most of which are covered under an HMO. In addition, employer is a non-profit (church) with a very generous employer contribution (i.e. after 5 years of service, church pays 100% for employee and dependents).

Problem: The average age of this group is 55, and a large percentage of the older employees are at the 100% employer contribution level. Group is hesitant to modify the employer contribution due to the negative impact politically and affect to moral. Incumbent's rates continue to sky-rocket with competing carriers declining to even bid on business. Possible incentive to seniors to go on MediCare with MediCare Supp plan is desired.

Feedback???????