Does anyone know what the record is for the most views on an individual post?

I have to think that the 1,006 views on the "Best retirement pension plan" post in the Retirement Plans in General Forum would have to be in the running.

I have to admit that I have found the bickering to be quite addictive. The posters may not mean to be entertaining, but they are! It is like rubbernecking at an accident, you don't mean to look, but you just can't help it.

The new COBRA law requires updates to SPD's - is this applicable to employee groups of more than 50 or 100?

Ground floor

I have a medical practice that is owned equally by 11 doctors. These same 11 doctors own another side business operated in conjunction with the medical practice.

The medical practice has a PS 401k plan and already maxes out the doctors' PS/401k contribution each year. The doctors are now asking if they get get a $42,000 contribution in 2005 from each of their companies.

My opinion is that they cannot do this since both businesses have the same owners. Am I correct? If not, please let me know.

A 20 participant DB is sponsored by a professional corporation. The company and plan have a December year end.

Suppose the pension contribution is $100,000 for 2003, the corporation goes on extension and the full $100,000 is funded by September 15, 2004. However, the accountant files the tax return prior to the final $10,000 deposit and only deducts $90,000 for 2003.

Question: can the $10,000 plus the 2004 contribution be deducted on the 2004 return? Or, could $10,000 of the 2004 contribution be pushed to 2005? Assume there is no 404(a) limit problem.

I seem to think they cannot because the last $10,000 deposit was contributed timely for the 2003 return and the only way to remedy the problem is for the accountant to file an amended return for 2003.

Anyone disagree?

Thanks much.

Is it ever possible to change a payment election after benefits commence?

In this case a participant was terminated and elected a form of payment on Dec. 17, 2004. The first payment was made Jan. 3rd or 4th of 2005. The amount of the payment was not what was expected, so they contacted the sponsor. The sponsor said that the payment was correct based on the form elected. They also indicated that the plan did not allow for a change of payment after benefits commence.

This participant is mentally disabled (they are receiving the benefit as a termination payout, not a disability benefit). The only reason I mention this is that I'm wondering if there might be something like the ADA that would override ERISA and/or the Plan Document, assuming that the participant did not understand the election form.

Also, an attorney helped this participant at the time of termination. Apparently, the participant was terminated a couple of months prior to qualifying for a significantly larger benefit. The plan sponsor agreed to change the termination date to allow for the larger benefit. At the time the attorney helped with the benefit amount, it was clarified in writing that the form of payment should not be the form that was eventually elected. The participant probably chose the form that had the largest amount (accelerated distribution for 4 years, and offset by SS after four years).

Thanks

A client just added a HDHP with individuals HSAs. However, the HSA provider has not yet set up the individual accounts. If the accounts are not set up by 1/31, does this mean that the HSA can't reimburse expenses from January, since the account won't be set up until February?

A top heavy 401(k) plan has a permitted disparity allocation formula and a safe harbor match. The plan's entry date for salary deferral and for the safe harbor match is the first day of the month following employment. The employer's discretionary allocation requires the completion of age 21 and 1 Year of Service.

All employees, who have entered the plan, will receive at least the 3% minimum, either directly through an employer contribution, through the safe harbor match, or a combination of the two sources. The employer is also making a discretionary contribution to maximize the owner.

Of the employees, who met the age 21/1 Year requirement, 87% of the NHCE benefit under the permitted disparity formula. If the employees, who do not meet the age 21/1 Year are included in the ratio, coverage fails the percentage test, since they receive the top heavy only. Can this second group (otherwise excludable) be disaggregated for testing purposes? All of the HCE have met the age 21/1 year requirement.

I see that IRC §§457(b)(4) holds that:

"... the term 'eligible deferred compensation plan' means a plan established and maintained by an eligible employer...which provides that compensation will be deferred for any calendar month only if an agreement providing for such deferral has been entered into before the beginning of such month."

It seems reasonable to expect that somebody makes an election to defer before they have an opportunity to receive the deferred compensation in hand, but why must the election be made before the beginning of any particular month? Does this mean that any changes must also be made prior to the beginning of the month in which the change takes effect? Is this just "old" law that has not been updated for current technology and recordkeeping practices?

Thanks,

Ruth

What are the standards the IRS is to use in approving a change of funding method? In the case at hand, a DB plan is changing to funding method that would be automatically approved under 2000-40 but for a prior change was made in 2000.

I have just restated a profit-sharing plan which received a favroable determination letter for GUST to add 401(k) provisions. Both are volume submitter documents. My question: should I submit the 401(k) plan for a favorable determination letter now or should I wait til it must be updated and submitted in the new proposed staggered remedial amendment period?

I may have completely missed this, but did a new rule come out on what contribution must be made for a Plan participant who is not given the chance to defer when he/she becomes eligible to participate in the Plan? (I know the old rule was that the employer had to contribute the average percent for the NHCEs - however, someone just mentioned a 30% rule?) Thanks.

Hi,

I am a former employee of a company that has an ESOP plan which was formed during my last year of employment. I resigned 5 years ago and was 100% vested immediately. So this year I am finally due my 1st payout. I just received my annual certificate that shows what my shares are worth, and this year there is a line item theat reads:

"Shares of Forfeitures" with an NEGATIVE amount that represents about 35% of my account!

In the past this amount was a buck or two, now its over $4,000.00. Can someone explain to a total novice what this is and why I'm getting shafted?

Thanks!

How do you handle the forfeiture of merged money purchase monies in a 401(k)? Do these monies still retain the taint of money purchase once they have been forfeited by a participant? I have been keeping up with them in a separate account and reallocating them; however, this year the employer wants to use the monies to reduce the matching contribution that they are making. Can this happen or do I have to track them separately due to the restrictions on the money purchase monies? (I do not have JSA on the profit sharing monies.)

Hmmm?

I talked to a bank investment broker today . He wanting to sell me a annuity from

a company called ING. He said I had the option to pick mutual funds but I

would get 7% if my funds went bad. He explained the plan to me and it

looked good but it seemed complex. It was at least a 1O year investment.

How do I find out about this company called ING or any annuity company.

How do I know if that company is not another Emron or whatver. How do I

begin go do my research on a company like ING? What happens to a annuity

if a company goes broke?

Thank you,

Is it your understanding that the special transition rule under Q&A 4(d)(iv) of 2005-1, for payments pursuant to the exercise of an SAR "granted pursuant to a program in effect on or before Oct. 3, 2004", is intended to protect SARs granted now if the program was in effect last Oct. 3?

Plan has formula: 6.66% times Years Of Service up to 15. Benefit is accrued using fractional rule with maximum denominator of 20. NRA is 65&5, or if earlier, “55 and completion of 16 Years of Service”. Year of Service requires 1000 hours. Document describes denominator of Accrued Benefit fraction as “Years of Service the participant would accumulate if employment continued until NRA”

A full-time employee, born 1/1/51, is hired 1/1/90 and is still employed on 1/1/05. The numerator of his Accrued Benefit fraction is 15 as of 1/1/05, but what is the denominator of his Accrued Benefit fraction as of 1/1/05?

Here's the situation:

1. Roth IRA funded by conversions from traditional IRA

2. Five years have NOT passed since the conversions

3. I am over age 59.5 and was when I made the conversions

4. There were no non-deductable contributions involved

If I withdraw some of the amounts, less than the amounts converted, do I have to pay a 10% penalty?

IRS Pub 590 is very confusing. When they mention the 59.5 exception, it is not clear if it applies for this case. Please help.

Dick

A corporation with a 401k plan makes EFTPS payments for their payroll on a semiweekly payroll schedule. They have a 401k plan with a separate EIN for the Trust and make the 20% tax withholdings under that EIN. The question I have is do the payments for the plan trust have to comply with the deposit schedule of the corporation, or can they make the tax deposits on a monthly schedule (assuming they qualify for monthly)? Thanks for your responses.

Amounts deferred prior to 2005 are "grandfathered" and are not subject to 409A, unless "the plan under which the deferral is made is materially modified after October 3, 2004." §409A(d)(2)(B). Notice 2005-1, Q/A-18(a) states that "a modification of a plan is a material modification if a benefit or right existing as of October 3, 2004 is enhanced or a new benefit or right is added."

Is it possible that the IRS would view the formation of a Rabbi Trust to fund grandfathered deferrals as a material modification? (Assume the Rabbi Trust would not violate the new rules in 409A re: springing Rabbi Trusts and foreign trusts.)

Instinctively this does not appear to be a material modification for several reasons. The addition of a Rabbi Trust change does not affect the plan itself, but rather the plan's funding mechanism. Also, a Rabbi trust does not protect the participants' assets from creditors, although it does prevent the company from disposing of the assets, except to pay benefits.

The Conference report contains the following in the summary of present law on p. 293: "Arrangements have developed in an effort to provide employees with security for nonqualified deferred compensation, while still allowing deferral of income inclusion." Could this provision of security after 10/3/04 (by adding a Rabbi Trust) be viewed as the enhancement of a right (e.g. the right to receive the benefits)?

I can't help but think that if Rabbi Trusts could not be added to old deferrals without losing their grandfathered status, that the IRS would have said so in the guidance issued to date or informally in the seminars and teleconferences that their representatives have attended. However, I would be interested in hearing others' views on why it is still ok to add a Rabbi trust to pay grandfathered benefits.

Thanks in advance.

I've decided to pursue a professional designation, and am trying to decide which is the more useful: QKA (Qualified 401k Administrator, by ASPPA) or RPA (Retirement Plans Associate, by same people who do CEBS). I'm currently involved with DC employee/participant education (nearly all 401k), and would like to move into relationship management. Any thoughts on which of the above, or any other designation, would be most valuable in both preparing me for a relationship management role and in giving me credibility in a job search?