We have an owner who would like to establish a profit sharing plan for his employees, but may not always want to contribute for the HCE's (Mainly himself and other family co-owners) Can he do this? Can he do this, but then later decide he does want to include the HCE's? Say..... years 1 and 2 are not so profitable and he only wants to contribute for the NHCE, but then year 3 is great and he wants to contribute for the HCE's too??

Thanks - Mike

I have a client who would like to establish a defined benefit plan to provide their maid (63 years old, retiring in five years) with an annual benefit between $15,000 and $20,000. I seem to remember seeing something that allows a householder to sponsor a plan for domestic help, but I haven't been able to find anything on point. Does anyone have any advice?

What year did they go from a four year look back to a one year look back for the top heavy test?

I have a x-tested plan, and the NHCE's need to receive 5% for the gateway, which in this circumstance, will pass all testing...however, there is also an Non-elective 3% Safe Harbor Contribution, can that 3% be used towards the 5% gateway??

Or do the NHCE's need to receive the 3% SH and an additional 5% Profit Sharing?

I believe that if you are passing your ADP test but failing the ACP by a slight

margin you can reclassify deferral contributions not needed by the ADP test as matching contributions in order to pass the test.

I also think that to do this you must pass the ADP test before and

after the move, and it is just a "paper" move.

My question is if the plan fails ADP but no refunds are required due to

reclassifying deferrals as catch-ups, does this mean that you can't use

deferrals to satisfy ACP?

Is there any IRS rule, or language in a plan document that states how to handle when a suspension period is about to end - meaning, if a participant was actively contributing prior to the dist., is it an automatic to start taking deductions again without notifying the participant?

I know that if participants want to stop participating, they must submit a form stating they want to cease contributing. For a hardship, no form was signed by the participant.

I know it's better to just notify the participant in advance, but does any law require this?

Thanks in advance!

Do we need to prepare the 1099R for the participant whose distribution includes his post tax contributions only and not any pre tax contributions?

I hope someone can help me. I opened a roth ira in 01. I am only 22. I contributed a total of $4000.00, this year I withdrew it early and recieved $3932.00. Am I going to get any penalties or taxes for this since I received less than I contributed?

Thanks for any help

Gemski

I currently contribute to my 401k through my employer. I also have an self- directed IRA that I no longer contribute to. The only reason I opened the IRA is due to changing jobs 3 years ago and I had to move the money out of the previous employers 401k plan. So,I rolled it over into an IRA. I have to pay a fee of $40 each year to keep the IRA which I think is absurd to have to keep paying since I don't even contribute to this at all. My IRA is only about $900. This is money that is just sitting there & that I believe would better benefit if combined into my 401k.

I have been told that I can actually transfer the IRA to my 401k. Does anyone know if this can be done? Or have any further knowledge on how to handle this type of situation? All information that I find anywhere is mainly about rolling over 401k to IRA- and nothing really regarding moving IRA to 401k plan.

Thanks for your help!

I am an H1 holder and have been working in USA for nearly 2 years. Since my boss did not provide 401k for me, my friend suggested me to open an ROTH IRA instead of just put all my salary in the bank. But I did not decide yet because I still have doubts. I have some questions to ask, hope someone who are familiar with

ROTH IRA in this forum could help me, thanks a lot.

1. If I open an ROTH IRA now and begin to put money in it, if I leave USA a few years later and do not come back USA again, could I get the money back? Can I authorized someone else to fetch the money for me? Is there any other convenient way I can use to fetch the money?

2. If I have a ROTH IRA for a few years, and after that I do not work in USA any longer, could I keep on put money in ROTH IRA each year when I am abroad? And could I fetch them after I am 60?

We (TPA) have been asked to comment on a request to honor a distribution form being signed by a court appointed 'commissioner' acting as the participant. The participant is a terminated employee of our client. The court has appointed a commissioner under "Rule 70". Our state has adopted the same language as in the Federal Rule 70. The plan document does not address this specifically in definitions or elsewhere. Counsel will be contacted, of course, but I am interested if there is any experience to be shared here.

In negotiating a executive's employment agreement on behalf of an employer recently, the executive's attorney requested that the employer agree to INDEMNIFY the executive, in the event that the employment and nonqualified deferred comp. agreement turned out NOT to comply with 409A, and therefore resulted, in the future, in tax liability as a result of income inclusion.

We said no, and it was left at that.

But I'm wondering if anyone else has thought about this.

Since 409A puts the whole burden of a failed 409A-subject plan on the employee, it seems that the employer has no interest in agreeing to indemnify any employees. The employer's interest is just to draft the plan properly. But I suppose, in theory, indemnification is permissible, if both parties are willing.

Any thoughts?

Can someone point me in the right direction?? I have a situation involving uncashed refund checks. For example, a COBRA participant is allowed an extended grace period to make up a payment that's short by an insignificant amount. The remaining balance is not paid and we've sent a refund of the portion that was paid.

What happens when these checks are not cashed? Do ERISA's plan assets rules continue to apply? Do state escheatment and unclaimed property rules apply?

We have 4 DB Plans contained within a Master Trust. In the annual census submission, I realized that we set up a participant who retired 8/1/03 incorrectly on our bank's system, and he has been paid out of the wrong plan since he retired. I know we need to transfer the assets and calculate earnings/losses associated with those assets. Do we need to do any DOL or IRS filings?

I am getting mixed messages from TPA's. I thought that a 3% safe harbor plan that ns NO other contributions ( or forfeitures ) from the employer is EXEMPT from the top heavy rules that year. Is this correct ?

THis means that an employee entering a calandar year plan on 7/1/04 for example only gets the safe harbor 3% on comp from 7/1/04 to 12/31/04. They do NOT get a top heavy allocation for the whole year comp since the plan is exempt. Is this correct ?

If the plan in some future year has a profit sharing allocation OR a forfeiture ( that is allocated like a profit sharing allocation ) then is not exempt that year and the 3% top heavy on the WHOLE year must be contributed for a person that enters on July 1st - correct ?

The retroactive annuity regulations were effective July 16, 2003 and apply to plan years beginning on or after January 1, 2004. Under the proposed and final regulations, a retroactive annuity starting date may be used only if the plan provides for it. Under Notice 2004-84, released 12/14/04, plan provisions relating to a retroactive annuity starting date are designated as disqualifying provisions and plan sponsors may adopt retroactive annuity starting date amendments in the 2005 plan year. Does this mean that a plan may use the retroactive annuity starting date provision without a plan provision and then retroactively amend the plan back to the date that the provision was first put into effect?

With respect to 409A, what is the consensus out-there in NQ Land as to remedying mistakes?

Specifically: what if a distribution is made in error and a check/assets must then be redeposited.... what would be the repercussions under 409A?

Would the erroneous distribution be taxable? Would the plan be in jeopardy?

I think the IRS touched on this is their Q&A guidance, but I didn't focus in on the answer as I should've

A KSOP PROVIDES FOR THE INVESTMENT OF MATCHING AND SALARY DEFERRAL CONTRIBUTIONS IN EMPLOYER STOCK, SUBJECT TO THE DIVERSIFICATION REQUIREMENT. CAN THE PLAN BE AMENDED TO REDUCE THE DIVERSIFICATION AGE TO AGE 45 WITH NO SERVICE AND/OR TO PERMIT PARTICIPANTS EVERY THREE OR FIVE YEARS TO HAVE AN OPEN WINDOW TO SELL EMPLOYER STOCK AND DIVERISFY? tHE ONLY CONCERN I CAN THINK OF IS THAT WE NEED TO MAKE SURE A "SUBSTANTIAL" AMOUNT ALWAYS REMAINS IN EMPLOYER STOCK.

ANY COMMENTS?

I am preparin a 5500 for the first time. It was done by an accountant who has made mistakes on it and stirred up inquiry letters from the DOL.

1. This is a defined contribution protype plan,There was changed in the plan due to the tax law in 2003. Is there a place on the return that indicates a date for amendmants?

2. The plan has its assets in a brokerage house and a bank. It contains mutual funds and CD's. Page 2 line 9 a3 ( plan funding arrangement)indicates trust and line 9a could be checked as general assets of the sponseer . I am not sure which box to check . the same is true for line 9b plan benefit arrangement. In the past schedule I was not included. I believe it should be included. It is a small plan.

3.The plan has two trustees. Can 2 schedule p's be filed out. In the past only 1 form was filed.

4.I am filling out a ScheduleA . The pension plans pay an administration fee of 25 a year to a life insurance company. Does this need to be lised in part 1? It is not a commission.

5.. On schedule A the contract number was wrong in prior years. Should I correct it or leave it.

Thanks for your help....

For 2004, my only income is interest and dividends, and these are not eligible compensation as defined by the irs.

my question is, can i still rollover my traditional IRA to a ROTH IRA?

since i have no eligible compensation for 2004, could it possiblely result in a failed conversion?

or is it better for me to not mess with the conversion and just withdraw from my traditional IRA and take the 10% penalty?

thank you