What is the 2005 maximum contribution (employee and employer combined) for a 457(b) governmental plan?

Can a Rabbi Trust created to hold 415(m) assets be invested under the same investment contracts (and in accordance with the investment choices) of the qualified government plans in order to leverage better costs and investment choices? The trusts are separate and will not be co-mingled.

Does anyone have any guidance on whether a Rabbi Trust estabished as part of a 415(m) plan can be invested in accordance with the same investment contract as qualified government plan assets to obtain better investment choices and investment rates? We are not going to combine the plan assets. They are separate trusts.

We have a participate who, as the story goes, left his wife and moved to another country, leaving her with no money or support. The judge issued temporary orders giving her the ability to "liquidate" his account balance in our 401(k) Plan. I informed her that we could not distribute his account without a QDRO, which I assumed could not be issued until the divorce was final.

However, I did receive a proposed QDRO from her attorney that is based on the temporary orders that were issued. My question is - Is a QDRO that is issued prior to the final decree valid and are we obligated to comply with it? Since our participant has disappeared, he is not being represented in this matter and therefore, will not have any say in the division of the property.

When are deferrals on a tax exempt organization's 457(b) deferrals held in a Rabbi Trust due? When deferred or when distributed?

I have a p/s plan that has not made a contribution since 2000. Again, he is not making one for 2004, which will be the fourth year in a row with no contribution. I could swear that there is a lenth of time (ie # of years) that can go by with out a contribution, but I am having a difficult time trying to find an answer. With Sal's book in my lap, I have some regs I am looking for - Treas. Reg. Section 1.401-1(b)(2) and IRC Section 411(d)(3) - but I can't seem to find them of the web.

Any thoughts? Thanks!

Anyone know where I can get a copy of the guide, handbook, or any other tools that IRS agents use to conduct their plan audits?

I have 3 DB plans in a controlled group that merge mid-year ( i.e. it's not a business purchase situation).

For FASB 87 purposes would you just take the results of 3 separate developments of NPPC and Disclosure items and then just combine like-kind items ?

Or is there special treatment of certain items ( e.g. unrecognized gains and losses) ?

Also, if one of the plans experienced a large settlement before the merger, would this have an impact on the accounting ?

It seems too simple to just add together similar items .

Participant is US resident. No spouse. Family lives out of country. Can she name one of them a beneficiary?

Plan allows hardships for any of the four reasons.

A participant needed a hardship to prevent a foreclosure, and provided the necessary back-up.

Due to time constraints on receiving the dollars, she borrowed the exact amount from her father, and now wants the hardship to be able to pay her father back.

On November 30th, she had a valid hardship reason. On January 4, 2005 she has no foreclsure issue, therefore, no valid hardship reason.

Should the hardship request be disallowed?

Thanks.

There are a number of places where the 403(b) rules say to follow those for 401(k)s. Therefore, I have scanned the final 401(k) regs to see if any of the provisions may apply to 403(b)s. The only instance I can find is the expanded definition of hardships to include funeral expenses and expenses to repair damaged homes.

Did you see anything else?

I have a situation where the ESOP only owns a portion of the S-Corp. As time goes on and distributions to the shareholders (including the ESOP) are made, I won't be able to maintain the "primarily invested in employer securities test." Would I be able to make a cash distribution to all participants of their share of the earnings? Maybe through an In-service withdrawal? Would it be subject to 72(t)?

My friend had net earned income from self-employment only for the years 1992 through 1995. He established a single participant Keogh MPPP in 1992 and made contributions for the years 1992 through 1995, deducting the amounts contributed.

He had no earned income, and no further contributions were made, for years after 1995. All contributions were invested in mutual funds. He moved cross country in 1998. By the end of 1999, the assets had grown in value to over $100,000. Because he had not made contributions for over four years, his records were in disarray from the move, and because he had never previously filed Form 5500-EZ, he did not realize the Form had to be filed beginning in 1999.

He is now nearly 69 years of age and recently began examining his retirement accounts in preparation for taking Minimum Required Distributions and also for estate planning. It was not until the past few weeks that he learned he had to file Forms 5500-EZ for the years 1999 on. He is preparing late returns for filing and will request that penalties be waived based on reasonable cause. (As a Form 5500-EZ filer, he is not eligible to participate in the DFVC Program which substantially reduces penalties.)

Only question so far is: 1. Does this qualify for a TSL (tear stained letter)?

In preparing the Forms 5500-EZ discussed above, examination of his records revealed that his Keogh contributions exceeded the allowable amounts for the years 1992 through 1994 by a total of $2,410. The 10% excise tax applies only for the year 1995 because, for all prior years, the cumulative excess contributions are not more than 6% of his compensation for the year. For 1995, the cumulative excess contributions are $740 more than 6% of his compensation, so he will be paying $74 to the United States Treasury, and filing Forms 5330 for the years 1992 through 1995, as well as Forms 1040X for the years 1992 through 1994.

He will be withdrawing all the excess contributions and earnings thereon this year and will reflect those amounts in income on his Form 1040 tax return for 2005.

Additional questions are:

2. For what years are the earnings on the excess contributions reported? Every year beginning in 1992 on a 1040X? Only on his Form 1040 tax return for 2005? Something in between?

3. He never made GUST amendments. What does he need to do about that?

4. As soon as everything discussed above is resolved, he intends to rollover all the Keogh assets to an IRA, thereby terminating the Keogh. He'll file a final Form 5500. Are there any other Forms that must be filed? Forms 5310 and/or 8717?

This bulletin board is such a fabulous resource. Thank you for any help you can provide.

We have a client that allows the employee's portion of their health care premium to be withheld pre-tax via a 125 plan. An employee wants to drop his health care coverage, thus discontinuing his pre-tax premium. Can the employee drop the coverage prior to the end of the 125 plan year end without jeopardizing the favorable tax status of the plan?

I appologize if this has been asked before. Regarding the Automatic Rollover Regulations, an arrangement has to be worked out by each QP with an IRA vendor who is willing to accept th Automatic Rollover.

Anyone have a list of vendors doing this? What are other people out there doing?

Thanks.

We have a client whose 2001 Pension Plan Return is under examination.

Two plans, MP and PS.

Two accounts for each plan.

Two doctors, one term vest doctor and one common law employee.

For 2001, max comp was $170,000, max contribution $35000.

The two doctors made $14,000 contributions to the MP, $21,000 to the PS, each.

The auditor wants to declare a funding deficiency for the MP because he says the plan is $3,000 deficient for each doctor.

Quite simply, the doctors contributed the $3,000 in error to the PS plan.

I can understand making the transfer to the MP plan, but not the $3,000 "deficiency" and payment of any excise tax.

Anyone have any similar experience with an audit like this?

Thanks,

Steve

I've been unable to find guidance on the deferral of bonuses paid in multi-year arrangements. I seem to remember the topic being addressed in one of the conference calls, but can't find it in any of the printed material. Has there been guidance issued, or can we anticipate in in the mid-year regs?

Thanks, Joe

I know there have been some changes to deferred comp plans this year, but I thought it went into effect next year...

My spouse works for a foriegn company here in the US. There is a deferred comp plan for management in addition to the 401k they sponsor. My spouse has deferred his bonus to the deferred comp plan for 3 years, and is 100% vested in the first 2 years of contributions.

In December a mysterious entry showed up on his pay stub indicating that about 1/3 of what he is vested in (in the deferred comp plan) is taxable income!!!!

Does this sound right???

What about withholding? It is enough to possibly cause us to be under withheld.

Where can I get some easy to read info on this?

Thanks!

Are Stock Options (CALLs and PUTs) buying and selling permitted in a Roth account? If not, why not? Thanks, GeneJ

What restrictions can we place on limiting predecesssor service credit to existing employees in an acquired company.... If we hire an employee who previously worked for and then (in 2003) terminiated employment with the recently acquired company, is the newly hired employee eligible for prior service credit?