Does the IRS have to be notified whether an individual took RMDs during the year or just that RMDs were required to be made during the year?

The plan uses an "hour bank" to determine

eligibility for coverage. (160 hours of service

buys one month of coverage.)

A plan participant is returning to work after a 15

month deployment. When he left, his dollar

bank was frozen. Upon his return, coverage will

commence immediately with no waiting periods.

Here is the catch...since the member has transitional

TRICARE for the next 6 months, he does not want

the plan to recommence his coverage right away.

By using the government plan, he could build up

several months of surplus coverage hours in his

hour bank.

The regs don't seem to address this. My inclination

is to resume coverage immediately and coordinate

with TRICARE.

Any thoughts?

A Sub-S Corporation sponsors a cafeteria plan. The 100% owner and his spouse do not participate. There are two additional HCE's who have 0% ownership. When performing the first part of the ratio percentage test for eligibility, is the ratio percentage for the HCE's 100% because all of the HCE's (including the owners) are nonexcludable or is the ratio percentage 50% because the owners are precluded from participation due to Sub-S status?

Looking for info regarding RASD's. Any suggestions?

Does anyone know of a report that splits the total employer contribution into safe harbor and Profit sharing totals? We have a report that shows the amount by source by fund, but we are looking for a total safe harbor and total PS listed by employee.

Any help would be appreciated.

Carson

I'm specifically looking for Rev Proc 94-41. Thanks.

Can you convert a Roth IRA to the new Retirement Savings Account (RSA) or Lifetime Savings Account (LSA)? If so, how would it be done and would there be any drawbacks to doing so?

Suppose I have been building up a Roth IRA for several years. When I started the Roth I was single and my modified adjusted gross income (MAGI) was $50,000 a year. Thus, I was elegible to start a Roth. However, my new MAGI is now $120,000. According to Roth IRA rules I can no longer make contributions to a Roth IRA. My question is, then, what happens to the money that I built up in the Roth? Do I have to take it out or can I leave it in the Roth to continue to grow? And if my MAGI lowers back down below $110,000 can I go back to making contributions into that Roth?

I have a plan that has six partners; 5 individuals and 1 corporation. The tax return is pretty well prepared except for the profit sharing plan deduction. The individual partners all receive guaranteed payments that qualify as SE income. These payments are not in the same ratio as the partners income and loss percentages. I tried putting them in the Outside W-2 Income field in census which did cause Relius to include them in the partners eligible compensation, but it did not include them in the calculation of SE tax. Has anyone else delt with this?

Also, on the HCE/Ownership percent tab in census I can enter a partners income ration and pension cost ration. On this plan I calculated SE income prior to SE tax and retirement contribuiton and then calculated each partners relative share of that SE income. I entered that income in Relius (it did not include the portion of income allocated to the corporate partner and not subject to SE tax). This seemed to work great. Next I entered a pension cost ration that did eaqual each partners profit/loss ration per the partnership agreement. These ratios did not add up to 100% as the corporate partner will be allocated a portion of the rank & file pension costs as well. When processing the plan Relius allocated the entire rank & file penson cost to the 5 individual shareholders. Thus 100% of the rank & file cost were allocated to the 5 individuals even though their pension cost ration did not add up to 100%. Is there any way to get Relius to only allocate the percent of rank & file cost that is enterd in the pension cost ration in census?

A company has been dissolved and no one is left to sign on the final 5500 for their 401(k) which has been fully paid out to participants. It is quite possible there may be no way to come up with good census data for testing. What now?

i have a new client and an esop that is approx 8million

unleveraged, and an s corp.

approx 50pct is in stock, and other 50pct in equities

can the employer purchase a building with part of the available cash?

thanks so much for a quick response

sincerely

lw

When a plan terminates and distributes benefits, do the distributions constitute mandatory distributions that are subject to auto rollovers to IRAs?

I'm reading an SPD that says the plan intends qualify under 404©. The paragraph is very brief. It simply says that participants are responsible to make their own investment choices and that the plan fiduciaries are not responsible for any losses that might occur.

Most of the SPDs I read go into much more detail about what 404© means.

Is there any specific language that is required to be provided relating to 404©?

The Corbel VS plan we have is silent on whether an ADP test can be corrected via a combination of a QNEC and refunds. It would seem to me that since the document does not say that one method precludes use of the other, I am thinking a small QNEC could be made that would reduce the refunds almost 75%.

Does anyone else use this method?

Thanks

Lori

As an employer, in the hospitality industry, how are you handling the 2% HMO tax which was recently enacted into law? Are you:

1-passing the cost onto the employee 100%

2-splitting the 2% via on the company contribution level

3-as the employer, absorbing the 2% until the renewal period

4-Other??SUCH AS???

I have been presented with a 419 welfare benefit plan.

The benefit is only a life insurance policy.

419 says that the employer can deduct the "cost of insurance" and the remaining cost for the premium is considered W-2 income to the participant.

The policy is a life insurance policy with a cash value build-up and a guaranteed interest rate of 2% and a higher assumed interest rate (say 6%) in the illustration

The actuary must determine the level premium cost of insurance and has the authority to make this calculation using assumptions he deems reasonable.

Some of the materials out there on this type of plan indicate that it is expected that 75% of the premium would constitute the cost of insurance. However, based on my calculations it would require close to a 2% interest assumption and an available mortality table to me (namely IAM83).

My question does anyone have an opinion (and reason for it) as to what are appropriate assumptions regarding interest and mortality for such an analysis?

Thanks.

In the MPP document that I am reviewing, the normal form of benefit payment from is a monthly qualified joint and survivor annuity. If a terminated vested participant is being reported on Schedule SSA (account balance greater than $5,000 and has not made an election with the plan administrator), is it OK to enter the vested account balance and indicate that it is a single sum (Code A) and the payment frequency would be lump sum (Code A), or am I required to report the vested account balance in the form of a QJSA (Code G) and the payment frequency would be monthly (Code E)?

The Schedule SSA seems to be looking for an account balance for defined contribution plans.

Thanks for any assistance on this.

I inherited my mother's 401(K). She died in 2004, but I have not recieved the proceeds yet. I will receive them sometime in 2005. For which year will I receive a 1099R and have to pay income tax on the amount? 2004 when I inherited it, or 2005 when the funds are actually disbursed to me.

Also, is there any way to defer or avoid paying income tax on the distribution? It seems that had it been an IRA, I could recieve distributions over a period of years, however, I don't see anything to indicate I can do this for a 401(k) distribution.

Section 72(t) permits a modification to SEPPs prior to the later of 59-1/2 or 5 years for reason of death or disability.

If a participant takes a distribution on account of disability, do SEPPs continue? If they continue, do they continue at the same amount as before the disability distribution (assuming that the SEPP was based on the amoritization or annuitization method)?

Or, should SEPPS be discontinued?

Or?

The following 1.401(a)(4)-4(b)(2)© gives an automatic pass of the benefits, rights, and features test for mandatory cash outs:

"In the case of a plan that provides for mandatory cash-outs of all terminated employees who have a vested accrued benefit with an actuarial present value less than or equal to a specified dollar amount (not to exceed the cash- out limit in effect under Sec. 1.411(a)- 11©(3)(ii)) as permitted by sections 411(a)(11) and 417(e), the implicit condition on any benefit, right, or feature (other than the mandatory cash-out) that requires the employee to have a vested accrued benefit with an actuarial present value in excess of the specified dollar amount is disregarded in determining the employees to whom the benefit, right, or feature is currently available."

The above can be read not to give an automatic pass where optional forms of benefit other than a lump sum are unavailable to employees whose accounts or benefits are $5,000 or less and more than $1,000 and are not subject to mandatory cash out (because the cash out limit has been lowered to $1,000).

Any thoughts?