(previouisly had posted this in the wrong category)

Lets say Joe is over age 21 and is 100% owner of a building. Joe and his father decide to use the building to make widgets. Joe and his father form an s-corp with Joe a 51% owner and Father a 41% owner for their widget business. The widget business pays rent to Joe for use of his building. Joe incorporates as a 100% owner of a business that recieves rental income. Joe makes his father an employee of his rental income business, they both receive w-2 income from the rental income business. Joe wants to start a pension plan for his rental income business which cover him and his father (the only employees).

Is there any rule or reason the pension plan would have to also cover employees of the widget business?

Lets say Joe is over age 21 and is 100% owner of a building. Joe and his father decide to use the building to make widgets. Joe and his father form an s-corp with Joe a 51% owner and Father a 41% owner for their widget business. The widget business pays rent to Joe for use of his building. Joe incorporates as a 100% owner of a business that recieves rental income. Joe makes his father an employee of his rental income business, they both receive w-2 income from the rental income business. Joe wants to start a pension plan for his rental income business which cover him and his father (the only employees).

Is there any rule or reason the pension plan would have to also cover employees of the widget business?

Are SEP IRAs subject to the 20% mandatory tax withholding, as in 401(k) plans? It's my understanding that because these are IRAs, a participant could withdraw the employer contributions from the account (payable to the participant), and direct that no federal taxes be withheld. This distribution of course would be taxable to the participant.

Am I understanding this correctly? Thanks for your help!

I'm sure this has been brought up before, but what is the normal procedure for handling a loss on a forfeiture account after plan year end and the plan doc says to reallocate forfeitures? Should I process an asset based charge (as a loss) to all participants for the following plan year?

Are there any attribution rules for the determination of whether the benefits for a family member who is also an employee will be discriminatory?

We are to the point in a major plan termination that we have exhausted all possible means to locate 6 remaining participants and are ready to escheat their money to the state of their last known address. Just wondering if anyone has actually done this and how they found the process to be. I understand it could be different depending on the state. Also, how would the 1099-R be handled?

Just want to make sure I understand the proper coding for distributions due to a failed ADP/ACP test. If the distribution is taxable in 2003 do I use 2P and if taxable in 2004 do I use 28? Also when reporting a defaulted loan do I shown 1L if the participant is under age 59 1/2? Thanks.

its not the greatest copy, but the object is to identify the songs

the example given is OCAYF which of course you realize immediately (yeh, right) as

O

Come

All

Ye

Faithful

good luck, Merry Christmas and give some people a chance to solve before posting the answers!

I am on the board of a nonprofit organization, and we have spoken with a company about the possibility of having any unused FSA funds at plan year-end be given to us by the company. I know other companies do something like this with leftover funds, so I assume this is ok. The question I am trying to answer, however, is this: can employees

intentionally overfund their FSAs, knowing that any unused funds will come to my organization at the end of the plan year? This would allow them, in effect, to make a gift to us on a pretax basis.

Of course, the employee(s) would not receive a tax receipt from us (though the company, as the donor, would). And the company would not be legally bound to make the gift to us at year-end, though the employee would have a reasonable expectation that this would occur.

I wonder, has anyone ever heard of such a thing happening before? Do you think the IRS would frown on such a practice?

can someone withdraw from a 401k to buy a house as a first time home buyer. please define first time home buyer.

One that I liked was the comment predicting the end of tandem/pour-back arrangements between 401(k) and NQDC plans. "They're close to being dead if not dead", was one comment I think. (The scenario discussed was a NQDC that pours deferrals into a 401(k) after year-end to max. allowable limits, then a similar dovetail comment was made about arrangements that work in reverse - k to the max, then to NQ.) "Employers are likely to de-couple these arrangement in the future to comply with 409A" was another afterthought.

Seems to me if this is simply a matter of the timing rule, there are other fixes. I guess we'll see if this position is re-thought as guidance matures in '05.

Would anyone be willing to provide a sample notice for a 401(k) safe harbor? I'm talking about the participant notice that gets distributed at least 30 days (but no more than 90 days) before the beginning of a plan year.

The plan satisfies the provisions of I.R.C. Sec. 416(g)(4)(H) and, therefore, isn't subject to top-heavy testing. Each year, the plan makes a 3% QNEC contribution for every NHCE.

I'm trying to same time and avoid "reinventing the wheel" by having to draft the language myself. Any help will be much appreciated.

I made a Simple Roth IRA on the last day in 2003. I transfer money into the roth from a simple IRA to make my Roth IRA. Then on 1/27 of 2004 I recharactize some of that amount back to my traditional IRA. I reported both conversions and the recharactization on my 2003 taxes. This year was a bad income year for me so can I transfer some of the money back to the Roth to increase my 2004

income. If so, do I have to do that before the end of 2004 or can I wait

until before the 2004 tax filing date of April 15th of 2OO5.

Thank you,

Since I am beginning my first such valuations I would like to verify a couple of points.

1. OBRA '87 FFL no longer exists.

2. RPA '94 FFL 412 now uses a rate tied to corporate bond rates per PFEA. For eg. for PYB 1/1/2004 the rate used can be from 90 to 100% of 6.55%

3. RPA '94 Unfunded CL 404 - you can use either the rate in 2. above or the old rate based on the 30-year treasury which is from 90 to 105% of 5.25%.

Am I correct?

Thanks.

Also, if the funding rate is in the prescribed range, must that be the rate used for RPA '94 CL or can you just use any rate in that range? And if the rate is just above the range must you use the highest rate in the range or any rate in the range?

Thanks much.

If an employee submits a claim to the HRA in 2004 that exceeds his HRA balance, can the HRA pay the balance and pay the remainder of the claim in 2005 when additional benefits accrue?

Say a cash balance plan does not meet the safe harbor standards that entitles the plan to pay the lump sum as the account balance, thus the lump sum must be at least as great as the present value of the accrued benefit.

SO for eg. the situation results in a whipsaw based on projecting the account at 7.5% and a 417(e) rate of 5.5%.

The plan provides payment of the account balance upon pre-ret death to the beneficiary.

Does the present value of the accrued benefit have to take into account pre-retirement mortality when discounting the NRA lump sum to current age or should it just be discounted using interest only? We'll assume that the plan is silent on this present value calculation matter.

Thanks and look forward to various other views and interpretations.

A client has asked me to take a look at it. It's pretty complicated so I was wondering if anyone here has heard of it.

My understanding is that 411 allows NRA to be 65 & 5 at the latest. And that that date applies to 100% vesting.

So for eg. a plan can choose a NRA at say 69 & 5, but would require 100% vesting at 65 & 5.

Say the NRB is 100% of compensation, subject to 415 and non discrimination in favor of HCE's

And say the accrued benefit is pro-rated on plan participation and say a person participates at age 54, and receives compensation of $75,000 every year in the plan. Then after one year according to the plan his accrued benefit would be 1/15 of $75,000 or $5,000 per year.

It would thus follow that at age 65 this person's accrued benefit would be 11/15 of $75,000 or $55,000. If this amount is 100% vested, its it an acceptable accrued benefit? i.e. is it also necessary that the full 100% of pay or $75,000 be accrued at 65?

Thanks.

Loans cannot be repaid in a balloon repayment insteady of being amortized and not less than quarterly- true.

But what about the following scenario.

Participant borrowed $10,000.

Wants to repay loan in one lump-sum payment at the first quarter ( within 90-days) according to amortization schedule.

Is there anything that says a loan cannot be less than for a certain period?

I could not find anything in the code that would suggest that this is wrong.

Any help is greatly appreciated.

Thanks

Jane

I know that one of my TPA clients has a land investment in his DB plan (a restaurant franchise, actually), but one of my full service clients asked if he was allowed to put land in his DB. I told him that I thought he could, but there were some special rules on the valuation, bond coverage, etc. When I went to look that up in the ERISA Outline Book, it appears that land is not allowed in a Pension Plan. Am I understanding correctly?

Any help is appreciated! Thanks!