We have a client that provides a 100% vested match. Both ADP and ACP are run current year. Preliminary ADP testing failing but ACP passes. We would like to consider part of the match a QMAC and include in ADP test. Can this be done retro to 01/01/04 if no hardhsips or in-service payments have been made from the match account even though the document(which can be ammended) stipluates that the matching contributions are not qualified.

Plan maintained old requirement for actives > 70 1/2. Distribution of the accrued benefit (AB) began on 4/1 following 70 1/2. This benefit was payable as a life annuity. Each 1/1 update AB. While active the participant has pre-retirement survivor coverage. Once participant actually retires, plan provides makes elections on late retirement date (LRD).

Did the old regulation require or was it an option that the benefit calculated at LRD be offset by the actuarial value of any payments previously made to the participant as a required minimum distribution?

Participant retired 7/1/04. He is still receiving his AB (updated to 1/1/04) as of now.

Plan does not provide for retroactive annuity starting date.

Retiree needs to make election on form of benefit payment.

Propose: Recalculate benefit at LRD and determine value of optional forms of this benefit on 1/1/05. For lump sum option, use interest rates applicable on 1/1/05. Make payments for 6 months (7/04 through 12/04) for additional AB accrued from 1/1/04 to 7/1/04. Begin payments on 1/1/05 in accordance with option elected or pay lump sum.

Is this proposal acceptable?

I am not sure whether to select stocks or mutual funds for my roth IRA. I read some previous threads regarding stocks that over time, the Ups would be greater than the downs for the stocks. In that case, should I invest a larger portion of my money into stocks ? Mutual funds seems to be more stable and less risky while the returns are not as high. I am currently 24 so will it be better to invest in the stocks because I can take the risk now ?

-hustler98

401(k) Plan requires only 3 months of service for entry. Plan has one HCE & several NHCEs not meeting statutory age & service minimums. We want to exlude the otherwise excludible NHCEs. How do I get Relius to do that? When I test the "otherwise excludibles" seperately Relius puts the one HCE in the "otherwise exlcludible" test. Obviously, when I include the "otherwise excludibles", I get not only the HCE, but all the NHCEs as well.

Thanks in advance for any guidance.

DOL regulations make it clear that, if a MEWA is created for a temporary period due to a change in control of a business, Form M-1 is not required. The temporary period is limited to the plan year of the change in control and the immediately following plan year. What I infer (correctly or not) from this provision is that the DOL is not concerned with the situation where a MEWA is created for a short time due to a corporate transaction, provided the MEWA "goes away" within the period stated in the regulation. 29 CFR 2520.101-2©(2)(ii)(B).

Does anyone have any experience with DOL on this "temporary MEWA" issue? Also, does anyone have any experience with any state regulators on this type of situation?

I am taking a Business Law class that is studying the First Central Bank Case, which is one of the Harvard Business Cases.

This is about unions and the rights of the employees to pursue and what employers can and cannot do...

Any good tips on websites to check out about this topic? Labor Law essentially, but I am looking for more than just the law itself, but some good sites that will be more "user-friendly"...

Thank you

The IRS has issued 3 PLRs allowing Non-Qualified Annuity Stretch-Outs. None of these involve trusts. Is it too much of a leap to apply the IRA Trust Separate Share rules to NQ Annuities, as well. In other words, annuity in a Revocable trust; annuitant dies; trust becomes irrevocable. It would seem we could do a stretch over oldest bene's life expectancy. Any thoughts? I try my best to discourage clients from putting their Annuities in a trust, or making a trust the bene, however sometimes it does seem to fit. Other times they don't listen. Al

Hello,

My company (a private university) has a 3-year cliff vesting, or as I was told 2 years and 1000 hours of service to be exact. I plan to terminate my employment after only 2 years and 2 months of service, and thus my 403(b) will be annulled and I will lose the money the university invested so far into my account. I'm looking to options to avoid this and was wondering if you could give me some advice on negotiation with the university. Do you think I have a chance to keep the account? If I'll be working part-time after I leave, would this keep my work history rolling and can I reach 2-year-1000-hours requirement then? Anything else I can do/tell to convince them to vest my account only after 2years and 2 months?

Overall, I'm leaving this job on very good terms and in fact has just been promoted. Do you think my manager can play a role in the discussions with HR?

thanks all in advance

I am looking for good articles on the trend of larger employers freezing or terminating defined benefit plans and replacing with across the board employer contribution to an existing 401(k) plan. Thanks for your help

An employer wants to go to a higher deductible health plan and make non-elective employer contributions on behalf of each FSA participant to offset the higher deductible for the employee. Contributions will all be the same for each employee, a specific dollar amount. Are there any regulations that prohibit this or any pitfalls to watch for?

Wisln

A plan sponsor offers its employees the option to participate in multiple group health plans. Can its COBRA notices apply to all the group health plans? Of course we will specifically identify the plans. For example, can one general COBRA notice be used for the health and dental plans, the vision plan, the FSA, and the EAP? We simply want to minimize the number of forms that employees receive. Thanks in advance for any suggestions.

Does anyone know of a compilation or source showing the best performing Mutual Funds which are popular in the 403(b) arena?

Section 409A now requires that participants in bonus deferral ararngements make an election to defer their bonus at least six months prior to the end of the applicable performance period. Most commentators are expecting Treasury to provide an exception for 2004 bonus payments paid out in 2005 because 409A was enacted into law so late in the year. Has anyone heard anything more specific?

Two questions about 401(k) Catch-up Contributions and cross-testing.

#1: Assuming there are no problems with passing the ADP, for the various crosstest cacluatlions I undertake, I can ignore all catch-up contributions. Correct?

#2: This question assumes the answer to #1 is that I can ignore the catch-up contributions. But what if the ADP test fails? For example, Participant A deferred $14,500. For the initial ADP test, I assumed deferrals of $13,000 and $1,500 of catch-up. My ADP correction calcs results in a refund of $3,300 for a net 401(k) contribution of $11,200, $3,000 of which deferrals were reclassified as catchup contributions.

When I run the crosstest, do I include only $8,200 in deferrals ($11,200 minus $3,000)? Or do I assume $11,200?

Thanks.

Due to a few mess ups, I have over-contributed to my Roth IRA, and not by a tiny bit. Instead of 3000 for 2004, I have put in 5000. 3000 is my legal limit. What can I do now?

A few logistical issues that I am curious as to how other small plan practitioners cope with.

1. 412©(8) - A client is preparing to file their corporate tax return say 8 months after the fiscal (and plan) year. They want to amend pension to meet their goals. How are people handling this? Of course you can't retroactively reduce benefits accrued prior to the date of adoption of an amendment (in addition to proper 204(h) notification, if applicable).

2. Employer wants to convert DBPP to say MPPP as opposed to DBPP termination and MPPP implementation. It appears that a such an amendment may be reasonable assuming all accrued benefits and payment options associated with such accrued benefits are 411(d)(6) protected. And then perhaps continued 5500 filing but now based on MPPP. Any practical thoughts on this?

3. MPPP to DBPP perhaps same as 2. above, but now the Schedule B discloses plan amendment details.

4. Traditional DBPP to 412(i) DBPP. It seems that the 412(i) plan must use insurance products that can fund up to the 415 offset by the estimated benefit funded from the traditional plan's trust assets.

Curious to hear some practical feedback if anyone has such to share.

Thanks.

Gary

Client is amending a profit-sharing 401(k) plan for cross tested allocations. He has some money burning a hole in his pocket, so wants to make a contribution before year end.

I've told him that we need an allocation letter before the money goes into the trust, and that he should wait. This isn't sitting well with him.

Any reason not to draft an allocation letter saying "This $XXX is to be allocated to the Partners on a salary ratio"? Later, we'll allocate money to the rank and file, and perhaps more to the partners as well.

If not can you direct me to a cite or reg that supports this?

Thanks

Why

A former employee left the company, and left a balance in his Dependent Care FSA. He did not incur claims prior to his termination date, so his balance is forfeited.

He is asking where in the Section 125 guidelines does it state that claims are not eligible after an employee's termination date.

Would anyone know where I could find some reference to how the plan participation rules work?

Thanks.

Does anyone use etrade for their roth ira account ? If so I wanted to know if we could purchase stocks/mutual funds and other types of money funds for the roth ira account ? I hear that you need to leave the money for 5 years in order to take the money out to buy a home ? I am fairly new and need some guidance. Thanks.

ken