Have friends working for small bookkeeping business. Employer has taken the dedutions from their paychecks but all the deductions and matching employer contributions are not being deposited to the plan. They have spoken with the owner at length about this and after months all is not yet corrected. Deposits for 2003 have finally mostly been made but 2002 plus some of what has been deducted from checks in 2004 still has not been deposited to the plan.

Do these employees have any recourse available to them short of getting an attorneywhich would result in their loosing their jobs?

Thanks,

Quietcook

Question: What are the required minimum distribution requirements for a 5% business owner who retires from the 401(k) Plan at age 70 ½ during the 2004 calendar year and is requesting a transfer from the Plan to an IRA?

We are trying to determine if the 5% business owner who turned age 70 ½ in the calendar year 2004 is required by law to complete his RMD before transferring his account balance to an IRA. The business owner would like to transfer 100% of his 401(k) account balance to an IRA during the 2004 calendar year and delay taking his RMD from the IRA until April 1, 2005. We believe 401(a)9 may require an RMD to be completed prior to the transfer of the 401(k) account balance to an IRA.

Please advise or comment.

I have an IRA account, that has all the losing techonology stocks worth only $1000. Can I close it and take a tax deduction for my losses?

Under the Medicare rules Medicare must be the secondary coverage for employees of an employer who has at least 20 employees and that covers Medicare beneficiaries who are age 65 or older and who have coverage under their employer's group health plan "by virtue of an individual's current employment status." The regs at Section 411.104© state that coverage by virtue of current employment status is coverage by the ghp based on employment including coverage based on a certain number of hours worked. My questions deals with the following: If the plan document defines an eligible employee as an employee who works greater than a certain number of hours ("x hours") and defines a retiree so that the retiree may still work part time but must have fewer than x hours so that they are not an eligible employee, but the retiree is covered not as an employee but only as a retiree, do the Medicare MSP rules still prohibit the ghp from providing secondary coverage for the retiree. I have not been able to find anything which says that this does or does not work. Any tips?

A top hat filing with the DOL must disclose the number of top hat plans "and the number of employees in each plan." Reg. §2520.104-23(b)(1).

Question: does the number of employees refer to the number that are eligible to participate, or just the number who elect to participate?

For example, if 25 employees are offered the opportunity to defer compensation into a nonqualified plan, but only 10 elect to do so, does the company report 25 or 10 as the number of employees in the plan when filing the top hat exemption?

annual payment = hours (average of 3 highest consecutive years prior to year of withdrawal) x contribution rate (highest in 10 year period ending with year of withdrawal). I assume hours and contribution rate are based on the entire control group.

Assume the partial withdrawal is due to partial cessation of employer's obligation to contribute and occurs in 2002. To determine the partial liability, need 2003 hours.

For the hours do you consider 1992 through 2001 and for contributions do you consider 1993 through 2002?

Or do you look at hours from 1994 through 2003 and contributions from 1995 through 2004?

We have an employee applying for a primary residence loan -- to be paid over a 10year period. Her husband is going to be the contractor. The only documentation she provided was an excel spreadsheet with a breakdown of the work, who was going to complete the task, and an estimate of the work. She also provided several estimates, one from the local lumber company, a cabinet maker, etc., but they were dated in February and March 2004 -- it's almost November! One thing that bothers me is that none of the estimates were signed as being accepted by either parties.

I am not doubting that her and her husband are building a house. I'm concerned about the documentation provided. I'd really like to know what the IRS will look for in documentation if they came knocking on our door. I've searched the web for answers, but couldn't find anything concrete. In fact, now I'm beginning to wonder if she can even take a primary residence loan since everything I've read refers to "purchase of a primary residence" not building one. Help!!!

I am able to find guidance with respect to reducing or discontinuing a safe harbor match contribution; however, I am having a hard time locating information about discontinuing a 3% non-elective safe harbor contribution. I would assume that the document can be amended to remove the feature and current testing would be required.

Any information you can share on this matter would be appreciated!

who exactly has to get an SAR? the regs just say participants and beneficiaries. does 'participant' in this case mean anyone who had a balance at any time during the year? or does 'participant' also include people who were eligible but did not participate? i searched the other threads on this message board, but didn't find anything exactly on point.

I have an 85 year old client who retired in 1984 and has never taken distributions from her 403(b). She has been advised by her 403(b) representative that her account is not subject the current minimum distribution rules and that she will not be subject to the 50% excise tax on amounts which she failed to take after age 75. Can anyone give me some guidance on the rules applicable to distribution of pre-1897 accruals?

Can someone please point me in the direction of the sample exam for DC2? Thank you.

When processing a loan we, the tpa, charge a loan originating fee. Should that fee be part of the principal that is being paid back or not. For example the Participant would like a loan for $1000 we will put $1150 on the truth in lending. The principal on the amort is $1150 interest being paid on the whole amount. We send the participant a check for 1000 and 150 to us. So they are paying the fee back to themselves. Is this correct or should the amort be for $1000?

I understand after-tax amounts can be rolled to a 401(a) plan is the plan separately accounts for the assets.

Can after-tax amount from a 401(a) plan be rolled over to a 403(b)? If so, what is the plan does not separately account for the after-tax assets?

Thanks in advance

In my 401k plan (which is not Safe Harbor), my company currently matches 50% of pre-tax and after-tax contributions up to 6% of base pay. For example, if I make $100k and contribute $6k pre-tax, I get a match of $3k. Likewise, if I make $100k and contribute $5k pre-tax and $1k after-tax, I get a total match of $3k.

If the plan converts to a Safe Harbor arrangement and the match changes to 100% up to 4% or 100% on 3% plus 50% on 4-5%, can we still match after-tax contributions?

Can the Safe Harbor formula be applied in the same way as our current formula and satisfy the ADP and ACP tests?

If the answers to these questions are YES, do we need to test the match on after-tax or just the after-tax itself?

Fiscal year 10/31

Member defers a total of $2,000 in Nov & Dec 2003 - All catch-up under 402(g) limit.

Member defers $16,000 from 1/1/04 thru 10/31/04 - $13,000 reg deferral plus $3,000 catch-up. Makes no further deferrals in 2004.

Company contribution for member for the year end 10/31/04 is $28,000 to max the 415 limit.

Question - What is the proper amount to be reflected on the member's K-1 at 10/31/04 for deduction on their 2004 return?

Is it $46,000? If so can this generate an audit situation for the individual?

When are the catch-up contributions properly deductible by the individual - flow thru from plan year or is it based on the calendar year it was deferred?

Ok Tom - Sorry to be off topic - I wanted to be sure you saw this so I'm using your forum! How was the ASPA conference?

I have a group where we are planning to offer a high deductible health plan in addition to their regular PPO plan. We plan to offer the HDHP effective Jan. 1. We want to offer HSAs at that time also. The group currently has a section 125 plan with medical and dependent care FSAs. The 125 plan is set up with a Oct. 1st start date (concurrent with the group's medical anniversary date).

I know we have to amend the 125 plan to allow employer contributions via the 125 plan to the HSA accounts. I also understand the employees cannot have both a FSA and HSA. Am I right in assuming that the creation of the new HDHP and HSAs will be a qualifying event allowing those employees who were enrolled in the FSAs to drop them effective Jan. 1? Will only expenses from 10/1 to 12/31 be eligible for reimbursement under the FSA? If these expenses exceed their 10/1 to 12/31 election, could the employer be on the hook for an employee's entire annual election due to the uniform benefit rule? Ie., employee had $100/month election, will have paid $300 from 10/1 to 12/31, but has between $301 and $1200 in expenses.

Thanks

Could a business travel accident insurance plan that provides benefits for only non-employee directors be exempt from the ERISA reporting and disclosure requirements (e.g. top hat welfare benefit plan)?

An LLC previously sponsored a DB plan when it had 3 owners (33%-33%-33%) but then terminated the DB plan when close to maximizing their 415 limits. A few years have passed and now 2 partners bought out the 3rd partner so the LLC is owned between the 2 partners 50%-50%. They've inquired recently about sponsoring another DB plan. Does the ownership change afford them a fresh-start on the 415 limits ? (i.e., is it the same entity). Nothing about the entity has changed except the ownership percentages.

What federal agency has regulatory authority over section 457(b) plans of government and non-government employers?

Thanks,

Joel L. Frank