I have a 9/1 plan year. For the 2003 calendar year, I have an HCE that had a $2,000 excess deferral that never got paid (now an operational defect). That HCE had an ADP excess contribution for the 9/1/03 - 8/31/04 plan year of $3,000. The $3,000 was paid on 10/1/04 (before 2-1/2 deadline).

Can I offset the ADP excess to satisfy the excess deferral that never got paid?

I assume this can be done in accordance with 1.401(k)-1(f)(5)(i)(B). I see the tax reporting as: $2,000 excess deferral taxable in current tax year (2004) and $1,000 ADP excess taxable in the prior tax year (2003).

Thanks.

I have heard that Wisconsin is taxing HSA contributions (both employee deferral and employer contributions). Has anyone else heard this? Are any other states taking the same position?

I have in my possession an old copy of the Code, and I would like to know whether it still possible for a late retiree to segregate his normal retirement lump sum and separately invest it, as IRC 414(k) once provided. Unfortunately, my client is a one-life group, and I am trying to minimize his tax liability on asset reversion.

Any ideas would be appreciated.

For a plan with both core investments (mutual funds) and individually directed accounts. that is moving from balance forward to daily valuation, should the participants with IDAs also be blocked from making any investment changes, requesting distributions, loans, etc. as the participants in the core investments are prohibited from doing so until the 12/31 balance forward valuation is complete? Does this hinge on the ratio of HCEs in the IDA group?

The comp threshold for officers that are key employees increases from $130,000 to $135,000 in 2005. The 2005 top-heavy test will be done 12/31/2004 based on ending balances and census data for 2004. Do I use the new $135,000 officer comp limit since it is technically the 2005 test? What about start-ups in 2004? Do I use the old limit for the 2004 test and the new limit for 2005, similar to how we did things for 2001 start-ups due to EGTRRA changes effective in 2002?

We have a prospect that is currently employed by the United Way (non-profit). a small group of employees (4) are spinning out to a new non-profit (they have a 403b plan).

The UW employees are in a DB plan and it is being terminated.

I have several questions:

Can a non-profit have a 403b and a 401K?

How about a 403b and a simple?

What options are available for a group of 4 wishing to save for retirement, cash flow is not big, but they do want to save.

HELP!!!

We have a client who is spinning out a new non-profit and their existing employer (United Way) has a DB plan, can those assets be rolled into a qualified plan?

Also this new group will only be 4 participants, what is their best option for a new retirement vehicle?

Thanks

Why

Is it required to withhold state taxes from a minimum required distribution?

This may seem like a dumb question and maybe it is.

How do you make sure that you are not discriminatory in favor of highly compensated employees? Use similar testing as for a 401(k) plan?

If you find that you are discriminatory, how do you fix the problem in this type of plan?

Any help you can provide would be much appreciated.

Thanks

Does anyone have any new information regarding legislation which would permit the rollover and/or merger of 403(b) plans into 457 plans?

Are monies in a 401(k) plan subject to creditor attachment or does the "anti-assignment rule" of section 401(a)(13) protect one's assets from creditor attachment.

I have a client that is a C-Corp and the only 2 employees are a father and son. The father is 100% owner. Can they file an EZ do to the attribution rules?

Our administrator is advising that we do not have to do audited financials for our DB plan because it had less than 100 active participants at the beginning of the plan year. However, we would have more than 100 people if we counted the retiree medical folks (under 401(h) account)--should they count? Thanks.

We have a potential client that has historically filed one 5500 for their health,dental, life and disability. Do they need to file seperate forms for each of these comeponents?

We need to update our ERISA Outline Book. Does anybody know when the 2005 version is set to come out? They still have the 2004 version on the ASPPA website.

Thanks

Suppose you have a small consulting firm in the following position:

-- Virtually all of the business is generated by person A (i.e., person A has the client contacts that lead to projects and the rest of the staff executes the work as directed by person A). As such, without person A, the firm could not exist in its present form.

-- Person A is 60 years old. The rest of the staff ranges in age from 25 to 60.

-- The firm has a DB plan with a normal retirement age of 65.

-- The DB plan is funded using the individual aggregate approach.

In this circumstance, is it reasonable to fund the plan based on the normal cost (level contributions) assuming that the plan will continue indefinitely, given that it is expected that the firm will be disbanded and the plan terminated in the relatively near future (5 years assuming that person A actually retires at the normal retirement age)?

For example, suppose person B is 35 years old. At person B's normal retirement age, person A would be 90 years old. Thus, the company would surely have been disbanded and the plan terminated long before person B reached the retirement age. In that case, would it be appropriate to calculate the funding for person B as the normal cost (level contribution) over 30 years?

If not, what should be done in this circumstance?

Thanks.

My client has a 401(k) plan that provides for matching contributions with a 20% per year of service vesting. Let's assume that effective 1/1/05, the plan sponsor is going to change the plan to a safe harbor plan by making the mandatory matching contributions beginning in 2005 with 100% vesting. Question? What about matching contributions that were made prior to 2005? Must they fully vest when the plan become a safe harbor plan, or can they continue to vest based on the graded schedule?

A client has distributed the safe harbor notice stating they will contribute the 3% SHNEC for the 2005 plan year. Is it possible to rescind this notice before the start of the plan year?

We have a number of highly compensated employees that reach the $205,000 compensation limit fairly early in the year. These employees are encouraged to keep their contribution percentages fairly low so that they can receive the maximum benefit of the employer match (we use the safe harbor matching - 100% of the first 3% and 50% of the next 2%). The problem is that these employees will probably never get to the $14,000 annual contribution limit doing this. Our benefits director is asking whether or not this is just the way it is or if there is something that can be done to allow these employees to still contribut the maximum contribution amount but still take advantage of the employer match. Should we offer after tax contributions once the compensation limit is reached? Any other suggestions?

Also, excuse my ignorance, but the 3 limits (401(a)/annual compensation, 402(g)/maximum contribution and 415©/annual defined contribution limit) apply to all and every 401(k) plan and participant regardless of how the plan is designed, correct? Safe Harbor plans are not exempt? Thank you.

My firm is considering openings up the administration side of the business to include the administration of HRA Plans (deductible only). Can anyone give one place to figure out what the admin requirements are other than software?