Working with a client who is setting up a SEP, want to use their fiscal year of 7/1 - 6/30. One of the investment providers they are interested in does not have their own prototype SEP document, instead uses the IRS model. My understanding is that the model only allows for SEP's to be maintained on a calendar year basis. Wouldn't this preclude them from using this provider? What if they wanted to get an individually-designed SEP document. What is entailed to do this? Or, are there any companies that provide "customized" documents?

Partnership and C corp are owned by same 3 persons (related). Partners cannot participate but owners of C corp can. Does having them together taint the 125 plan? Or can the owners defer from W2 comp even though the employees of the partnerhsip are also in the 125 plan?

Can't find the answer to this:

Plan has an HRA which gives employees $3000 at the beginning of the plan year for payment of expenses not covered under the medical plan. I know that the plan has to offer COBRA under the HRA to participants who terminate employment but have been unable to determine how to calculate the premiums to charge.

Since it is an HRA, the employer contributes the entire amount of $3000. As it costs the employer $3000 to fund this account, I assume the premiums would be $3000 plus the 2% admin fee allowed under the COBRA regs.

My problem is the timing of the premium payments. Since the employer makes the $3000 available to active employees at the first of the plan year, is it okay to make the terminated employee pay the entire amount up front, or does this violate the COBRA reg that states that the participant must be allowed to pay COBRA premiums monthly?

The plan allows participants to carry over unused monies, so it would benefit this employee to elect COBRA because they could essentially pay $3060 and have an additional $5000 in the account that had previously accumulated.

Thanks for any insight or comments.

I'm new to ESOPs. This is the plan's 2nd year -Leveraged S-Corp ESOP.

1. Working on plan year 2003. Corp did not make all its payments in 2003. We did have some principal paid during 2003, so we have allocated contribution based on the normal formula for releasing shares. Corp also decided on a contribution receivable of $550,000 to max their tax deduction. Accrued interest at 12/31/03 was $475,000. I was going to post a dollar amount receivable on participants' statements for the assumed principal of $75,000, and allocate the shares in 2004 when loan payments were actually made. However, the loan payments made in 2004 have yet to touch principal, they are all interest payments. So, in 2003, do I then NOT post the receivable, because there will not be any principal payments to release shares with?

2. In 2003, we have now had several terminees who are 20% vested. We are not allowed to pay them out in stock. All of them have under $5,000. Let's say there is $15,000 total distributions to be made. Can corp make a cash contribution that does not go to loan payments in order to pay them out? These will be our first distributions, and I just don't have any idea how these happen. We are trying to pay them out before 12/31 so we don't keep them on books another year.

PLEASE HELP! THANK YOU!

My VS document (DATAIR) uses language defining facts and circumstances "hardship" for purposes of in-service distribution of employer regular matching and profit sharing in terms of "immeduate and heavy financial need of such severity that the Participant is confronted by present or impending financial ruin...".

The same document's facts and circimstances determination of hardship for salary deferrals is much more "generic", i.e., "as determined by the Plan Administator on the basis of all relevant facts and circumstances."

Anybody know of any reason (regulatory or otherwise) as to why there is such a "disparity" in the definition of hardship for employer versus employee money? Do any of the other major document providers contain similar language?

Plan sponsor of DB plan offers early retirement window to HCE's and NHCEs but the people who actually elect to take the window benefits, which requires termination of employment, are mostly HCEs. I now have a demographic error, where the discrimination in favor of HCEs results in the outcome, not the language in the plan. Since affected HCEs are now terminated and this was a precondition to the benefits from the window, what is the correction? Please help me with your thoughts.

Thank you!

Does anyone have any experience with a "good faith" attempt to collect difficult-to-find information for Form 5500/schedules for unfiled plans?

Large LTD and Life Ins plans haven't filed for several years and have changed vendors numerous times--administrator thinks it will be nightmare to get financials for all of the lost years. My reaction is just to do our best and leave blank what we cant findout after reasonable efforts.

Any thoughts?

Let me preface this with the fact that I KNOW NOTHING about Defined Benefit plans. I'm a DC kinda gal. I have been asked by a collegue the following question:

"Have you heard about any proposed legislation that would / could change the

way an employer can calculate the lump sum payout from a defined benefit

plan? I have heard some "buzz" about it, but haven't been able to get any real

detail."

Has anyone heard this also? Is there a source I could refer to? Thanks.

Has anyone had any experience - positive or negative, with the Alerus Retirement Solutions? Omni-Plus is the recordkeeping system and Sunguard is the carrier of Omni-Plus

Can a Coverdell Education Savings Account be funded by a Certificate of Deposit?

We have certain employees that may need some physical therapy to remain healthy to do their job. The employer pays for and provides the services of a chiropractor and physical therapist on site and a nutritionist off site. Any employee in the department may utilize these services.

Is this an ERISA plan? What type of plan would you consider this? Does HIPAA Privacy apply?

If elected in the EGTRRA "good faith" amendment, the increased comp limit of $20000 could be applied retroactively. If so, does that mean that future indexed increases are retroactive as well? I've asked this question of three sources, and gotten a "yes", a "no", and "it's unclear". Anyone else want to weigh in? If the answer is "yes", do you still get the exexption from a4 testing on the increased benefit?

For the last 4 years our company contracted with an employee leasing plan. Technically, we were employees of the employee leasing company. The leasing company offered a 401K plan, of which I contributed through payroll deductions.

Now the company I report to work for is cutting ties with the employee leasing company, taking the employees and payroll back in house. We've been told that technically, we'll be working for a "new" employer. The company is negotiating with the current TPA (third party administrator) to either continue the existing 401K after the anniversary date lapses at the end of the year, switch to a new plan with the current TPA, or change TPA/plans all together. I'll probably continue contributing to the 401K when the details are worked out, primarily for the matching contributions and profit sharing. But overall, I'm not happy with the investment options and fees of the 401K offered by the TPA. (I't still up in the air whether we'll stick with that administrator or look for another with better investment choices).

That being said, is there an opportuinity to move (roll over?) the existing balance to my current traditional IRA, where I'm free to invest in individual stocks or ETF's? Some of us believe the opportunity exists, because (again, technically) we are changing employers. I'll still participate in the 401K, but would rather have the current balance in a more flexible investment vehicle.

As always I value your opinions and comments.

Carl C

I had this question posed to me and am stumped by it. I need to know if an inmate can make a contribution to an IRA if their only compensation is wages earned while in a correctional facility. If anyone can help with this I would appreciate it.

Is a Blackout notice required when a fund closes, and mapped to a like fund?

I thought I've seen the last of the combo Money Purchase Plan and Profit Sharing plans.... it is almost 2005...

I am consulting with a possible new client ( I might not want) whereby in 2003 they had a MPP and PS plan. The problem arises in that the TPA termed the PS plan and not the MPP plan and filed a FINAL 5500 for the PS as well.

The termed PS money was moved into IRA's as the MPP still exists and is obligated to fund for 2004. Making things more complicated, this year is not a "banner year" and the plan sponsor lost any discretionary ability keeping the MPP. I am sure it is his own fault, I am sure he signed away, terminating that plan... but come on... the TPA should have been raising flags...

What would be the best method for getting the PS back and the MPP out?

Any thoughts... posible pitfalls?

I'd like to confirm some information I've heard about HSAs. It was my understanding that the employee contributions to an HSA could be taken directly out of payroll, but would not be pre-tax. The contributions to the HSA would come out of the employee's pay post tax, but then the employee would be able to deduct their contribution on their individual tax return.

My co-worker was told that contributions could be handled either way - the employer can either treat them as pre-tax deductions on the payroll, or treat them as post tax and then the employee can take the deduction. In such a situation, sounds to me like it would be up to the employer as to how to handle these.

Could someone please help clear this up for me?

Thanks in advance for your help!

in determining the participant count for the highest number of participants in the previous plan year, we have a situation with three plans within a controlled group, and some people are participants in two of the plans, e.g., transfer with frozen benefit in one plan, active and accruing in the other - do they count as 1 or two participants for the count?

I have an existing 401(k) Plan that terminated in 2003. Last Distirbution occured in January 2004. We are putting in a new 401(k) Plan for 2005. Can I start the Plan in January 2005, or do I have to use a Feburary 2005 effective date so I don't run afoul of the 12 month rule?

In other words, does the 12 months exclusion rule run from the date of the Plan Termination, or the date of the last distribution from that terminated Plan?

Unmarried participant names Son (B) as beneficiary.

Participant dies when B is age 50.

B elects payments over his lifetime (i.e., 34.2 years).

B receives minimum distribution each year (i.e., 1/34.2; 1/33.2; 1/32.2, etc.).

B dies in 2004 after receiving the third distribution (1/32.2).

What is the minimum distribution in 2005 for C, who is B’s beneficiary?

Is it?

a) 1/31.2? If yes, will minimum distributions then continue based on B’s life expectancy (i.e., 1/30.2; 1/29.2, etc.) until all assets have been distributed?

b) 100% of the account balance payable in the year after B’s death (2005)?

c) 100% payable within 5 years of B’s death, which can be taken in any manner as long as all of the assets have been distributed from the account before December 31, 2009?