Can a client establish a QDRO policy that, in effect, says that the amount of the benefit to be disbursed to the alternate payee will be specified in the QDRO. I've seen several that specify that the balance as of the date of marriage, for example March 6, 1992 is to be determined and the balance through date of separation is to be determined. The difference is split etc. The attorneys get upset when you explain the difficulties of this.

As a TPA, I'd like to stayout of the middle of this and keep things simple for my client and myself.

If you can do this and there is no current policy, can you establish the policy after you receive the QDRO?

ADP test for the 2000 plan year failed - but it was never corrected. Correction should have been made by 12/31/01.

Self Correction Program allows QNECs and One-to-One contribution to correct the operational failure - but only by the end of the 2nd plan year following the year in which the failure occurred. Meaning, the SCP deadline was 12/31/03.

Any thoughts on where to go from here?

Do you have to grant a total month of coverage if anly a partial month's payment is recieved? Our feeling is that you do, but we would welcome additional comments. Thanks in advance for your help!

I have a prospective client. They are on a pre-GUST prototype document prepared by The Benefit National Companies. It has a provision which reads:

"Within the time period described below, the Employer will provide written notice to each Participant that the Employer will make...(a 3% non elective safe harbor contribution)" The employer DID NOT give notice within the required time frame.

I have 2 questions, and will appreciate your input, particularly, on the second:

1. Do you think the plan is subject to a safe harbor contribution requirement? Even though the document says the employer will give notice, he did not do so. Would you agree that this would be an operational violation that can be self-corrected by applying the ADP test?

2. At the recent ASPA Annual Conference, General Session 4 involved IRS Q&As. Question 16 (from the handout materials) spoke of a truly hard wired safe harbor election. In that question, NO notice was given. The questioner asked (a) must the plan perform the ADP test, and (b) must the 3% still be contributed. THE IRS RESPONSE was: "No; You have an operational defect which should be corrected under EPCRS. This will be additionally discussed from the podium." DID ANYONE HEAR WHAT RESPONSE WAS GIVEN FROM THE PODIUM? What is the operational failure, and how is it to be corrected?

Thank you very much!!!

A client with a PYE 09/30/04 profit sharing only plan added a 401(k) feature with a basic (100% on the first 4%) safe harbor match provisions effective 2/1/04. They elected to match on a EOY basis.

What compensation should be taken into consideration when calculating the safe harbor match? Should full year compensation or compensation from 2/1/04 - 9/30/04 be used? Please note all participants were eligible before 2/1/04. They just allowed deferrals effective 2/1/04.

The use of full year compensation will give me a different result only if the participant elected a deferral rate greater than 4% during the portion of the plan year they were allowed to defer.

As it turns out, only the HCEs elected greater than 4% during the portion of the year they were allowed to defer.

They will be giving a profit sharing contribution as well. Is it possible to use full year compensation for the profit sharing contribution and compensation from 2/1/04 - 09/30/04 for the safe harbor match if all the participants met the eligiblity requirements for the plan the entire year?

Any thoughts would be greatly appreciated.

What is meant by "provide the notice." For example, would posting the notice in a central location satisfy the notice requirement?

Let's say the plan allows for installment payments as well as in-service distributions. Is there any reason an active employee couldn't set up installment payments via in-service withdrawal? It seem okay to me, but I haven't really seen it done before.

Husband and Wife real estate partners... Together they earned $225K. Husband is paid from the real estate office the 1099. Can that income be split between the husband and wife so they can each defer and share in an employer contribution? or would the 1099 have to be paid to a newly established company, the "Mom and Pop Real Estate Company" and then divided the income up amongst each other?

A followup question... when you have the partnership as described above and both hub and wife defer $13,000 each, how do you calculate SE income? and SE tax deduction? and all those wonderful taxes? Since they are hub and wife, is there one SE tax deduction?

I'm new to this. We have a nonqualified plan that allows "interim distributions". Will they still be OK under the new HR4520 (American Jobs Creation Act)?

Regarding the 401(a) limit of 205,000 - should HCE's who contribute less than 6% be allowed to contribute up to the $12,300? My understanding was that if an HCE contributed for example 4%, the maximum amount they would contribute that year would be $8200 - i.e. when their compensation reached 205K they can no longer contribute. Another person told me that they should be allowed to contribute until they reached $12,300 (205k * 6%) - regardless of the 205K.

Thanks for any assistance.

This is a new plan with over 100 participants. At the end of the first plan year (12/31/04) the only plan asset will be the employer contribution receivable.

Will an audit be required? This first plan year is not a short year.

Thanks.

All legal minds please give me a feedback on this.

A Codicil reads as follows:

I'm conveying the real property at 11 Main St., NY, by will, to create a Life Estate for my husband John Doe and create a Remainder Interest held in trust for my brothers and sisters. John Doe as a life tenant shall occupy and use the residence. He will administer, maintain and be responsible for expenses and taxation of the real property.

Upon the death of life tenant John Doe, I direct the trustee to sell the real property at 11 Main St. NY. The net proceeds of the sale are to be used to purchase a 20 year Immediate Annuity for each of my brothers and sister that agree to and receive lifetime distribution from my IRA which they are beneficiaries. If any of my brothers or sisters, that are beneficiaries of my IRA, do not agree to nor receive a lifetime distribution from my IRA, that person will only receive one dollar from the sale of the real property.

Questions?

Is a Life Estate created with the wording?

Can the trustee sell the Remainder Interest and distribute it via Immediate Annuities?

Are the beneficiaries of the IRA given an incentive to select a life distribution instead of lump sum?

Comments please specially fron New York

Are there such plans? Can federal employees participate in a 457 plan or do those plans pertain to state and local government employees only?

Does anyone know a link to checklist of the information which must be contained and disclosed in a retirement packet for a DB plan? We are in the process of reviewing our material and want to be sure it is up to speed. Thanks.

I am sitting for the C1 exam in December, and am getting a little overwhelmed with the reading, though I thought I had given myself plenty of months of study time. Any words of wisdom from anyone who has been there?

Participant to have surgery re grafting bone? onto his jaw. Part of the procedure involves cheek implants, which per the doctor, are required, i.e., nonelective. Participant has requested a hardship withdrawal for the costs of the procedure including cheek implants. Per Pub. 502, cosmetic surgery is OK if it is necessary to improve a deformity arising from birth defect, pers. inj.,.... Plan's hardship w/d rules are the safe harbor rules under 401(k). Thus, med. expenses as described in Code Sec. 213(d) meet the definition. It appears the safe harbor means what it says, i.e., med. expense has to qualify under 213(d) b/f being the basis of a hardship w/d? E.g., breast implants as part of reconstructive surgery after mastectomy is OK b/c meets 213(d), but breast implants for cosmetic reasons only don't qualify...?

Hi Everyone:

Simple question, but I'm having difficulty finding a case that indicates in stock sale no termination of employment occurs and purchaser treated as always having been employer. Anothjer atty. in office wants a case holding this. Any assistence is greatly appreciated. Thanks. Ed

Company X has 4 EEs and is owned by Company Z. All of the EEs in X are salaried. Company Z does not have a 401k plan in place. The EEs of company X want to contribute to a plan.... maybe simply deferrals, no ER contribution or match.

Is there any way around this? Would both companies have to have a plan? Deferral only plan?

I'm having a brain freeze (this is not the first time and probably not the last). I'm trying to locate authority which permits a distribution to be made to a participant in a DB plan that has attained the NRA (as defined in the plan) but is still employed. Plan is silent and does not require a severence from employment to receive a distribution once participant has attained NRA. I believe that this is possible, but cannot locate authority. Any help is appreciated.

Thanks.

Does anyone know whether the $100/$195 limits have changed for 2005?? I can't find this anywhere!!

Thanks!!