We recently acquired another corporation that had a dc plan similar to ours. We are rolling outstanding participant loans from the acquired company's plan into our plan. Do we need to execute new notes for these loans since the original notes were between the participants and the prior plan? I'm thinking that we do need new notes because our plan is not a party to the notes. The service provider said that this is not necessary. Any thoughts?

Does anyone know what the disclosure requirements are for changing the date for valuing benefit information from end of the year to the beginning of the year?

Basically, the Plan's census information dated (1/1/03) was used by the actuaries for the Plan year ended 12/31/02.

However, the determination of end of year benefit information on a timely basis has not been practical to say the least bit, therefore the Plan would like to start using data as of the beginning of the Plan year. This would cause the valuation date of benefit information for Plan year ended 12/31/03 to be 1/1/03.

Is this even possible? Any insight or reference is appreciated.

I am trying to help a company that does not offer insurance to their employees solve a problem. They currently are reimbursing their managers for insurance premiums that are paid out-of-pocket by "grossing up" the managers' salary. This is a questionable practice at best, and also not ideal because it's aftertax dollars being used. (They tried more than once to offer insurance to all employees but couldn't meet the required 50% participation test for NC.)

Does anyone know how they might be able to set up a pretax means of reimbursing managers, or at least set up a pretax means for managers to pay the premiums themselves? My reading in EBIA's cafe plan manual suggests to me there is a way, but so far no one I've talked to has given me an actual way to implement a solution.

Any suggestions on this are appreciated.

Ed

Company has a SEP-IRA for which only the owner has balance because he is the only one eligible (3 year eligibility requirement). Company put in place a 401(k) plan this year (6 month eligibility).

Must aggregate for top heavy, correct?. If plan is top heavy, what eligibility is used to determine which non keys would get the top heavy contribution? Thanks.

I'm doing some work for a retirement plan designated as Plan Number 333. I seem to recall that, years and years ago, pension plans used numbers beginning with 333 and welfare benefit plan numbers began at 777. Does this sound familiar to anybody else out there?

I have a doctor's practice who had two staff members. All three were participants in a Safe Harbor 401k and are 20% vested. The two staff members terminated their employment in June 04 leaving only the doctor as a participant.

There will be no more employees to enter the plan until July 1, 2005.

I was thinking ahead to making the distributions for the two terminated staff members. Would this be considered a partial termination even though there was no layoff? These two employees terminated on their own free will.

Should I make them 100% vested? Thanks.

A sole prop farmer wishes to establish a DB plan. His income is schedule F income. I've never even seen a schedule F. The farmer's accountant wants a specific code citation in reference to fica and db contributions for determining when the fica amount is segregated. My response was that fica is segregated from earned income first, then the sole prop farmer makes a db contribution from that taxed amount.

Would someone please steer me in the right direction re the appropriate citation for segregating fica and schedule F?

Prior to sponsor paying QNEC to plan, sponsor files bankruptcy. Owners of sponsor are plan participants and also the plan fiduciary. Other than pursuing collection of the QNEC in the bankruptcy or suit against plan fiduciary, is there any (simple) procedure or ruling allowing/mandating transfer of the QNEC amount from the owner/fiduciary/HCE plan account to the NHCE accounts? Thanks for any suggestions.

Married participant retires and elects the 50% QJSA. A year later he and his wife are divorced. She is willing to submit a QDRO waiving any survivorship interest in the plan. Goal is to get his monthly benefit bumped up by switching to a single life annuity.

Our procedures don't allow for this waiver, and I know the order cannot require the plan to take this action.

My question is whether the plan has the OPTION to allow such a switch. From the administrator's point of view, the 2 forms of benefit are actuarially equivalent. May a plan allow this?

A partipant took out a loan and loan payments were made through payroll deduction. However, the employer failed to transmit the payments to the trust account. Should a 5330 be filed? What should the plan sponsor do?

If a profit sharing plan has a discretionary profit sharing contribution, and the employer intended on making a contribution but didn't deposit the contribution on time, what are their options (if any)? Can they deposit the contribution late and just not take the deduction for it and still allocate the contribution to the participants?

The new regs require the insurance company name and contact information to be included in the general COBRA notice (sent to new enrollees of the plan).

My company offers employees numerous choices of medical, dental, and vision plans. Does anyone know if we can list all the insurance companies in the general notice, or do we have to customize the notice to each employees selections?

Thanks for any advice.

This probably has an obvious answer, but I had to ask: Client wants to have a loan feature in his 401k plan. He understands that there will be a small fee that the loan participant will incur and must pay, to the TPA. Client's question is, can he (the owner/employer) also charge a nominal fee for his aggravation involved in approving the loan? He is talking in the $30 - $40 range, not much at all. Also, could this be paid to the employer?

The plan permits only one loan outstanding at a time. A participant took a loan for the purchase of a primary residence a few years ago. The loan was amortized for more than 5 years.

The participant wants to add to the loan amount. Can the new amount be amortized for the remaining payment term of the first loan (more than 5 years left) even though the additional amount is not for the purchase of a primary residence?

I would think I could only amortize the additional amount for 5 years but I'm not sure. If I amortize the additional amount for only 5 years, I don't have level payments, but I think that is okay.

Note - we won't meet the requirements of 72(p) if I consider both loans outstanding at the same time. Thanks for your comments.

Michele

OK, we've got Oct 6th amendments and a new Conference Report for HR 4520 published on Oct. 7th. A few surprises, like a performance based deferred comp 6 month grace period on the deferral election...., but generally, includes most the restrictive provisions of 4520 & 1637. Effective for taxable years after 12/31/04, but deferrals are subject to a retroactive application if there is are certain material modifications after Oct 3, 2004.

See: http://waysandmeans.house.gov/Links.asp?section=1559

To quote the site again: The next step is for both the House and Senate to hold an up or down vote on the Conference Report, H.R. 4520, the American Jobs Creation Act of 2004. Once approved by both chambers, President Bush can sign the measure into law.

Does anyone know of a service that would provide to a subscriber up to date information relative to state tax withholding requirements for qualified and nonqualified plans? I would expect that such a service exists. This particular facet of retirment plan administration is not my expertise, although I can do a nice job with a DB valuation. I am hopeful that such experts do access these message boards and could point me in the right direction.

A U.S. company has employees who are Canadian citizens who work in Canada. I am told they are paid in American dollars, which they then take to their bank and convert to Canadian currency. I believe they have no "income from U.S. sources", and are therefore excluded from coverage testing, etc. But, would they be allowed to participate in a U.S. qualified plan if the Employer wants (or more specifically, if the Employer's broker wants them to participate in order to benefit from larger investment commissions)? If it is permitted to exclude them, is it also permitted to include them? I have searched and haven't found anything that addresses this.

Specifically I am looking for an IRS response in a general session to Q&A- 30 from 1997.

Under the hardship regulation 1.401(k)-1(d)(2)(iv) for deemed hardship distributions, it states four primary reasons a participant could take a distribution from the plan. The 5th item under the deemed regulations says, "The Commissioner may expand standards. The Commissioner may expand the list of deemed immediate and heavy financial needs and may prescribe additional methods for distributions to be deemed necessary to satisfy an immediate and heavy financial need only in revenue rulings, notices, and other documents of general applicability, and not on an individual basis."

We have been receiving many questions from individuals about taking a hardship distribution because of the hurricane disasters in Florida. Would the President's declaration of an area as a major disater area constitute a "deemed" reason to issue a harship distribution? Could the declaration by the President be the "other document" or would the declaration actually have to be from the commissioner?

A participant is entitled to an accrued benefit based on top heavy rules. They have 2 years of top heavy.

The participant now changes jobs and becomes an inactive participant but continues to work for the employer. It appears that under the top heavy regulations M-2 that they must receive additional top heavy years of credit as long as they get credit for a year of vesting. This is based on the reading in (b) that refers to 411(a)(4), (5) and (6).

Am I reading too much into this? (other than the fact they have not been updated for umpteen years). I do not see a way to not grant the additional years of top heavy credit.

Thanks in advance.