This individual designated his trust (which was revocable during his life but became irrevocable on his death) as the beneficiary of his IRA. Is the transfer taxable? We don't do much IRA work, so this is a new one on me. Any thoughts much appreciated.

Is there a website that keeps track of Taft-Hartley fund mergers?

I'm not too familiar with 401(k) plans so I apologize in advance for my ignorance. Say an employer makes matching contributions in excess of the plan's limits for matching contributions (i.e., employer matches more than the "50% on the first 6% of compensation" as specified in the plan document). The plan's service provider has taken the excess match and allocated it to a forfeiture account. Are there any problems with this type of transaction? What potential issues, if any, does this create for the plan? Any insight would be greatly appreciated.

I see the number of posts at the time I write this is 99,265.

Any guesses what day the magic 100,000 will be reached?

I am sure that is some actuary out there who knows,

e.g. "what day do you want it to be" and obviously such individually would probably post enough on that day just to make it happen.

therefore, maybe this useless and nonsensical contest shouldn't be open to them.

I worked for a nonprofit company for 7 years and have money in a 403b from that company. There is never any new money put in it. My account has not increase d in 3 years. Actually it has lost money on a consistant basis. I want to close out the account and move it to a non taxable account. Can I convert to my current 401k playn or a Roth IRA?

It appears from the history of Code section 4980 that the excise tax on reversions does not apply to any plan that terminated prior to January 1, 1986, even if the reversion occurred after that date. Is my understanding correct? Thanks

public charity 501©(3) with a 403(b):

Are employee deferrals subject to the ERISA 29 CFR § 2510.3-102 time limit on deposits (sooner of reasonable segregation or 15th of following month)?

Does it make a difference if the plan has or does not have employer contributions (assuming the former is ERISA exempt and the latter is ERISA subject)?

Michael Smith

I will not attempt to influence the learned people viewing this message with my opinion (until after when I will post my answer and rationale).

However, the following situation is interesting (I think):

Valuation 12/31/2004

Actuary assured the client that with the income they were generating and age/compensation data that a 100,000 contribution could be generated easily.

Client promptly contributed on 4/1/2004 100,000. They also invested the contribution in a speculative stock that has paid dividends. The stock is already worth 200,000.

What should the actuary use as assets for the valuation at 12/31/2004?? (Assuming that they do not appreciate any more by then <GGG>!)

a) 200,000 minus prepaids of 100,000

b) Zero (first year of the plan)

c) Something else???

Thanks for any input in advance.

We have a plan with a 401(k) feature with a one-year eligibility and a P/S/P feature with a 2-year eligibility. Does such a plan need a gateway?

Thank you

Does anyone know if regulations limit what can be refunded for exceeding the 415 Limit? Or is it the plan document that can limit what is refunded?

For instance, if only ED contributions can be refunded to remedy a 415 Limit excess then any excess over that amount needs to be offset with future contributions.

Dr. X is a dental client who has three separate dental practices. Each practice is a separate corporation with Dr. X being the sole shareholder of all three.

If Dr. X would establish Safe Harbor 401k plans for his practices, would he establish three individual plans?

Dr. X has an associate dentist who works at two of the practices. The associate's combined compensation between the two practices is in excess of $205,000 annually. To calculate the associate's contribution would I look at his compensation from each practice individually, or is all his compensation lumped together?

Dr. X's wife also has her own dental practice where she is the sole shareholder. What if she wanted a Safe Harbor 401k plan for her practice?

Help!

I should clarify - by "direct rollover rules" I meant the new DOL regs regarding mandatory rollovers of amounts over 1,000 and less than 5,000.

I'm not clear on this. It seems pretty clear that the 402(f) Notice, and either an updated SPD or SMM must be done. But is an actual "good faith" amendment required to be adopted (for VS plans) by then?

By the way, in IRS Announcement 2004-33, the IRS said that a VS practitioner would be allowed to amend the plan on behalf of adopting employers, for changes in the Code, etc. - great provision! However, I don't see, offhand, that this was retained in the draft Revenue Procedure under 2004-71. Anyone know what happened, or if the IRS is planning on adding it back in?

Are you allowed to enter negative liabilites on the Schedule H - lines 1)g through 1)j? I wasn't sure if that would result in a DOL notice or not.

Suppose you have a 401(k) plan that does not match the catch-up contributions. The ADP test fails and a person's excess contribution is recharacterized as a catch-up, therefore no refund. Is that person entitled to a match on this recharacterized amount?

I hate to pound this issue, but here goes:

Company has over 100 participants, and has properly filed their Form 5500 (Plan Number 501, for arguement sake) for the Welfare Benefit Plan, reporting Health, Life, Dental and AD&D Insurance information. Company also has a Flexible Spending Account plan, which allows employees to pay health insurance premiums on a pre-tax basis, and also allows employees to utilize reimbursement accounts for unreimbursed medical expenses. The Flexible Spending Account plan is administered by a payroll provider and has a plan number of 502.

The payroll provider states that no Form 5500 is needed for the 502 plan. I tend to disagree and would like to see a Form 5500 filed, since the Flexible Spending plan is paying for a Welfare Benefit. I went through past posts on this topic, and cannot get what I feel is a comfortable answer. Can anybody help? Thanks for any replies.

Fact pattern:

Participant still working with company (no termination of employment), but for some reason loan hadn't been paid since 2002. It was deemed a distribution.

Participant wants to take a new loan now. I understand that she must pay back the first loan before taking another one.

My question is: Does the first loan have to be paid off all at once? Or can periodic payments come in?

Can you point me to the regs that say either way?

As usual, thanks in advance.

Can a 401(k) account be segregated into 2 IRA accounts for the purposes of segregating the pre-tax and after-tax dollars?

Ok - 2 plans aggregating for testing. One plan is a 401K for salaried employees and the other is a 401K for hourly employees. Both 1/1 plan years.

For the 12/31/03 test, no ACP was done because the hourly plan had no match, and the salary plan had a discretionary match that was not funded.

The hourly plan added a discretionary match in 2004. That plan will be able to use 3% as the NHC prior year percent. If the salary plan makes a discretionary match, they'll have to use 0% as the prior year % since they've had the match, but have never funded it.

So how does this work if the plans aggregate for testing? What prior year percent will be used? Thanks for any help!

We have a client that is interested in the Cafeteria Plan. Part of our administration cost if $6.50 per participant. The client would like to have the participants pay this fee instead of the employer paying it. Is this allowed & if so can the participants have the $6.50 deducted from their pay pre-tax?

Thanks!

7/31 fiscal year C Corp has SEP on calender year basis. Deductible limit for 7/31/2004 is based on compensation during 2003 calender year. Corporation liquidates on 7/31/2004.

Is there any way to make SEP contributions based on the wages paid 1/1/04 - 7/31/04? Seems if they are funded before liquidation, they would be excess contributions since the 7/31/04 limit was already reached based on calender year 2003 wages. The excess contributions would not be deductible and would be available for carryover, but there is no next year. I assume the carryover deductions are lost.

The employee cannot exclude these contributions made during 2004 and has to withdraw the excess contribution. The distribution of the excess contribution is not taxable since it was already included in wages. 72(t) is not an issue since employee is over 59 1/2. The 415 limits have not been exceeded.

I would like to make sure there is no way to leave the contributions in the employee's SEP. Is there a better solution than my understanding above.