A client (one owner and one common law employee) has a calendar year DB plan effective 1/1/02. The 2002 work was completed on a timely basis based on a letter from the client stating that he made the required contribution (also on a timely basis). As an aside, this client has outstanding fees of almost $6,000 and we have not done any 2003 work since requesting the census and assets in January, 2004. We have found out that the client did not make the 2002 contribution at all, he has not been at his medical practice (he is on extended medical leave), his house is dark and mail is piled up. All that being said, what are my options with regard to funding and/or terminating the plan or our services?? Thanks.

We have 2 entities, one for-profit one not-for-profit. The for profit has a 401(k) with deferrals only. The NFP has a safe harbor 401(k).

To reduce costs they would like to put everything together. We like the idea of a multiple employer plan but how to we reflect the different benefits in the document (Corbel Volume Submittor). Can we simply write in the eligibility that Employees of the for-profit entity are not eligible for the safe harbor provision?

I know that the testing (where applicable) is separate and i know all the 5500 nuances, etc.

Can someone please tell me what the compensation limits are for someone to become on HCE in 2004 and 2005.

We have a client that has terminated their DB plan. They have not yet received approval from the IRS but they have submitted the termination to the IRS. They have a $200,000 funding shortfall. They want to go ahead and fund this but Principal (their provider) is telling them they cannot accept the contribution. Is this correct? Can they not fund the shortfall until they receive approval of the termination from the IRS?

A client of ours has given us an IRA beneficiary designation (his son is beneficiary) drafted by his attorney that basically directs the custodian to distribute the RMD based on the son's recalculated life expectancy. the custodian (fidelity) will not take the form.

i noticed a sample beneficiary designation in a forms book i have with similar language except that it is permissive (not mandatory). is this the reason they wont accept the form or are the wrong in not accepting the form?

Yesterday I electronically filed two 5500's with EFAST and they appeared to upload successfully. Usually I get a DOL acknowledgement file within five minutes of filing. As of today, I still haven't received an acknowledgement file for those returns I filed yesterday.

Has anyone else experienced a problem with this? How can I find out if the files were actually accepted?

Thanks.

Lets say you have a non-standardized prototype 401(k)/ps plan and the owners at this late date decide they do not want to share in this year's profit sharing contribution. They have already made 401(k) contributions and plan to continue through year-end. They can't waive participation, but can I amend the plan, effective 12-31-04 to exclude them from the plan? I could exclude all owners, just like Union employees, etc. The plan requires 1000 hours and year-end employment status in order to share and my concern is that amending to exclude them on the last day of the year would be a cut-back. A more expensive alternative, but one that I think would be more legit would be to amend to a New Comparability plan, putting the owners in their own group.

Any thoughts?

I have a client who may need to apply for a funding waiver for plan year that ended Dec 31, 2003. Client is still looking for ways to come up with money to fund plan, but wants to fully explore waiver option (which would give him more time to fund the contribution). Who's the expert out there? Here are the facts: Plan covers about 15 participants. Funding liability for year in question is $222,000. About 90% of that funding liability is attributable to owner. Employer has never applied for a waiver before. If you have experience with applying for waivers and can take on this project at this late date, please call me. My number is 805-563-5300, ext. 11.

Thanks.

I have a 9/30 plan year end and am getting ready to change to a 12/31 plan year end. The plan provides for CUC however, under the 9/30 year, participants were only permitted to make CUC between 10/1 - 12/31 if they met a regulatory limit - not because of a plan limit (which applies to the HCE only).

I will now have a short plan year that will end 12/31/04. I'm thinking that I will now be able to permit the HCE to make additional CUC in excess of the plan limit during this period. Does that sound correct? Am I missing anything?

PAL

The plan year falls between 8/1/03 - 7/31/04. The plan has failed the ADP test and an HCE that is eligible for catch-up contributions.

Assuming no catch-up will be used for the 2004 plan year, and no 402(g) limits have been exceeded in any calendar year. Can the 2003 & 2004 calendar year limits ($2000 & $3000 respectively) be combined for the 2003 plan year ADP test? Assume the test fails and the HCE's refund should be $5,000. If these two limits are combined for this plan year, the HCE could apply all of this to the refund.

Please advise what a defined benefit 457(b) plan is and where I can find additional information on it.

Thanks.

Participant takes a loan in May 2000. The maturity date is June 2004. Particpant missed a couple of payments at some point in time & in June 2004 was a month or 2 behind. The loan document echo's the law as far as cure period goes. Should this participant default unpaid balance in June 2004 because loan has hit maturity or should participant get the benefit of the cure period?

Thanks in advance for any guidance.

The 'actual' 401(a)(17) limit for 2003 was 203,180 (which was then rounded to 200,000 for purposes of benefit calculations).

Is there a site where the new limit is published (the exact one) because it can be used to project FASB compensation limits??

Thanks for any and all help.

Am I correct in saying that if a one man show plan like a solo 401K plan has no other employees then that plan is not protected by ERISA? Not protected from litigation? That it is only protected when there are employees other than the owner/trustee/sponsor? We all know that ERISA was put into place to protect employees from being cheated... Does the DOL take exception when a one man show establishes a plan and hides behind ERISA in the event he is sued? In that scenario will his pension assets be attachable in the event of a law suit?

Any cites would be greatly appreciated... either way they fall.

We (TPA) were approached by one of the advisors we work with regarding their client who (1) did not amend for GUST and (2) terminated the plan and distributed the assets without documentation or election forms. The owner is the only participant. Apparently he called the IRS and asked them how to terminate the plan, and they told him to distribute all the assets and file a final Form 5500. Sheesh!

Do you think this can be handled through a single VCP submission? If so, I am guessing that the reduced nonamender user fee would not be available, even if by some miracle we could get it submitted by September 30. Is this the best way to handle it?

A sole proprietor dentist was the sponsor of a 401(k) plan. He died in November 2003. From January 1, 2004 through September 30, 2004, the estate has taken over the practice. On October 1, 2004, the spouse, who is also a dentist, will take over her deceased husband's practice. For 2004, how is the Profit Sharing contribution designated? Does the estate pay 3/4 of it and the spouse as the employer pay 1/4 of it? If so, does the estate then account for 3/4 of it on the tax return and the spouse account for 1/4 of it on her tax return? Or does the spouse pay all of it since she will be the plan sponsor as of the end of the 2004 plan year?

Is there any notice to participants (other than the statement in the SAR) required when a plan has an accumulated funding deficiency?

Company A currently sponsors a profit sharing plan for 15 wholly owned subsidiaries. Company A is now looking to buy another 10 companies. Company A may buy these new companies with Company B with each owning 50% of the new companies. Since Company A already sponsors a profit sharing plan, can the new companies participate in Company A's plan without creating a multiple employer plan situation? (I think we will create a multiple employer situation). The other option would be to have Company A buy all the new companies, manage all the companies and then pay B a fee. Thoughts?

An employee of our client had an individual health insurance plan and received preimum reimbursements from the health FSA. That employee who received the reimbursement is no longer employed with our client. The employee also may have been involved with administering the plan. Now that this has come to light, how can we correct the mistake? What are the consequences to the plan for making these prohibited reimbursements (under Prop Reg 1.125-2, Q/A-7(b)(4))?

First let me say that DB is definitely not my area of expertise!! Can anyone give me a mathematical formula to determine the present value of an accrued benefit. I have the monthly benefit amount and the participant's date of birth and normal retirement age. My assumptions are: 1983 Group Annuity Mortality Table and the applicable interest rate is the rate on 30 Year Treasury Securities. Sorry if this sounds like a stupid question. Thanks to any and all who care to reply!!!