My understanding is that group life, LTD and AD&D should be included on a Form 5500 filing (2003). Does this also apply to supplemental group life, supplemental LTD and dependent life?

Thank you in advance.

How is it determined? Do I start with the cash value of the policies at EOY, and if more than 60% are attributable to the Keys, then convert the cv into accrued benefits to see if the 2% minimum accrual is satisfied? If so, are the guaranteed policy rates considered"reasonable for purposes of the conversion?

Does a health insurance welfare plan with over 100 participants at the BOY need to file a 5500 Form IF the insurance plan is specifically not part of the cafeteria plan? (These are insured plans with the premiums paid from the general assets of the Employer.)

in an age weighted profit sharing plan with an end-of-year employment requirement and no other contributions, I have 4 NHCEs and one of them terminated with more than 500 hours. This means 3/4 = 75% passes ratio percentage test. All participants will have the same EBAR due to age weighting. Is this OK?

If there were 5 NHCEs - with 2 of them terminating with more than 500 hours - then the plan would fail coverage and a plan amendment and additional contributions would be required for one or more of the terminated employees, is that right?

what are the answers if this plan is a tiered plan instead of age weighted with the same NHCE data? If the ratio test is met, must I include the nonexcludible NHCEs in the general test? If the plan fails the ratio test, then must I include all the NHCES in the general test.?

Company X maintains a 125 plan for its employees and the employees of its affiliates. One of the coverages provided under X's 125 plan is LTD for many of its employees. The employee portion of premiums is collected on a pre-tax basis through salary reduction. Employees above a certain grade level are immediately eligible while those below that grade level must wait one year to participate. Company Y is an affiliate of Company X and participates in its 125 plan. All employees of Y have to wait one year to become eligible to participate in Y's LTD coverage. During 2004, Y has decided to eliminate its separate LTD plan, to participate in X's LTD plan and change all of its employees' pay grades to be identical to those provided by Company X. This means that those Company Y employees whose new pay grade is above a certain level will be immediately eligible to participate in X's LTD coverage, even if they did not complete one year of service. The issue is: is this a change in employment status sufficient to justify a change in status under the 125 regs? Essentially, nothing is changing for Y's employees except the LTD plan in which they participate and their pay grade. Thoughts? Comments?

I am looking into starting a roth but I know there is an income limit. I am currently just under the limit but I will be getting married in 2 months, which will put me over the limit. In a year or two, I plan on leaving the workforce which may put my husband and I under the income limit. Is a roth the right choice or is there another retirement account that I don't know about that may be better for my situation?

Is there a problem with filing a 5500 before making the corresponding P/S plan contribution? In particular, can a corp under ext 'til 9/15 file its 5500 by 7/15 as long as it makes its P/S contribution by 9/15?

Partnership has a 9/30 Taxable Year. Certain partners make 401(k) deferrals through the entire year out of bi-weekly draws, and then make a "final" contribution to reach the maximum.

Per review of 401(k)-1(a)(6), it appears that Partner Compensation is available on last day of plan year (e.g. 9/30/03).

Suppose amounts are withheld in October 2002 of $2,000 out of a partner's draws and remitted to the trust. For 402(g) purposes, do these count for the calendar 2002 402(g) limit purposes, or are these deemed to be 2003 contributions (since the "Compensation" is not earned until 9/30/03).

Would the answer change if the individual partners filed their own returns on a 9/30 year or 12/31 year?

Employee divorced 2 years ago (no QDRO that client is aware of).

He is required to buy out his ex-wife's half of the house.

He needs to refinance to do so and needs additional monies.

Is this considered purchase of primary residence or no? Title will transfer from his and his wife's name to his name only.

I am assuming this would be purchase of primary residence, the fact that he is buying the other half of a house that he already owns half of seems irrelevant.

Any input would be greatly appreciated.

Suppose you have a calendar year small db plan that terminates June 30. Does that automatically change the plan year end to be June 30?

Is there ever a case where you determine the cost for the short year (Jan 1 through June 30) but file the 5500 for the plan year Jan 1 through December 31?

Let's see if anyone visits this part of the bulletin board.

I'm taking over (of course it's not my fault) finishing off the admin for the final year reporting for a terminated DB plan

The assets/benefits have all been distributed in Dec 2003--and all participant disclosures, documentation and benefit calculations look in order. 1099R's were filed.

However, the Plan apparently never notified the PBGC as the file contains no evidence of Form 500, or EA-S, or a 501.

There are/were only 3 participants in this plan and the annual PBGC premium was $57. Last filed in July 2003 with PBGC-1 form.

Any ideas on how to fix the lack of PBGC filing?

DB plan permits AP's interest to be paid to AP's beneficiaries, be forfeited to the Plan, or revert to Participant if AP dies prior to commencing benefits. Original QDRO provided that those benefits would be paid to AP's "designated beneficiary in accordance with the terms of the Plan." AP died without having completed a beneficiary designation form and Plan has determined that since AP failed to name a benficiary AP's benefit therefore reverts to the Plan.

Can an amended DRO be entered and served on the Plan to provide that if AP fails to designate a beneficiary (or none is alive at AP’s death), the benefit will revert to Participant? Does the Plan have to accept the DRO and determine whether it is a QDRO?

I am working on a plan that fails the 12/31/02 ADP test. Since we are now past 12/31/03, I had suggested either a QNEC or a contribution equal to the amount of the excess deferral distribution plus earnings would need to be made to the NHCE's in order to keep the plan in compliance. Following is the response I got from the administrator...

"In doing some research on how to handle this, our position is that we can use the sponsor's own remedy to correct the failure. The 2 suggested methods you mentioned are NOT required to be used if SCP is being used for correction of an operational failure. Therefore returning the excess amount and earnings to the participant/s and paying the excise tax would be the chosen remedy. Supporting this choice, is the fact that the % of assets is small" Also noted is the fact some of the HCE's have cashed out their accounts as taxable distributions.

Does this reasoning make any sense?

I would appreciate any input.

Ineligible expenses paid from Plan. Employer to make a restorative payment plus lost earnings. Lost earnings in this case must be calculated using the DOL 6621(a)(2) "underpayment rate" approach (i.e., applicable federal short term rate + 3%). That much has been determined - but I don't have a clue as to how to actually do the calculation.

Suppose, for purposes of this example, $10,000 was incorrectly paid from the Plan January 2, 2004 and repaid by the employer July 15, 2004. Do I calculate using each month's annual AFT (+3%)?

For example, January 2004's short-term annual AFR was 1.71% Is the calculation $10,000 x 4.71% / 12 = $39.25? Do this for each month and add up the pieces? Or what?!

Thanks for any and all responses.

(Read a quote last week that seems to apply- at least in my case: "There is often a wide chasm between reading the map and hiking the trail."!)

Help I started a Roth IRA about two years ago when filing my taxes and then forgot about it. Is it still out there? If so where can I find out info on it ?

A potential client has what sounds like a 412(i) plan. I'm told its a DB plan funded entirely with insurance. The new investment rep wants to keep it as a DB plan for the next 2 years before eliminating it and starting a 401(k). Between now and then however, he would like to relace the whole life policies with term policies, and use the cash value from the existing policies to invest in non-insurance related products (most likely mutual funds).

There's a lot going on here and I realize that BLink is not the place to sort all of this out, but if you have a good reference place to point me at regarding how to go about getting rid of insurance in a fully insured plan (eg, terminate the plan, amend it, do the participants get distribution options, etc) I would appreciate it. Maybe pointing out some obvious hurdles that have to be jumped would be helpful as well.

Thanks for your help.

A company has a 401(k) plan in place that covers all eligible employees (ie, no excluded classes of ee's). The owner participates in the plan. Owner is now interested in knowing whether a separate plan can be designed in which he is the only one who is eligble/ benefits from it.

Are there any obvious solutions to this situation? Would there have to be other HCEs in the 401(k) plan in order for this to have a chance at working/combine both plans for testing purposes? Finally, would 401(a)(26) problems prevent a DB plan from even being considered as a solution?

Thanks for any comments.

Help! I am working with an auditor for the first time on a mutual client's 5500 form (over 100 parts. - long form - audit required). He is telling me that the 2003 ADP refunds MUST be put on the liability line on the 5500 form. We have always reported the ADP refunds on a cash basis in the year they are distributed. He says that if they are distributed before March 15th, then they have to go on the 2003 5500 form as a liability. I do report the contributions for this plan on an accrual basis, but have never done that with the refunds. I reread the 5500 instructions and don't seem to find a concrete answer. My feeling is that it could be done either way...Any opinions appreciated!

I've read the DOL Advisory Opinion dated September 8, 2003 regarding the use of profile prospectuses to meet 404© requirements. I've also been to the SEC Web site to clarify the meaning of a profile prospectus. This may be a silly question, but must the profile prospectus be produced by the mutual fund company? Could a 401(k) administrator produce profiles for all of their publicly traded fund offerings as well as their proprietary funds? This has been proposed at my place of employment, and while nothing I find seems to preclude it, I am concerned that some of the references to the "most recent prospectus available" as either profile or 10(a) might indicate that the profile must come from the mutual fund company. After all, if the administrator can create a profile whenever he/she wants, wouldn't that always be the most recent version?

Any thoughts?

There is some great advice on this website. Thanks to all who contribute. I am a 33 year old married mother of 1. My husband and I are just getting into the investing game, a little late, but better than never. My husband has a ROTH IRA and some mutual funds with Primerica. Now, it is my turn.

I would like to open a ROTH IRA, but I am not sure with who... I've heard Fidelity and Vanguard. My husband is with Primerica, don't know anything about them except his financial lady is pushy... The confusing part is once I open an IRA I've read that I have to choose what to put in it and that is where it does not make sense to me. My husband has a ROTH AND mutual funds, so I don't get... How do I know what to choose?.... who charges the lowest fees?... do all companies charge a % rather than a flat fee?....I'm low risk because of my mother (nickle machines in vegas!), but have been reading that I should not be too conservative. I still have a good 20-30 years till retiring.

I also have a 401K plan at work that I have not started. My company does not match anything; they just offer it. Is it worth it?... I know you absolutely CANNOT touch it without penalties, right? The money does come straight out of my check and I wouldn't spend it because normally if I have money I'll spend it!

I'm 33 and married with 1 child and 1 step-child. We are going to purchase a home by the end of the year. We have a savings balance of about $10,000. I have about $500-700 a month to invest. I do know that I should put the full $3000 into the IRA which means I have already paid taxes on the money, right? Ugh... I am such a beginner. But I know it is so important just to get started!

My husband and I are opening a joint savings account should I open an ING Direct 2.1% account rather than just a savings?... I know your "portfolio" should be diverse, but I don't even know where to start. We have a Suze Orman book that I am trying to read, but I have a baby and work full-time oh... and have a husband to take care of so time I don't have. Recommend any quick read books or magazines... ANY help would be very appreciated. Thank you so much!!!!