The employer wishes to make a 25% contribution to his Profit Sharing Plan.

There are 8 participants, 2 of whom have $200,000 in compensation. Because they are limited to a $40,000 contribution for 2003, or 20% of compensation, does this mean that in order to have a uniform allocation all participants must then be limited to receiving a 20% contribution?

Two of the other participants are HCEs by the way, but the 25% limit would not affect them.

Is the adoption of a new plan considered a plan amendment for purposes of the 2-year restriction on deducting the unfunded CL for HCE's, or can a plan deduct up to the total unfunded CL in its first plan year?

Thanks for all of your help!

participant in directed 401(k) account locks himself out from access to misplacing of security password. Upon contacting investment firm and Hr dept he is told that new password will be issued in two days via mail. No other method of transfering funds is given to participants.

Is this covered by Sarbanes Oxley act? Participant will be locked out of hte market for at least four days.

I have medical coverage through my spouse's employer - the carrier is CIGNA. I tried to log on to their MyCigna.com website using my identifying information and was unable to get any information about my claims, etc.. When I called for tech support, I was told to have my spouse register for the site, and then he would have access to my information.

My understanding is that since I am an adult, he can not have access to that information with my authorization. I believe that he should have access to our child's information as his dependent.

Am I mistaken?

If a nonqualified plan offers several distribution options, how far in advance of a distributable event is the participant required to make the election as to distribution option? And where can I find guidance on this?

Thanks.

3% QNEC to NHCE used to pass ADP. However, plan is top heavy and there are 2 non-key HCE's who must receive the 3% minimum top heavy contribution. The QNEC can be used to satisfy the top heavy contribution. Does the top heavy contribution to the 2 HCE's have to satisfy 401(a)(4) by excluding the QNEC to the NHCE's?

I have a client that is considering adding a match and vesting to their non - ERISA 403b or converting to a 401k. They have 250 employees and no HCEs.

Either plan would need a document and discrimination testing etc. The difference, as I see it, would be that the 401k would need a full 5500 and plan audit where the 403b would have the short form 5500 and no plan audit. Am I missing something?

I have a client that has a retired participant who refuses to cash her pension checks. She thinks someone will steal her money and doesn't trust anyone, including her family members. She has no bank accounts so direct deposit is not an option.

Her family has not been successful in establishing a power of attorney.

However, we were informed that her son was recently assigned Representative

Payee by Social Security.

I ran this past several attorneys but none of them were familier with the term "Representative Payee" or their authority.

Can the Representative Payee cash the pension checks? What would happen to the uncashed checks if/when she dies? Has the Plan met it's obligation? Could/should they give her cash?

Can an individual with more than one employer, with each employer offering a 401(k) plan to their employees, contribute the maximium to each plan? Employers and plans are non-affiliated. Does the IRS have an aggregate maximium contribution to 401(k) plans in any given year?

Coming soon to a Transfer Agent, Clearing Broker, or Fund Complex near you, restrictions on accounts with short term trading fees.

At least one fund complex and one clearing broker will be shutting off trading ability unless TPA's with omnibus accounts certify that they can track, collect, and remit short term trading fees. Latest date I've heard is end of the year but it could be sooner for some Fund complexes

I define omnibus accounts as one account/plan or one account for the business as opposed to individual accounts for each participant.

What I have not heard is when the major vendors of recordkeeping systems plan to deliver functionality for short term redemption fees. I'm interested in hearing from people working on the Schwab RT, OmniPlan, Wystar, and Relius platforms. Have you heard anything from your vendor?

Calendar year plan

For the current 2004 plan year, the current definition of compensation is total compensation.

however, earlier in 2004, the employer gave out bonus checks, but did not take deferrals from the bonus checks, and according to the definition of compensation, they should have.

Can the plan sponsor retroactively amend the plan to 1/1/04 to not include bonus in the definition of compensation?

If not, how do they correct the fact that they did not do deferrals off of bonus?

I have a client who would like to freeze their DB plan; but prior to the freeze they want to amend the plan to provide 3 additional years of service for any participants with combined age plus service in excess of 80.

Are there any potential non-discrimination issues here ?

Can anyone think of any problems of any nature with this prposal ??

I have a client who is evaluating their DB plan that provides a low level integrated formula. Can anyone direct me to such a survey? I see lots of 401(k) plan surveys, but not many like this on DB plans. The client is anxious for the information so any help will be much appreciated.

Can an ERISA argument be brought into a state court or are they all remanded to the Federal Court System? Question in mind is a prohibited transaction: loan to prohibited party. Argument is valid, but plaintiff is trying to coerce client with holding up a summary of judgement in a state court with this "threat". I would think the state court would at worst hold over the summary of judgement until the ERISA suit is heard.

Am I right?

We have a 401(k) safe harbor plan with the basic matching formula. Employer is having a good year and is considering adding a discretionay match, retroactive to the beginning of the Plan year. The basic match and the discretionary match total would not exceed the enhanced match limits.

If not for being a safe harbor plan, the plan would be top heavy. Only deferrals and safe harbor matching contributions are being made to the Plan. Would the addition of the discretionary match cause the plan to be top heavy? Is ACP testing required?

I have acquired a plan that was poorly designed. It is a 401(k) safe harbor with the SHNEC. The document currently contains no matching provisions. Is it possible to add discretionary matching provisions without losing safe harbor status. I thought so initially and then I starting to go back and read through Notice 98-52 and now I lean towards it not being allowed. I reference the content requirement:

The content requirement of this section is satisfied if the notice (1) is sufficiently accurate and comprehensive to inform the employee of the employee's rights and obligations under the plan and (2) is written in a manner calculated to be understood by the average employee eligible to participate in the plan. For purposes of the preceding sentence, a notice is not considered sufficiently accurate and comprehensive unless the notice accurately describes (i) the safe harbor matching or nonelective contribution formula used under the plan (including a description of the levels of matching contributions, if any, available under the plan); (ii) any other contributions under the plan (including the potential for discretionary matching contributions) and the conditions under which such contributions are made; (iii) the plan to which safe harbor contributions will be made (if different than the plan containing the CODA); (iv) the type and amount of compensation that may be deferred under the plan; (v) how to make cash or deferred elections, including any administrative requirements that apply to such elections; (vi) the periods available under the plan for making cash or deferred elections; and (vii) withdrawal and vesting provisions applicable to contributions under the plan.

Would you agree that the match cannot be added to keep safe harbor status?

Regarding the yearly fee for maintaining a Roth IRA and the expense-ratios for mutual funds within a Roth IRA, do they have to be paid for from within the Roth IRA, or can they be paid for from outside of the Roth IRA? I was talking to a Fidelity representative who said the former, but the application forms for Tocqueville say that they can be paid for with money from outside of the Roth IRA.

I realize that SEP-IRAs are mainly goverened by IRS rules, but what specific ERISA sections also apply to SEPs?

Is it problematic under the “designed to primarily invest in Employer securities” standard to convert a stock bonus plan currently comprised of employer securities to the extent of 31% of its assets (and increasing) to an ESOP?

Can we obtain a DOL Advisory Opinion or PLR to give us greater assurance?

The owner in a cross-tested plan will attain the plan's NRA (65) next year. He has no intention of retiring at this time. What impact does this have on the non-discrimination tests & his EBAR? Will he still be able to contribute the max if the tests allow? This seems like it should be pretty easy, but I'm sensing there may be issues because he is 65. Any input appreciated!