Is there any need for a qualified plan to have an EIN? The plan's trust may need an EIN to report distributions (if there's no corporate trustee), but the plan wouldn't seem to have any need for one. But a faint bell rings in my head -- have I heard not too long ago that the IRS wants us to get EINs for plans? Or is that just another sign of advancing age?

Consider this factual scenario for a CONSTRUCTION industry

defined benefit plan.

Company A has two divisions (electrical and mechanical). They contribute

to a separate plans for this work. The electrical plan has significant withdrawal liability. Company A decides to sell their business to an unrelated buyer. Immediately after buying the company, buyer closes the electrical division.

Questions...

Does WL attach to the seller at the point of sale? They did not request a waiver or post the necessary bond.

Would the closure of the electrical division affect the answer? Under 4203 of ERISA, a construction industry employer may close his business without incurring WL so long as he doesn't reopen (non union) in 5 years. Therefore, absent the sale, the buyer would seem to be off the hook

Input is appreciated.

Is the correct code 8 or 9?

A client of mine is closing up shop and needs to terminate their 401(k)plan as of 8/1. Notices went out on 5/1. For the employees who were hired in April and fired in May, are they new participants in the plan (assuming the plan uses age 21 and 1 year)?

Are they counted in the adp test or top heavy tests?

Assuming that the plan fails one of the non-discrimination tests, would they get a contribution?

thanks for all your help.

Which is the correct code, 8 or 9? Is UP-1994 supposed to be synonymous with 94 GAR?

I have a nonprofit client that permits non-compensated directors on its Board to purchase up to $50K of life insurance through its group plan. Is this permissible? I thought that only "employees" could do this.

Does anyone know what statute applies to benefits for non-compensated directors on the board?

Are there are good articles on benefits for non-profit directors?

Thanks for any help you can provide.

I have a nonprofit client that permits non-compensated directors on its Board to purchase up to $50K of life insurance through its group plan. Is this permissible? I thought that only "employees" could do this.

Does anyone know what statute applies to benefits for non-compensated directors on the board?

Are there are good articles on benefits for non-profit directors?

Thanks for any help you can provide.

I have a client that adopted a "word-for-word" volume submitter prototype document for its GUST restatement of its cross-tested profit sharing plan. The document is a Corbel document. Because the document was "word-for-word", we did not submit it for a determination letter.

Now, the document has been amended to change the definition of compensation to exclude bonues, except those paid to hourly and administrative staff employees, and to the plant manager. In 2003, there were 2 NHCE's and 3 HCE's with excluded bonuses. In the 414(s) test, the ratio of NHCE's to HCE's was 124.7%. One of the 2 NHCE's with excluded pay is a new hire who will be an HCE in 2004.

My question: though I know you don't need to submit a document for IRS approval, we generally have done so for our clients in the past, and did submit all GUST restatements that were not "word-for-word". Should we submit this amendment for approval? What are the pros and cons? Can we submit on Form 6406 (we've never used this method before), or Form 5307?

I'd appreciate your comments.

Has anyone heard anything lately on legislation that would cap 401(k) participant employer stock holdings in 401(k) plans?

Have any of you or your clients put restrictions on employer stock owership by participants in 401(k) plans?

Thanks!

It just sounds too good to be true. Tell me what's wrong with these. Can the medical bills really be deducted and not be taxable.

1) A sole proprietor owns a hardware store. He establishes a medical reimbursement plan (MRP). His wife and kids are the only employees of the store. They (owner, wife, & kids) incur $thousands of dollars of medical bills, which they pay, and then the store reimburses them. The store deducts those medical bills on the owner's Form 1040 Sch C. The reimbursements are not taxable to them.

2)Same as 1)above, except the store is incorporated. He owns 100% of stock. All of them are employees. The corp deducts the bills. Nothing is taxable to them.

3)Same as 1)above, except the store is a partnership. He & wife are partners and the kids are employees. The partnership deducts the bills. Nothing is taxable to them.

4)Same as 1)above, except he has no employees. Can he have a MRP just for himself.

It seems to me that there is no discrimination, because 100% of all employees are allowed to participate.

I've received mixed answers on this, so I wanted some extra opinions.

Plan has minimum (& maximum) funding requirement for Plan Year ended December 31, 2002 of $300,000. Company funded $400,000 in September 2003 (and also reported $400,000 on 2002 Schedule B). Additional $100,000 was not deducted for Tax Return.

Is there a 10% excise tax on top of the disallowed deduction?

Also, can the additional $100,000 be deducted on subsequent Tax Returns (even though already reported on previous Schedule B)?

Company A is owned 95% by 5 individuals. Company B is owned 85% by these same individuals. Company B has one other owner, Joe, who owns the remaining 15% of Company B and none of Company A. This is a controlled group. Both companies are covered by one 401(k) Plan. Is Joe considered a key employee due to his 15% ownership in company B? I would love to have an official cite on this one.

Can an employer require its employees to undergo a health screening if there is no requirement that an employee do anything other than be screened? Meaning that if an employee has high blood pressure, he will get those results, but is not required to do anything about it? He can do something about it, and nurses will be available to assist if he so chooses, but the program doesn't require any such action. I don't see this addressed in the HIPAA proposed regs, but I may be missing something.

A business owner (friend) passed a name of a CLU along to me who he has been working with recently. They were talking investments and such and the focus later became looking at implementing a possible DB plan for the company. The CLU has told the owner that he is in fact an enrolled actuary and has offered his advice on some plan design issues. The owner asked me (a non-actuary, for sure) if I had ever heard of the CLU/actuary before and I haven't. I also don't think I should drop his name (yet) in this context.

Is there a central place where all approved, certified actuaries in the country are listed? Can I call or look up on the web such a list? Would I need an actuary number to even begun seaching for him? I have the phone number to the JBEA, but would that be inclusive of all actuaries, or would I have to obtain a list of all actuarial organizations and try to sort this out with them one at a time? Per the owner, he refers to himself as an "enrolled actuary" and uses the EA moniker.

The owner was somewhat comfortable with the CLU on investment advice but is getting a little suspicous when the talk turned to plan design and the CLU insists that he can do it all (ie, doesn't want anyone else involved). I'm a little curious myself now as well.

I have a client, a 100% S-Corporation owner. In 2002 he and his wife, an employee of the S-Corp, set up a 401(k)/Profit Sharing plan, and both made elective deferrals as well as receiving a profit sharing contribution. No Form 5500-EZ was filed, as assets were less than $100,000.

In 2003, husband and wife divorce, and as of 12/31/03, both of their account balances remain in the plan, and the amount of assets is still less than $100,000. Question: Is a Form 5500 (not 5500-EZ) required for 2003? I think it is, as the instructions to Form 5500-EZ do not address this issue.

Thanks for any replies.

Is it possible to maintain simple IRAs and a 401(K) Plan at the same time.

Thank you

Someone simply please confirm...

If the one who reached 70.5 is a 5% owner ( and of course wife is 5% as well by attribution ) there is no delaying the RMD... correct?

I have been looking into the rules that govern a 401(k) plan maintained by a Guam based corporation. I am finding that most of the same tax and ERISA rules apply, whether a plan is maintained by a US based domestic corporation or a Guam based corporation. For a Guam based corporation, certain documents, most notably the 1099-Rs, would need to be filed with the Guam tax department. However, it appears that the IRS Form 5500 needs to be filed with the US DoL. I was wondering whether there were any other special rules or caveats that apply. Thanks in advance for any insights.

does anyone know whether the rules are the same for guam as they are for PR?

An entity is leaving a controlled group and the account balances/assets in the 401(k) PSP attributable to the entity's employees are being spun-off to a new plan that the entity is setting up. Unallocated forfeitures from the suspense account are being spun-off along with the participants' accounts. Question: What do we do with the spun-off unallocated forfeitures? Do they go directly into the new account's suspense account (and are used pursuant to the terms of the plan)?, or must they be immediately reallocated among the participants in the spun-off plan. Thanks.