is it ok to use this option? Does anyone know if corbel's doc defines the testing age as NRA--would that then preclude you from using it? if not written that way--is relius relying on 401(a)(5)(f)(i)?

Sal's book says get determination letter before using--has anyone done that?

thanks

We have a 401(k) plan that is terminating and is in the process of distributing all the assets. At the beginning of the year, there were over 100 participants, 80 of whom had no account balance. By the end of the year there are only 37 participants. The assets are invested in a PSA. On Line 3 of the schedule H, there now is a line that states ' The opinion of an independent qualified public accountant is not attached because (1) The Form 5500 is filed for a CCT, PSA or MTIA; (2) ...(not needed).' Can I interpret this that the plan does not need to get an audior's report since the monies are in a PSA? Thanks for any insight.

Is the cost of a private room considered a reimbursable expense under a health FSA?

I have a plan that just gave me the correct birthday for a participant after everything has been done for the 2003 plan year including the tax return. Now the 401(a)(4) test fails. Am I correct that I can do a 11(g) amendment to give a contribution to one participant (100% vested) in order to pass the test?

Client has an employee who wants to make deferrals but not receive any matching contribution. Now I've heard it all! Seems he wants the current income the match represents.

Reading the regs and this board, it seems an irrevocable election would be required, and would therefore preclude deferrals.

Agreed?

This was news to me, but IRS Reg 1.401(k)-1(g)(2)(i) apparently allows a 401(k) plan with a non-calendar Plan Year to choose to define Compensation based on the calendar year. However, for purposes of ADP/ACP testing I don't see a similar opportunity to elect to look at deferrals (or employee/matching contributions) over the calendar year.

Am I interpreting the Regs correctly? Wouldn't this lead to unpredictable ADP/ACP test results if employees are hired late in the calendar year. For example, if a plan has a 7/1 - 6/30 Plan Year and an employee is hired 12/1, he would end up with a super high actual deferral percentage when dividing 6+ months of deferrals (12/? - 6/30) by 1 month of Compensation.

I have a new plan doing this and I'm not sure why.... Thanks!

Sorry for such a remedial question, but could somebody please take the time to explain the differences between the NPPC as calculated under FAS 87 and the pension expense calculated under ERISA?

Thanks in advance for any clarification.

How do you typically set the interest rate for plan loans to participants secured by a right of offset against the participant's account balance, and that requires payroll deduction payback. Assume a five year payback, level amortization each pay period.

It seems like prime plus one percent is the most common I have seen.

Have you seen any guidance from the DOL or IRS on how to determine a reasonable rate of interest, other than it must a rate that basically a commercial lender would charge on a similar loan.

An employer had a DB plan 10 years ago. The plan terminated and lump sum distributions were made. The employer puts in a new plan for 2004 and the owner is at his 100% of pay 415 limit. Retirement age under the new plan is 65 and 5 years of participation, so his NRA is age 78. He was 63 when he received the first distribution from the old plan. How is the 100% of pay 415 limit payable at NRA 78 computed, since the 100% of pay 415 limit is not increased actuarially after age 65?

1. Compute the monthly benefit from the old lump sum payable at the age it was received (age 63) and reduce the monthly benefit by it at any future age?

2. Compute the monthly benefit payable at the old plan's retirement age 65, and reduce by that same monthly benefit even if payable at age 78?

3. Compute the benefit as indicated in #2, but actuarially increase it to the new RA of 78 to use as the offset? Using AE from the old plan?

4. Other calculations?

Thanks for any help I can get.

My understanding is that safe harbor contributions are only required to be given to NHCEs and that they are permitted for HCEs. I also think that you can cap the safe harbor match to HCEs. How about giving the HCEs a less generous match than the safe harbor match (i.e., giving HCEs 25% up to 5%)? Would this still be considered a safe harbor plan if all NHCEs receive 100% up to 3% plus 50% for the next 2%?

We just took a money purchase plan from another TPA who allowed hardship distributions. The Plans legal council is advising a retroactive amendment of the MPP to a profit sharing plan allowing hardships. I don't think this smells quite right...opinions???

I am an employee of a company with some managerial duties. My employer is having an IPO that I wish to invest in. It would be a sizeable investment, but wouldn't approach 50% ownership (more like 3 or 4%).

I am generally familiar with the prohibited transaction rules, and it doesn't seem to violate any, but my IRA custodian wants me to sign a form removing all of their liability if it turns out to be a prohibited transaction. This is because it is a disqualified person is "an employer, an of whose employees are covered by the Plan." But the IPO should meet the definition of qualified employer securities in the exceptions.

Can anyone see any (other) problems with this investment?

Must employer contributions to a 403(b) plan be combined with employee salary-deferral contributions to a 403(b) contract for purposes of the $40K limit? The employer is a public university, so no employee controls the employer. Would your answer change if the employer plan was a 401(a) money-purchase plan?

Thanks,

Ken Davis

I'm doing the 5500s for a profit sharing plan for a doctor's office. He added a 412(i) plan for 2003 that someone else is administering and doing the wrap work, testing, 5500s, etc. My question -- on the pension plan 5500, for question 8a (pension benefits characteristics) do I need to use code 2D (Offset Plan) because of the 412(i) plan? Thank you.

but my notes indicate this amendment must be made prior to the end of the year you are testing? Can someone confirm?

Thanks

Jim

A self insured ERISA plan received an order from the local domestic relations court which requires it to cover a legally separated spouse as a dependent for purposes of eligibility. No minor children are involved.

The plan says legal separation is a COBRA event. Can the court trump the plan language? My belief is that the state order would be preempted and we should send the participant a COBRA notice. Any thoughts?

Can governmental 403(b)s accept contributions which are designated as severance pay?

If so, would they be considered employee or employer contributions?

If employee contributions, would they be subject to the 402(g) limits?

If possible, please include cites in response.

Thanks.

What are 410(b)(1)(B) ratio percentage fail-safe provisions?

Sorry if this is something so clear that I should know. Trying to determine on a individually designed document, if we should check yes that they should be included/

Thanks

Are earnings on contributions in a governmental 457 plan eligible for withdrawal for an unforeseeable emergency?

We would like to provide individual savings need statements for our 401k clients' participants. We want to estimate each employee's saving need using their salary, dob, current balance, employer match, other certain employer contributions if applicable, estimate of Social Security, etc. We are looking for a source to help us with this. Any ideas?