We have a QDRO that includes as part of the Alternate Payee's benefit, all future benefits accrued after the date of the order until the date the participant terminates employment. I have always thought that based on the language in the statute that a QDRO cannot provide increased benefits, that this is impermissible, however, I am now questing this thought. Does anybody have any insight into this? Are there any cases or rulings or guidance that specially states one way or another whether a QDRO can include future accruals from a db plan?

Thanks,

Do the QJSA rules and spousal consent requirement apply to 457 deferred compensation plans? Can a participant name anyone as his or her beneficiary? Thanks.

Say a participant reaches age 70 1/2 in 2003, thus RBD 4/1/2004.

He has accd ben at 12/31/2003 of 10,000 per year.

The participant will receive his annuity in annual payments.

For purposes of this discussion we will assume the employee does not accrue additional benefits and that his spouse is less than 10 years younger. And the employee must begin on 4/1 following 70 1/2, because he is a 5% owner and still an active employee.

My understanding of the RMD requirements are as follows.

1. He can receive a payment of 10,000 by 4/1/2004 for the 2003 year and a payment of 10,000 by 12/31/2004 for the 2004 year.

2. The regs say the participant can recieve an annuity over the life of or life expectancy of the participant.

Does this mean that instead of 1. above, the particpant can receive 10,000 per year over the life expectancy in one of the tables? So if the table has 27 years, the annuity of 10,000 would be distributed over exactly 27 years (r3egardless of when and if death occurs during that period)? And is it based on the uniform life table or the single life expectancy table?

3. ANd then I believe the regs allow for the accd ben to be converted to a present value, where such value is spread over the remaining life on the uniform life table, and the present value is recalculated each year.

So if PVAB were 200,000 at 12/31/03 and the life expectancy were 20, the payment by 4/1/04 (for 2003) would be 10,000 and then another payment of 10,000 would be made by 12/31/2004 for 2004.

And then the PVAB at 12/31/2004 would be redetermined and the RMD for 2005 would be based on the PVAB and life expectancy using the uniform life table as of 12/31/2004.

And is the PVAB based on the lump sum assumptions under the Plan?

Any views on the above interpretations and what others are available.

Thank you.

Can a 401(k) plan satisfy the requirements, as it relates to leased employees, of a safe harbor money purchase plan?

For example, if the (k) provides for immediate participation, the contribution is at least 10% of pay, no allocation conditions imposed on the contribution and it was 100% vested - would a safe harbor MPP actually have to be adopted? The only thing missing in the (k) plan would be J&S.

Employer A maintains a (k) plan and leases employees to Employer B. Employer B maintains a SEP and does not want to establish one for the leased employees. Employer A and Employer B are a brother/sister controlled group.

Thoughts/comments are appreciated. Thanks!

This is a plan using the safe harbor matching contribution and the employer is terminating the plan, or thought the plan was being terminated. The employer is being acquired in June. The safe harbor notice to participants for 2004 was not a "wait and see" notice.

Since the regs are proposed regs, the opinion is a plan termination prior to the end of the year is too aggressive and the termination date should be 12/31/2004. Has anyone successfully terminated a safe harbor plan midyear?

How do the new interest rates impact the calculation of the 415 limits???

Do we have separate computations for lump sums and forms of annuity??

Assume a participant is at the maximum benefit at age 62. The reduction to a monthly benefit payable at 55 is performed using (ignoring actuarial equivalent issues) 5% and GAR???

The lump sum value of this benefit is then computed using the 'new' 5.5% interest rate??

I thought the participant was entitled to the greater of the lump sum using actuarial equivalent or GAR94 and the 30 year Treasury rate. This lump sum was limited by the new lump sum limit using 5.5% for everything.

I thought this was pretty clear until we had a little discussion and in rereading the regulation it is not at all clear that the 5.5% is applied for the determination of the maximum benefit BUT just for the lump sum.

Any responses are appreciated.

For purposes of ACP testing.. how is the match portion of a catch up contribution supposed to be treated?

What if an employee exceeds the plan match limit b.c of a match on the Catch Up?

A portion of the plan assets are held in a REIT. Do I need to answer "yes" to question 3c on the Schedule I? Or is this only for real estate that the plan has control over?

Thanks!

409(e)(3) requires the pass through of voting rights with regard to certain transactions. If you have three shareholders, and one is an ESOP, and there is an agreement to purchase all shares by a buyer, this doesn't appear to be a "merger, consolidation, ..." and require pass through voting , or does it?

a safe harbor match satisfy top-heavy requirements alone? or is an additional contribution required?

Thank you in advance for guidance:

Is it permissible for an employer to make non-elective contributions to employees based on seniority, where the employees with the greatest seniority will receive a larger percentage contribution than those employees who are newer to the not-for-profit organization?

The employer wishes to provide appreciation to senior staff members as well as encourage newer employees to remain with the organization, but the employee is concerned about possible discrimination to HCEs.

Currently, there are very few HCEs and a great number of NHCEs, but the HCEs tend to be those with seniority.

Any help or guidance is appreciated.

For example, as a viatical settlement.

When the insured dies would the money just go into the Trust and then be investment gain, taxed as ordinary income when distributed?

I just received a plan that purports to be a 457 (f) plan of deferred compensation. The exhibit to the Coprorate Resolution setting up the Plan states that the Company will set up an account with $1,000,000 in it in order to pay the deferred compensaion of participant P. D.. The company will purchase $1,000,000 in deferred annuities in the company's name and pay P.D. the earnings of the $1,000,000 at the vested intervals of 5 yrs-50% and 10 years-100%. If P.D. quits in less than 10 years, then all is forfeit.

Is this plan funded or unfunded?

A client was just told by his financial institution that he overcontributed to his Roth IRA for 2003. It is past his tax filing date. I understand that he can apply the excess as a contribution for 2004, but is the 6% excise tax still applicable?

Our 401(k) uses safe harbor for hardship withdrawals. For requests made on account of medical reimbursement, is there any timeframe in which the expense must have been previously incurred? For example, can a participant currently (May 2004) submit outstanding bills from services rendered in 2002 and early 2003? The plan document (Corbel non-standardized prototype) appears to be silent as to the timeframe in which expenses must be incurred, and our Administrative policy does not address. Any guidance would be appreciated.

A loan agreement provides that upon termination of employment, the balance of an outstanding loan will be offset. After the offset, if the participant's remaining account balance is $5,000 or less, can this remaining amount be cashed out?

The answer could be "Yes", because the look-back rule for determining cashouts is gone. Do the offset in May and then pay the cashout in June.

The answer could be "No" because under Reg. 1.72(p)-1, Q&A-13(b), an offset is an actual distribution for purposes of the Internal Revenue Code. If that is the case, then the participant can't be forced to take out a distribution which is less than $5,000.

Any thoughts (please!!) on which is the correct answer?

We have a design-based safe harbor 401(k) Profit Sharing. It requires a 3% safe harbor employer contributions and permits an annual discretionary profit sharing contribution. WHat tests do we need to perform? I believe we need to test for Top Heavy status because of the discretionary contribution. What does this entail and is there anything else we need to do?

I'm getting conflicting answers--thanks for the help.

Is the 15 day notice required in the case of an incorporated 1 life DB plan that employs only the owner?

Clearly an "owner-employee" plan is exempt but our legal people are hesitant to extend this to a corporation due to some concern over some part of regulation 2510.3-3(b).

Has anybody looked at this?

I know the EOB says that plans eligible for 5500-EZ are exempt and the EZ instructions clearly allow such filing by a 1 life owner employee corporation so that is one bullet in my gun. I'm looking for more ammunition. Thanks for any help.

Assuming a 401k plan passes 410(b) and 401(m) testing, could you design a plan so that certain groups of employees receive one level of match while other groups receive a different level (i.e. group A - 100% on first 4% of comp. and group B - 100% on the first 2%)?

Plan sponsor is paying out terminated EEs. Broker is going to generate 2 checks for each EE being paid lump sum.... one is vested balance, other is withholding. The client is telling me that his regular bank will not receive the tax deposit. What are his options for making the tax deposit? (this financial institution will not make the deposit for him) Can it be mailed to the IRS with a coupon?