I have a Plan which was effective 1/1/03. Eligibility to defer is immediate upon date of hire. In the 2003 ADP test there is 1 HC who is the owner and 9 NHCs. The test fails! This is a new Company in which the hire date of the owner is 10/1/02. One ee was hired on 11/1/02 and the other 8 ees were all hired on various dates in 2003.

Can I disaggregate the otherwise excludable NHCs from the ADP test in accordance with the early participation rule under 401(k)(3)(F)? If I do this, the only satatutory employees left in the ADP test will be the one HCE (the owner) and therefore the ADP test will pass. This seems to be ok, yet I feel a little uncomfortable doing it.........am I missing something?

assume there is a fee charged to participants for distrubutions and the money is netted from the distribution. eg. $5000 - $75 = 4925. what is the correct amount of the distribution that should be reported on the 1099. i belive it is still 5000 even though the participant only receives 4925 because he has dominion and control over the entire amount. any one agree or disagee?

Can anyone point me to information on the delivery of participant statements in an electronic format? Do you have to give at least one paper statement per year, or can you communicate all statements electronically?

Also, I am not sure where to locate the DOL's safe harbor guidelines regarding electronic communciation. Can anyone help?

Client has a 401(k) plan with a cross-tested profit sharing contribution feature. In 2003, the owner makes excess deferrals (total deferrals of $18,000 - don't ask how), but these excess deferrals are returned prior to 4/15/04. The owner then contributes a profit sharing contribution for 2003 to max himself out under 415. When running the 401(a)(4) non-discrimination testing, are the excess deferrals that were returned considered in the test? As this seems to result in a maximum annual addition of $34,000 ($40,000 - $6,000), it doesn't seem fair.

A Company with an ESOP wants to redeem all of the ESOP's stock and also all the stock held by 17 outside shareholders. The total redemption will be less than $5,000,000. Is there an exemption that applies?

I am looking to see if there are any significant changes to the NIP before an IRS filing. My current form was originally authored in 1996 when we still filed with each local Key District Office, and when the advance dates were 7 to 21 days.

Any format (text, WordPerfect, or MS Word) would be fine.

Can a terminated participant "contribute" his life insurance premiums into a qualified plan? In the past, the premiums were paid from his existing account in the trust, be this year, he deposited his premiums into the trust.

We have a design-based safe harbor with a 3% employer contribution to all employees. We have no matching contributions. OUr profit-sharing contribution is 100% vested. We are a partnership.

If our plan is top-heavy, will we automatically meet the remedy (of a 3% employer contribution to non-key employees) due to the 3% safe harbor contribution? This contribution appears to go only to non-keys because the partners do not get a 3% contribution and I think only partners could be considered keys.

I assume we will not meet the remedy due to the profit-sharing contribution because that goes to everyone (including partners).

THANKS!

Divorce decree awards wife 50% of IRA assets to wife.

Husband refuses to sign instructions to transfer assets to wife’s IRA.

Is husband’s signature required? Or can wife sign instructions?

We need signature for instructions on how to breakdown the sharing of the assets .

Thanks in advance for your assistance

403(b) custodian document defines a “participant” as someone who is currently employed by the employer and says that a “participant” may take a loan from the 403(b). Does this exclude former employees from taking a loan from the 403(b)? I know that some 403(b)s allow former employees to take loans .

Thanks in advance for your help.

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?