I have a U.S. plan that has a foreign company as part of their controlled group. The plan does not exclude foreign individuals as a class. If a foreign national from the foreign company transfers to the U.S. company, do you need to count the service with the foreign company for eligibility and vesting.

Example: Foreign individual worked for foreign company for 6 years and transfers to the U.S. company for 3 years. The plan has a 5-year vesting schedule. Do you count the 3 years service in the U.S. or 9 years combined U.S. and foreign service for vesting?

It appears you would count the foreign service according to Labor reg. 2530.210(d) & IRC 1563(a) [1563(b) carves out foreign nationals; 1563(a) does not].

Additionally, if a U.S. individual transfers to the foreign company, can you count the foreign service for benefit accruals under the U.S. plan?

I appreciate your thoughts. Thanks.

Have reviewed most of the prior posts in this section, but did not come accross exactly my situation. If addressed previously, just point me to the post.

Have a 401(k) sponsored by an LLC (taxed as a partnership). The partners (6 of them) would like more flexibility in designating the amount of their individual "profit sharing" contribution amounts - i.e., some would prefer nothing, others the maximum available, still others somewhere in between. Sound familiar?!

Can this be accomplished via "class allocation", with each participant constituting his/her own class? Or, since the amount of a partner's profit sharing contribution directly affects his/her "compensation", would such profit sharing contributions for the partners be "deemed deferrals"?

Also, even though the "employer" would technically be designating the individual profit sharing contribution amount for each partner, we all know that, in reality, each partner is making the call.

The plan is already a 401(k), so the "deemed CODA" aspect didn't seem to be an issue, but since the common law employee participants do not have the same ability to designate the amount of their profit sharing contribution, I suspect there might be other issues with which to contend.

Thanks for any any all comments.

A plan has eligible employees, still on payroll, but worked no hours and earned no compensation for the 2003 plan year.

Question - are these people counted on 7a of Form 5500 as "active participants"? For 2003, it won't affect the filing of Sch H vs. Sch I, but may have an effect in the future.

Opinions?

Can a Governmental 457 plan set up a mandatory contribution period even after retirement? I've looked through the code but could not find anything applicable to this. The client would like to stop making contributions to the plan and roll the money over to an IRA in her name. Again, the client is 52 years old and retired.

If a new 401(k) plan is established 7/1/04, can you still use the first year plan adp non-highly compensated 3% deferral rate for testing? Would it need to be pro-rated down to 1.5%?? Would we need to make the plan effective 1/1/04 to use the 3% rule?

Any thoughts would be appreciated.

Can I interpret Rev Rul 2003-102 to allow reimbursement under a medical FSA of over the counter remedies use to alleviate or treat dental injuries or illnesses, such as a numbing agent?

I have a prospective client that has two HCE non-resident aliens with U.S. income that they want to benefit. Does anyone know of any problems or situations I should be aware of in regards to non-resident aliens?

Can anyone help me locate the thread I'm sure I saw on the topic of records retention for ERISA plans? I believe it cited something in ERISA on this topic. Cite from IRS?

In reviewing old files, I'm finding our organization has records that date back well over 20 years and I'd like to document that it's okay to shred them now.

Somehow keeping records for the current year plus 10 prior comes to mind?

Thanks for any help you can offer. What does your organization do about retention of old allocations, documents, distribution forms, etc.

Does anyone know whether an SPD for a self-funded plan is required to have HIPAA language?

Is there any maximum time once notice has been given?

I've been asked to administer an existing plan of an S-Corp. Here's the rub: its a rock and roll band. The CPA has been treating the band members as Independent Contractors.

I've been mulling this over and more and more am coming to his way of thinking. Looking for any input.

What obligation is imposed on the plan sponsor to notify terminated vested individuals that they are entitled to a distribution from the plan? I realize that the overriding 70 1/2 distribution rules are out there, but what is the plan sponsor's obligation to an individual prior to turning age 70 1/2 but after the individual has terminated to inform him/her of the benefit due him/her and the availability to receive a distribution of such amount?

Thanks,

What obligation is imposed on the plan sponsor of a church plan to notify terminated vested individuals that they are entitled to a distribution from the plan? I realize that the overriding 70 1/2 distribution rules are out there, but what is the plan sponsor's obligation to an individual prior to turning age 70 1/2 but after the individual has terminated to inform him/her of the benefit due him/her and the availability to receive a distribution of such amount?

Thanks,

We have a participant who has submitted a request to us to determie the eligibility of a portable 'whirl pool' bath for Plantar Safciitis. We think a foot bath could possibly pass, but believe he is attempting to get a hot tub passed by us. He does have a doctors note saying that the purchase of a 'whirl pool' is medically necessary to treat his condition. NO other details. Anyone want to comment??

Can anyone help or refer me to the proper sources for the following:

We are a company of 130 employees and we have a self funded plan.

Due to costs, we are looking at different plans of action relating to dependent coverage.

Can we terminate the spouse of an active employee when they reach age 65?

Plan is top heavy for 2003. Eligibility for 401k is immediate but a two year wait for PS.

Top heavy was given to all ee's who were eligible for 401k. This resulted in minimum gateway allocations above the 3% top heavy minimum. Can a plan at this point carve out the otherwise statutorily exclused ee's (i.e.-age 21 and 1 yos) and only provide minimum gateway increases to those who would have met the 1 year and age 21 during the plan year? If so, does the plan document need to contain language to limit top heavy minimums to only those who meet IRC 410(a)(1)?

A Single employee corporation wants to adopt a new DB. The sole shareholder and participant previousely sponsored a DB under which he accrued a benefit of $5,000. Under the new plan his salary will be $10,000/mo and his projected benefit will be $10,000.

Under the new plan we must adjust for his accrued benefit under the prior plan for the 415 100% of pay limit.

Question: suppose they terminated the prior plan in 2003 with insufficient assets (i.e. the shareholder participant accepted a major reduction in benefits). For purposes of adjusting his benefit under the new plan, must we use $5,000 or the reduced equivalent of his benefit.

Thanks much.

We just picked up a client and discovered that April 1, 2004 was the required begining date for the owner. When we told him about this last week it was the first he had heard of it.

We also recently discovered that he accidentially transfered about $40,000 from the defined benefit plan trust to a joint account with his and his wife's name on it in January 2004.

It looks like this $40,000 transfer is enough to meet his first RMD.

Since the transfer was a mistake at the time, there was no benefit election made at the time.

Obviously everyone would like to treat this $40,000 transfer as the owner's first RMD. Can we do this?

Company adopted a SIMPLE plan with Custodian A in 1999. May 2003 plan was transferred to Custodian B. Does the 2-year rule regrading the 25% penalty for early withdrawals start with the employee's first date of participation with Custodian A or does it re-set when the plan moved to Custodian B?

For an IRS submission, the IRS agent is telling us that the plan submitted was not timely amended for the Taxpayer Relief Act of 1986. When was the amendment to be signed to comply with TRA '86? I know the year was 1994 but I need a specific cite.