I am evaluating proposal software for my new firm and am checking into Relius (as that is our Admin Software) and Pension Online. Should I be evaluating others as well?

I am not sure of the cost of Relius or if it is integrated into their administration software. I am printing the information to read through and have requested for a representative to call me to view a demo.

The Pension Online proposal software costs $995 per year. However, there are some flexibility issues per their website. For example, you cannot enter family relationships (you have to code everyone as 100% owner), deferral % have to be entered (not dollar amounts), matching amounts are calculated not entered, at a maximum you can designate two HCE rate groups for cross testing (the system default is one group for all HCE's - if you want an additional group you have to code each person in the census, you cannot allow an HCE to waive participation, ...

Thanks for your input,

Stephen

There's a debate going on about a question to which I don't know the answer, so I'm staying out of it. But curious. Thought some of you may have an opinion...

Corporation with 2003 fiscal year makes contribution in February of 2004, intended to be a deduction for 2003. Accountant files 2003 tax return and forgets to take the deduction. Question is, can they file an amended return for 2003 to claim the deduction?

1 faction says yes, don't be ridiculous, of course you can. 1 faction says no, the corporate return can't be amended to claim the deduction for 2003. Neither faction is presenting any cites or anything to reinforce their opinion.

I have no firm opinion, although I went on the IRS forms and publications website and gave a quick scan through the 1120 and 1120x instructions. There was nothing that jumped out at me that appeared to prohibit filing an amended return to claim the deduction for 2003. And frankly, I can't see any common sense reason why you couldn't. Anybody know the answer to this? Thanks.

It doesn't look to me like the delayed effective date applies to the QPSA changes? The announcement doesn't mention QPSA at all. And it says that 1.417(a)(3)-1 is delayed "with respect to QJSA". Does anyone have an opinion?

We are reviewing a plan document that has four or five "slap-on" amendments. I recall seing something somewhere that a plan sponsor must restate a plan in its entirety after the plan has been amended a certain number of times. Can anyone confirm this with a cite?

Has anyone heard that these regs have been postponed to be effective for annuity starting dates in early 2006 instead of 10/1/2004? I've been told by an attorney that this is the case but can not find anything concrete online or otherwise.

Question:

What is an employer to do if they made a rollover distribution for an terminated employee over the age of 70 1/2 instead of making the Required Minimum Distribution????

Thanks in advance for your comments.

Fred

If a qualified plan has frozen their assets (no more contributions), but is not forcing the participants to remove their funds, is the answer to Schedule H, 5a yes or no?

Employer in a controlled group sponsors a 401(k) plan. The (k) plan is the only plan in the controlled group and the employer is the only participating er. The only contributions being made to the plan for the testing year are (k) before tax deferrals.

The plan fails the ratio test under 410(b). So we move on to the nondiscrim. classification test / average benefit test. The plan satisfies the nondiscrim. classification safe harbor but we are having trouble determining the average benefit percentage for each EE.

1.410(b)-5(d)(2) says only employer provided contributions are taken into account in determining the avg. ben. % and "employee contribution" are not taken into account. What is an "employee contribution" for purposes of this section ?

If employee contributions include (k) deferrals, it seems to me the plan satisfies the avg. benefits test because all ee's would have a 0 avg. benefit %, and 70% of 0 is 0. If "employee contributions" has the traditional definition of after-tax deferrals we have a problem.

Any help is appreciated and sorry for long post, but the facts always help.

Can anyone share, from a practical standpoint, how they handle COBRA continuation coverage in connection with an EAP? For example, do you send a former employee a notice and require the employee to elect coverage under the EAP? If the former employee wants to be covered under the EAP, do you collect the premium amount from the employee? Because of the manner in which most employers pay for their employees to receive the benefits from an EAP, I'm not sure how practical it is to collect premiums from former employees who want to be covered. I appreciate anyone's thoughts!

I've always understood that a restricted HCE in an under funded DB plan could obtain/post a bond to cover his benefit in the event of a "pre-mature" plan termination so the plan would have recourse (presumably against the bonding company) if under funded at plan term date. Is this a realistic avenue ? Does anyone know of any insurance coverage that would offer such a specialized bond. I've seen some type of IRA-escrow account used in a situation like this, and also a segregated account (within the same plan), but have never pursued the bond option until now. Any thoughts or opinions are appreciated.

A client of ours is telling us that loan payments made through payroll deduction are made "pretax" just like a 401k deferral. The client has said that she "researched" the issue and we are asking for her research but I wanted to know if anyone else has heard of this.

We have a client that is a cooperative (a citrus grower's association) that sponsors a Profit Sharing Plan. One of the officers of the cooperative is 701/2 this year. The member farms are the owners of the cooperative so there is no ownership by any individuals. This officer also happens to have ownership in one of the member farms. Is he required to take an RMD from the Plan? Is it dependent on whether or not he owns more than 5% of the cooperative as a member?

Treasury Reg 1.72(p)-1 state that a loan agreement does not need to be signed if the agreement is enforceable under applicable law w/o being signed. If a loan from a 401(k) account is disbursed, does the employee's signature on the loan check constitute a legally enforceable agreement in CA?

I am beginning to study for the DC-2 exam. I have a copy of the 2004 Study Guide and have a question about the Practical Example of Concepts Learned in Chapter 2. Particularly, page 40 - Nonelective component, number 2 "Number of Employees who do not satisfy age/service as of 1/1/03 or 7/1/03". I think the employees would be HCE4, NHCE4, NHCE5 and NHCE6. The example does not include one of these NHC. What am I missing??

Any assistance would be helpful. Thanks!

Bonus plan calls for distribution of cash value of bonus by December 31 of each year, however company CEO reserves the right to defer bonus for up to 3 years. Forfeiture during that time occurs if employee leaves employment or violates confidentiality and non-solicitation clauses of employment agreement.

If deferrals is wholly within CEO's discretion, is employee still required to enter into a deferral election with respect to the bonus?

The Women's Health and Cancer Rights Act requirements include benefits for all stages of reconstruction of the breast on which a mastectomy has been performed and sugery and reconstruction of the other breast to produce a symmetrical appearance. My question is, once symmetry of the breasts is achieved, does a plan have to cover additional surgery if the member wants to change breast size?

Sole Proprietor uses SSN for Schedule C. Do we need a new EIN for the 401(k) Plan? Thank you.

If real estate is purchased inside an IRA and there is a mortgage on the property can the mortgage payment come from outside of the IRA or must the payment come from the IRA?

A plan sponsor provides it's employees the option of deferring a percentage of compensation or an actual dollar amount. The employer pays the employee bonuses, vacation pay, etc. on seperate checks outside of the normal pay period schedule. For the employees that chose a percentage of pay deferral the employer does deduct the percentage on every check generated regardless of the pay period schedule. For the employees that chose a dollar amount deferral the employer is only taking the dollar deduction on normal pay period compensation and is ignoring the additional checks that include additional pay(bonus, vacation, etc.). Is the employer required to take the dollar amount deferral on all compensation/checks regardless of whether it falls outside the normal pay period?

If a governmental pension plan pays certain medical bills for disability retirees, would the payment of such medical bills subject the pension plan to the HIPAA privacy requirements? Any thoughts/discussion would be much appreciated.