If the time stamp on your post is incorrect and if you care about that, you can change it at “My controls”- go to “board settings “ under options. I noticed that my posts were off 1-hour, which is now resolved by checking the “Is daylight savings time in effect?” box

Who knows, maybe this could serve as an alibi in an important case -(I watch too much court TV)

What does distribution code 2 mean on 1099-R.

I know it means early distribution...but what's the exception? I can't figure it out.

Thanks.

Two companies are owned by the same one individual. Both are maintenance companies and as such employ mostly lower paid workers with a handful of higher paid managers, no one reaching the HCE dollar limit however.

Company A employs a total of 131, including the owner. Company B employs 30, none of whom are HCEs.

The owner prefers to have two separate 401(k) plans, despite the fact that each has the same provisions, contributions, etc.

Each plan excludes participation by any employees except those of the adopting employer.

Am I thinking of this correctly?: Company A passes coverage with or without Company B. Without company B the NHCE ratio would be 130/160. Company B would pass coverage because, while the NHCE ratio is 30/160 the HCE ratio is 0/1.

Since the plans cover all the employees of the employer (Company A and Company B) separately I am assuming that I cannot use answer 3d on Schedule T? And that I must show the ratio test for each plan?

To take it one step further, if the manager of Company B does reach the HCE dollar limit and becomes an HCE, Company B will not pass coverage without Company A. The Plan would now benefit 1 of 2 HCEs and 29 of 159 NHCEs. I'm thinking I now need to aggregate the plans for coverage and also ADP testing?

Thanks for any clarification.

How would one go about becoming a paralegal with an ERISA specialization? Also, is one of the different paralegal certifications better than another? What would you expect an "ERISA paralegal" to do or where would they normally work?

I'm having a heck of a time understanding the practical application of the new proposed regs under 1.410(b)-6(g), probably because I'm unable to relate them to a real life situation. Perhaps some of you 401(k) specialists can help me out?

Suppose you have a 501©(3) organization, that currently sponsors a 403(b). Now the employer decides to offer a 401(k) as well.

Under (g)(2) of the proposed regulation, it says that employees of a tax exempt organization who are eligible for a salary reduction under the 403(b) plan may be excluded if:

(i) No employee of the organization is eligible to participate in the 401(k) plan, and

(ii) At least 95 percent of the employees of the employer who are not employees of the organization are eligible to participate in the 401(k) plan.

I note that (i) and (ii) use separate terms - organization and employer. But (i) and (ii) seem to me to lead you in a circle. First, you have to satisfy (i) that no employees are eligible to participate, then in (ii) at least 95% of the employees must be eligible to participate! But it distinguishes, in (ii) that the "employees of the employer who are not employees of the organization" must particpate. Now, what the heck does that mean, and what type of arrangement gives you employees of an "organization" who are not employees of the employer? Some sort of affiliated service group where they want to exclude certain employers within the group from participation in the 401(k)?

Hellllppppppp...... Thanks in advance, and my sincere congratulations to those who can make sense out of this.

A few years ago, after more than 5 years working for my company, I quit. At the time I had 3 weeks of vacation. Two years after that I was rehired, with a rate of 2 weeks of vacation. Two years after being rehired, I questioned why my earlier vacation time of three years was not being given to me. I learned that because my time not working for the company was greater than 6 months, I had lost the right to my previous vacation time of 3 weeks, and was now at the two weeks of anyone who has worked under 5 years. That is fair enough. Nonetheless, I explained to my supervisor that my vacation service had been deleted. He then requested that my vacation be updated to what I had before, 3 weeks. Per my request, he didn't ask that the first two years back working be restored, since I had not inquired about it during that time. Human Resources replied to my boss, an executive, that nothing can be done. My question is, is vacation a sort of qualified plan, where this would be breaking the rules, or can a request by an executive be subjectively denied by a human resources representative?

Another question on taking deductions.....in the case of a health or dependent care FSA which is elected by an employee during the latter part of their grace period (31 days from eligibility date), do most companies:

(a) amortize the goal based on the effective date and retroactively collect (pre-tax) deductions

(b) amortize the goal based on the next subsequent paycheck and begin taking those deductions with that paycheck

Example. Employee is eligible on March 1 but does not enroll in FSA until March 30 for 1000. In (a) the employee owes $100 per month and an extra $100 is collected on the April 15 payroll. In (b) the employee owes 111 per month with no retro.

In both cases, the participant would be able to claim expenses going back to thier effective date (or at least that is how we do it). However, have any of you heard of companies only allowing employees to begin participating when the first deduction gets taken? In other words, the employee in the example would not be able to claim expenses until April 1?

Sorry this is so complex!!

If an employer has an open enrollment period which is not based on the plan year, is there any reason the employer would have to either (a) file more than one 5500 for the year or (b) make any filings in addition to the 5500? It does not make sense to us that they would, but something in the back of our client's mind makes them think that if the enrollment period does not match the plan year, then two filings need to be made. This does not sound right to us. Any thoughts?

I'm wondering how the best way to structure retro deductions for new hires and change in status. Right now, we offer a 31 day period for the initial enrollment in our cafeteria plan. If an employee enrolls on the last day of that grace period, we take a retro deduction (pre-tax) back to the effective date of coverage. Do others handle it that way. I've heard the IRS frowns on retro deductions for new hires, but I wonder how many plans don't take retros.

That is the same way we work it for change in status. Do most others take retros in this situation with after-tax dollars?

Our Section 125 plan currently offers a 31 day period following the date someone is first eligible to participate for that person to enroll. Someone could submit an election and then revise it (not subject to change in status) within that period of time. Do any of your plans work that way? If not, how are they structured? (I believe it is OK to offer the 31 day grace period, but I believe we should end that period as soon as a participant makes an election.)

A client had the old MPP and P/S combination. When they came to us in 2003 we froze the MPP contribution and merged the MPP into the PS Plan. We intended to do the final 5500 for the MPP for 2003 since all of the assets of the MPP were transferred to the PS in 2003.

Now, in 2004, the prior TPA/Custodian sent is a small check for some trailing earnings attributable to the MPP plan. I assume that they received this shortly after the plans left their service but did not forward the money as timely as they should have.

Can I still do the final 5500 for 2003 and just apply these additional earnings to the PS plan? Or should I hold the MPP open until the final earnings were deposited and show the final being 2004?

Assume A's vested balance in PSP account is 50K and A takes out a loan for 25K. Can A then apply for a hardship distribution for the remaining 25K? ERISA Outline Book has an example in the discussion regarding how subsequent distributions don't affect 50% loan limit which would imply that it could be done. However, it doesn't seem prudent from a Plan standpoint b/c the remaining 1/2 of the account is generally held as security for the loan.... Any suggestions? Thanks in advance.

We have a LLC wanting to set up a 401(k) plan. Employees have W2 income, owners K1. I know k1 income cannot be considered in a partnership, but what about an LLC? What type of plan would be best for a profitable llc? Any thoughts would be appreciated.

Thanks.

Although 5 years is the maximum time period for repayment of a participant loan (other than for purchase of a residence), can the length of time be shortened? We have participants who choose the five year option for loans as small as $1,000, resulting in 24, 26, or even 52 very small payments over the maximum loan period. Can we limit the repayment to, for instance, 18 months for each $1,000 loan amount, with a maximum of five years?

Thanks!

I'm graduating Seton Hall Law School this May and considering going for my L.L.M. in Employee Benefits at John Marshall Law School in Chicago (the only L.L.M. program for Employee Benefits in the country). However, I would like to know whether an L.L.M. from this program is going to be meaningful or just another abbreviation on my resume. More specifically, I want to know how much an L.L.M. from this program really increases my marketability in this legal niche. Any insight would be greatly appreciated.

A participant who is over age 50 has an excess annual addition in the amount of $1,050 and had the following contributions:

401(k) $10,478.00

Match $10,478.00

ESOP $20,094.00

Would it be permissible for $1,000.00 of the excess to be considered as a catch-up contribution and therefore only $50.00 would need to be deducted from the plan? Or must the full excess amount be returned in accordance with the provisions in the plan document? (This is for the 2002 plan year)

An ESOP obtained stock from 2 shareholders in a 1042 transaction in 2001. The sponsor company has recently hit hard times and is contemplating the termination of the ESOP. Participants would become 100% vested upon termination and distributions would be made in cash. My question is whether termination of the ESOP and distribution to Participants in cash would be a "disposition" under section 1042 , such that the sponsor company would incur an excise tax on the original 1042 transaction (because the stock will not have been held for the required 3 year period)? I would appreciate any input anyone has on this issue. Thanks.

Before fiiling my taxes I discocovered I'm inelgible for a 2003 ROTH contribution. I've requested the excess cointribution and earnings be reoved. Where do I report the approx. $750 earnings from that excess contribution on my 2003 tax return? The gain resulted from an increase in value of the mutual fund shares. Would I simply report this as if it had nothing to do with an IRA; or is there some special method or form? Because this is being done just before filing the corrected contribution forms etc won't be submitted until after the tax filing date. Thanks

As an employer with many plans (it has already been determined that the plans are "affiliated entities" and members of an "organized health care arrangement"), does the privacy notice for the plans have to list the specific plan names? I have reviewed the regs and there doesn't appear to be a specific requirement to list the plan names.

Thanks for any guidance!

to establish a mid-year qualifying event has occurred our health plan requires documentation of the underlying reason behind a loss of other health coverage. we've been told other cafeteria plans accept HIPAA creditable coverage certs as the only required documentation to establish a qualifying event. we wonder if we've gotten out of sync with other plans and/or the IRS. any thoughts regarding either approach are welcome.