If an employer withholds money for months from an employees paycheck for a SIMPLE IRA, but does not fund the account until months later, what are the requirements? Is the employer responsible for earnings growth which would have occurred in the account?

The employer is considering refunding the money withheld, to the employee, because they do not have the money to cover the required 3% employer contribution. Other than refiling last years W-2's, what problems do you see with that approach?

This particular participant left the trade in the late 70s and now seeks to take his disability pension. Is the participant held to the standard of the plan that existed in the late 70s or the standard under the present plan with regard to whether or not he qualifies for the disability pension?

Thank you in advance for your help.

I did not search.....sorry.

I have a small company, 4 employees 2 of which are my wife and I. S-Corporation.

I want to contribute as much as possible to a retirement vehicle.

Do I qualify for 401k and if so, how do I go about it?

Should I just do an IRA for each of us or what would be best?

Thanks in advance

Can a plan document still be written to offer a bottom up QNEC? And if so, is there any guidence as to how it is done since EGTRRA? Would you just start with the person with the lowest compensation and give them a contribution so the total of all of their contributions is 100% of salary and work your way up?

I received an attorney-drafted newsletter that stated that the individual limitation for fiscal year plans ENDING in 2004 is $41,000 (not counting the catch-up). (example for a plan ending 2/29/04

Normally this limitation would be used for plans BEGINNING in 2004.

Does anyone have any more info?

The same amendment make changes that impacts future benefit accruals in opposite directions: (1) One part of the amendment changes the def'n of compensation (in a non-discriminatory manner) to exclude certain components of compensation previously included (a reduction) and (2) another part of the same amendment increases the benefit formula. Both changes are contained in the same amendment and have the same effective date. When viewed in its "totality" the net impact of the "entire" amendment on each participant is either an increase in future accruals or a negligible decrease, although one component of the amendment viewed by itself (comp change) is clearly a reduction. Is the 204(h) notice based upon the amendment's overall impact or based on each individual component of the amendment ? Also what guidance do we have as to what constitutes a "significant" reduction in future benefits ? (I recognize to be safe we may want just do a 204(h) notice as there may be some minor reductions in a few participants' future accruals).

Two entities with ownership as follows:

Entity 1: Dad owns 100%

Entity 2: Dad owns 40% and Son owns 60%

Would Son be deemed to have 100% ownership in Entity 1 and Dad deemed to have 100% ownership in Entity 2 due to attribution? Thank you.

A LLC establised a SEP in 2002. The LLC file their taxes as a partnership and all "wages" are earned income (K-1). Now for the questions. First, the 2 members, who are the only employees, set up individual SEP's using their individual information not under the LLC's name/tax number etc.. Does this make the contributions made in 2002 disqualified? The SEP should also have uniform contribution amounts as a percentage of compensation, but the 2 members contributed different amounts As both are HCE and key , does this cause any discrimination issues or any other problems I should be aware of? Thanks in advance for any input!!

Employer A with a DB plan sold subsidiary to Employer B in a stock sale. Employer B assumed A's plans with respect to employees of the subsiduiary that became employees of B.

B's DB plan allows for early retirement at 55 with a 25% reduction if vested.

A's plan evidently required employees to be employed on the day they reached 55 in order to qualify for early retirement with a 25% reduction. Otherwise normal retirement age is 65.

Employee worked 10 years with A and 14 years with B. At age of 54 years and 4 months, B eliminated his job, and terminated his employment.

At age 55 employee applies for early retirement from B. He is told that the A portion will be reduced by 65% from the age 65 amount because he was not employed on the date he reached 55. He is told there is no discretion with ERISA on this matter.

I hope I have provided suffiecient but not too many details.

I would appreciate comments.

I'd like to know what sort of impact has been made within your retirement system and otherwise by allowing retirees to return to work and receive their benefits.

We have a client with a 401(k) plan who contributes 12% in the form of a profit sharing contribution. Upon conducting the 2003 ADP test, the plan fails and one corrective measure would be to contribute a 5% QNEC on behalf of the NHCE only.

Can we reclassify part of the 12% profit sharing contribution as a QNEC on behalf of the NHCEs without violating Sec 401(a)(4) with regards to discriminating in favor of HCEs?

Can anyone lead me in the right direction to find current statistics on the number of refunds processed for failed ADP/ACP testing?

During what period of time were state and local governments permitted to establish 401(k) plans?

Is it OK to set up a plan where 2 out of 3 HCEs are in a classification group that gets zero contribution each year? The 3rd HCE wants to max out. There are 1-2 NHCEs. This is a C Corp. Thanks.

I've read some of the posts on this topic, but I need to clarify one point. The plan excludes commissions from compensation. In our Plan's case this makes the def. of comp. discriminatory, so I know we have to use General Test for compliance w/ 401(a)(4). My question is this, in determining how much 3% safe harbor contribution a participant gets, can the discriminatory definition of comp be used? Would we have to give 3% on compensation that meets 414(s)?

Thanks

A tax-exempt entity has an executive who is currently in his early 50s. They want to allow him to "retire" at age 60 but still stay on the payroll as an employee through age 65 so he remains eligible for health insurance. The entity does not have retiree medical.

What they would like to do is to provide that at age 60, he will receive $20,000 per year until he is 65, taking the position that by receiving the $20,000 per year, he is still an employee and eligible for health insurance, even though he won't really be required to perform any services. I realize that there are several issues as to whether the "employee" status and eligibility for health insurance will fly, but my 457 question is as follows.

I'm assuming that the promise to pay $20,000 per year at age 60 is a deferred compensation arrangement and therefore subject to 457. Does everyone agree on that?

My thought is that if the arrangement is not set up as an eligible 457 plan, the payments will be taxed as soon as he hits age 60 and can "retire." Therefore, paying $20,000 per year is not beneficial to him since he will be taxed on the entire amount at that time. However, if he doesn't receive a payment each year, any argument he has that he is still an employee through age 65 is pretty much toast.

The other alternative is to try to set this up as an eligible 457 plan, in which case the deferrals will have to be set up so that no more than the annual limit is deferred each year, which may or may not be enough to get to the desired total $100,000 benefit. The good thing is that the executive will not be taxed until he receives a distribution, but the bad thing is that he cannot receive a distribution until he severs employment. If he terminates employment at age 60 and starts receiving $20,000 per year, it's hard to argue that he remains an employee for health insurance purposes. On the other hand, if he remains employed at age 60 for health insurance purposes, he can't start receiving the distributions and the employer will have to continue paying him normal wages.

I entertained the idea of the employer terminating the plan when he hits age 60, but I'm not sure the regulations allow distributions upon termination of a plan to be paid other than as a lump sum.

Does anyone see any way the desired goal can be accomplished?

I have searched similar questions and answers on this message board but I am still confused about a surviving spouse's options. Assume the IRA owner (male) dies and the surviving spouse (female) was 50% beneficiary and another party was 50% beneficiary. Assume the IRA owner had not reached RBD by date of death.

What are the results of the following on (i) the date distributions must commence, (ii) the period, life or joint lives over which the distributions must be made, and (iii) the ability of the surviving spouse to name a new beneficiary?

1. The surviving spouse elects to keep her interest in the same IRA.

2. The surviving spouse elects to rollover her interest into a new IRA.

Assume that instead of the above scenario the surviving spouse is the sole beneficiary? What effects do the following have on (i) the date distributions must commence, (ii) the period, life or joint lives over which the distributions must be made, and (iii) the ability of the surviving spouse to name a new beneficiary?

3. The surviving spouse elects to keep her interest in the same IRA.

4. The surviving spouse elects to rollover her interest into a new IRA as a spousal beneficiary.

5. The surviving spouse elects to treat the IRA as her own.

It may be that 4. and 5. are the same.

I have searched similar questions and answers on this message board but I am still confused about a surviving spouse's options. Assume the IRA owner (male) dies and the surviving spouse (female) was 50% beneficiary and another party was 50% beneficiary. Assume the IRA owner had not reached RBD by date of death.

What are the results of the following on (i) the date distributions must commence, (ii) the period, life or joint lives over which the distributions must be made, and (iii) the ability of the surviving spouse to name a new beneficiary?

1. The surviving spouse elects to keep her interest in the same IRA.

2. The surviving spouse elects to rollover her interest into a new IRA.

Assume that instead of the above scenario the surviving spouse is the sole beneficiary? What effects do the following have on (i) the date distributions must commence, (ii) the period, life or joint lives over which the distributions must be made, and (iii) the ability of the surviving spouse to name a new beneficiary?

3. The surviving spouse elects to keep her interest in the same IRA.

4. The surviving spouse elects to rollover her interest into a new IRA as a spousal beneficiary.

5. The surviving spouse elects to treat the IRA as her own.

It may be that 4. and 5. are the same.

I am not sure why would a restricted stock plan require a purchase price in general, but need to know why a restricted stock provision would have a 100% of FMV purcahse price for shares of restricted stock. Wouldn't participants be better off just buying shares outright if they are going to pay 100% FMV?