If an employee is no longer employed, whether he is terminated, quits or is offerred a severance package, he can request a full disbursement, correct?

What tax and penalties apply? 20% tax?

What happens to outstanding loans?

State of California.

If I get divorced will I have to liquidate my 401K and split with my ex? Can she force me to do this? If so, what are the penalties? The 401K is provided through Wells Fargo.

Do I have to file the amended returns on the 2000 and 2001 forms or can I use current forms?

Two plans with participant directed investments maintained by two separate members of a controlled group have one contract account at Manulife Financial. The monies in the plan are kept separate by "division" within the contract. Is this a master trust or not?

For clarification, each plan is sponsored by only one of the members of the controlled group.

Can a participant who receives the maximum contribution allowable to a defined contribution plan make contributions to a traditional or other IRA?

An exception to the 5-year repayment rule exists for loans used to acquire a principal residence.

First, are there requirements that a plan require substantiation -- at the time of the loan -- from the participant re: the use of the loan proceeds? If so, what needs to be obtained by the plan?

Second, if a plan wanted to move its loan application/approval process to its web-based administrative platform, would an electronic certification by the participant that the loan proceeds being applied for were going to be used for the acquisition of a PR be okay?

Any specific cites for this?

Thanks!

Our payroll vendor currently receives names, address, date of birth of all of our ee's, as well as whether our ee's are taking flex med deductions and deductions for health and dental.

Under this circumstance, is the above information considered PHI and should we therefore be asking our payroll vendor to sign a business agreement?

Does anyone know the address to where you send a copy of the complaint to the Secretary of Treasury under 502(h)?

[Never mind. I found it.]

If my plan pays a death benefit equal to the PVAB, do I have to apply the GATT minimum to calculate the lump sum?

My instinct is "yes", but consider this:

* The plan is already paying more than the lump sum value on a GATT basis of the required REA death benefit (value of 50% survivor benefit)

* I can pay any addtional death benefit I want in addition to the QPSA, like a flat dollar amount

* Why can't I just define my death benefit to be PVAB based on plan equivalence without regard to 417(e) since is already more than the required QPSA value?

Thoughts?

Our participant loan policy has a cure period for missed payments. Under the cure period, missed payments must be made by the end of the calendar quarter following the calendar quarter in which the payment was missed. This cure period is in compliance with the participant loan regulations (1.72(p)-1,Q&A10). However, what happens when the application of this cure period extends the due date of the missed payment beyond the end of the original amortization period? For example, a participant fails to make his last payment. The cure period would enable that participant to make up the payment long after the 5-year period required by Code Section 72(p)(2)©. Does anyone have any thoughts on this or know of any authority that addresses this issue? Thank you.

I am working on a participant statement that will print current and year-to-date information by fund, grouped by source. I've set it up using a pretty basic statement and then entered almost the identical statement as a sub-report only it uses YTD information. Everything works except one thing. I am running a report from 7/1/2003 - 12/31/2003. The current period data is fine, but the YTD for one person is incorrect.

This person had a beginning balance in 2 funds, but moved everything that was in one of the funds to the other fund on January 1. This fund does not show up on the YTD report, but the transfer into the second fund does appear as a transfer. I don't have any suppression elements in my report so I am assuming that the front end in Relius suppresses the activity if there is no beginning balance and no activity in the date range. And in this case, as of 7/1/2003 there isn't a beginning balance or activity. But it is the YTD section that doesn't show it when it needs to.

It also could be a linking issue. I was trying to link off of rptplan.rptfromdate and rptplan.rpttodate but rptplan is the only table in my report that contains those elements.

Does anyone have any thoughts?

Tim

I am working with a hospital who wishes to establish a 401(k) and 403(b). They want a consolidated front-end for their employees for servicing of the two plans. The only way to accommodate this is to put the 403(b) on the recordkeeping platform. Currently they have a non-ERISA, individual contract based 403(b). If the plan is put onto a recordkeeping system and more importantly fixed menu is put into place (there is no match in the 403) it is my understanding that it now becomes an ERISA based plan. Let me know if this is correct.

Also, what other considerations do I need to be aware of other than the hospital will be required to:

- have a plan document (anyone know of 403B doc providers?)

- File Form 5500 Annually

- audit the plan annually

Thanks in advance. Bryan

what is the proper way to handle the return of deferrals from a participant that was not eligible to make them. since it is after the april 15 deadline is it treated the same as a return of a deferrals in excess of the 402(g) limit?

X wants to recognize service for employees who transfer from Z. Z owns over 50% of X but is not considered a controlled group.

We have a client which is a law partnership in which they would like to have separate allocation groups for each of the partners, because some want to maximize their contributions, and others don't. The plan is a cross-tested 401(k) plan, and most partners maximize their deferrals (and do catch-ups where possible). The NHCEs share one allocation group.

There appears to be no way to separate partners by age, comp, service or ownership percentage, so we are now exploring whether to set up separate classification groups by name. I've seen some indications on these boards that this is a big no-no, and other places it seems to be OK.

Does anyone have some good cites or guidance or IRS and DOL opinions about this kind of situation? I'm starting to get really confused if we need to tell them to just live with it, or if we can really do this type of design.

We have a client who is 100% owner of two separate medical practices. Both practices have safe harbor 401(k) plans incorporating the 3% NEC. The doctor earns $45,000 in practice 1 and $400,000 in practice 2. It is my understanding that the doctor's compensation for each practice when calculating the 3% NEC is $200,000 (2003 plan year). He would receive a $6000 safe harbor contribution in each plan. Any thoughts?

I can't seem to find anything that talks about establishing a minimum amount for hardship withdrawals. Are we permitted to do so? If so, I'd be interested in knowing the limit that other companies have set.

Now that the Sup Ct has ruled that under ERISA the assets of self employed owners are protected from creditors if the plan also covers common law employees (Yates v. Hendon, Mar 2, 2004) does this protection also include amounts rolled over from a participant's IRA and funds transferred from or accumulated in an HR-10 plan prior to the time the plan becomes subject to ERISA? If the ct decision is read literally only retirement plans without any employees are not protected by the non alienation provisions of ERISA and the source of the funds before they become plan assets is not relevant for protection under the non alienation rule.

I have a situation where my organization (an IRA custodian) received and deposited a check for $3,000 on 4/12/04. The check represented a $3,000 IRA contribution for 2003. The check was returned by the drawing bank for insufficient funds on 4/19/04 and, consequently, the IRA contribution was removed for 2003. The client has presented the same check for reprocessing and wants us to credit the IRA with a $3,000 contribution for 2003.

Our policy has always been that the check must be received in good order and negotiable form by April 15th in order to credit the contribution for the previous year. The only exception to this policy is for checks received after April 15th in an envelope postmarked by April 15th.

Given the fact that I face this issue at least a dozen times each year, I would like to know if anyone is aware of any authority that would support the above position, whether that authority directly relates to IRA contributions or addresses other similar tax situations such as the timing of gifts for purposes of the annual gift tax exclusion.

As always, any insight would be greatly appreciated.

I have read a few prior posts on this and want to confirm my understanding.

Plan has 2 HCE's. One is very old (owner) and the other is very young (son) and one NHCE in the middle from an age standpoint.

As I understand it, the SHNEC causes two problems with an age weighted plan. First, the EBAR will no longer be the same for all participants so they don't get the automatic pass on cross testing that a normal Age Weighted P/S would get, which forces me to perform the cross testing. Second, the plan will no longer meet the broadly available allocation rates so I will have to make sure they all get the gateway minimum. Is this correct?

With all of that said, I still allocate the P/S contribution based on Comp * Actuarial Factor (disregarding the 3% SHNEC). Correct?

Is this why they say that two safe harbors don't make a safe harbor?