Assuming the 401(a)(26) and 410(b) are satisfied and, if applicable, top heavy accruals provided, can a DB plan have a "last day employment" to accrue a benefit (other than the Top Heavy) under the plan formula?

I have never seen it yet but that doesn't mean it is impermissible.

I hate related group issues.

Car Dealer Co. & Management Firm, LLC are a controlled group. Car Dealer Co. will acquire 50% ownership in New Car Co. (the other 50% is owned by unrelated parties). I need to analyze issues if Management Firm, LLC performs management service for New Car Co.

These are my thoughts thus far:

1. If Management Firm, LLC principal business is performing management functions for New Car Co. I have an ASG with Management Firm, LLC & New Car Co. I am presuming that for the ASG to exist Management Firm, LLC would probably have to derive at least 50% of its business from services performed for New Car Co.

2. If an ASG exists between Management Firm, LLC & New Car Co. are ASG that doesn't necessarily mean that Car Dealer Co., Management Firm, LLC & New Car Co. are treated as a single employer. What it does mean is that I have overlapping related groups & then there are competing views as to whether or not those overlapping are treated as a single employer.

Am I on target here or way off base?

Thanks in advance for any guidance.

A sponsor has deposited more than the maximum permitted match into many participants' accounts. Does this "excess" (adjusted for gain/loss) have to be transferred to the forfeiture holding account, to be applied toward future employer match, or can it remain in the participants' accounts and be applied toward their current required matching contribution?

We are looking at opening an office in a state that levies a sales tax on services. Can anyone share their experiences with that? If a plan pays for our services, are they exempt from the state sales tax? If an employer pays for our services, I assume we'd need to collect the tax? Thanks for your help!

We have a safe harbor 3% 401(k) plan in place for 2004. Proper notices and such have been given and the doc is in order. The client would like to now switch to the safe harbor match for 2005 and give the 4%, which will save him quite a bit of money. His projected income for 2005 is going to be much lower (or so he thinks). I assume with proper notices and amendments, we can flip from one type of safe harbor to another without any problem? Is there such a thing as a discretionary ps/match safe harbor doc whereby each year (assume election is made timely and before the beginning of the year) they can opt as to which way they want to go????

Anyone run into this?

Appreciate any help here.

A five-percent owner of a 401(k) profit sharing plan turned 70 1/2 in December, 2003 and terminated his employment effective January 1, 2004. In connection with the termination, he elected to roll all of his plan funds out into an IRA. My understanding is that the RBD isn't until April 1, 2004. Can we allow the participant to roll all of his funds out (including what would be the RMD amount) or was the RMD obligation triggered?

If an employer defers $16,000 over the course of 2004 and his two NHC ees defer nothing-0%, the ADP automatically fails and the ER must take $13,000 as income. Is the $3000 excess amount counted as a catch-up contribution?

The rationale, as explained to me, is that the ER has unreliable business income, (and he may be a bit of a spendthrift...), and he wishes to use the returned deferrals to fund a discretionary profit sharing plan contribution for his 2 ees.

ok, here is an attempted version at top heavy.

now that the 5 year lookback no longer applies it makes it a little easier.

I think (that is a debatable statement to start with), but I think I now have it set that anyone who "Key current year" > 1 will show as former key in all my calculations, but I might have missed one. It used to be set to >5 for the 5 year rule.

The last few plans I have run have matched Relius. There have been times in the past the numbers have differed a little, but not enough to make a difference in indicating if the plan was top heavy.

There is also a % indicating the top heavy % after elimnating the account balances of all terminees - sort of a crude projection for the following year.

This report does not include any in-service distributions.

I suppose that would be easy to use if they were entered as a user defined field in plan specs, but since I am lazy, etc I leave that to anyone who really wants to fool with the report.

Ineligibles do not show on the report, and ees with 0 balance do not show, so at the minimum this cuts down on the amount of paper vs the standard report that comes with the system.

Always compare results to Relius just to make sure of things. There could always be some things I missed in the totals that I don't come across often - e.g hardships and stuff like that. just never tested for everything.

Does anyone have a spreadsheet that can figure net earned income when you have 401(k), safe harbor match and an integrated profit sharing calculation. This is a parternship with 6 partners and 10 employees.

We have a volume submitter plan that was amended but not signed and submitted to the IRS by the January 30th deadline. One of the Trustees has been asked to sign the Plan and wants to know what, if any, risks might be there if the Trustee signs the document. Trustee is no longer with the Company but has not been removed or resigned(yet). The Company will need to deal with the issue of failing to adopt the plan on time and could still use EPCRS for this?(yes?)

If a 501 ©(6) organization wanted to provide an employer provided retirement benefit to one of its key executives, what would be the tax implication to the participant? Would the "promise to pay" be governed by section 457? Everything I read on section 457 plans describes deferrals by the participant. What are the tax implications to the executive from an employer provided defined beneift plan?

How do I code this in Relius?

Client A has a calendar year profit sharing plan. Client A has not made the profit sharing for 2002. However the client has claimed the deduction for 2002. What are the consequences of not depositing the profit sharing amount into the plan? How can it be corrected? Do you have to pay an excise tax? What is the time frame by which the profit sharing needs to be deposited?

Any help would be appreciated.

Thanks.

A deferred vested EE who attains age 70.5 in 2004 (RBD = 4/1/05) requests a rollover distribution to a new IRA to occur in March 2004.

Question 1? Since the 2004 RMD is technically not required to be taken until 2005, the plan can rollover the full benefit amount - not required to pay the RMD portion in cash?

Question? The Plan must still calculate the RMD for 2004 since it is based on Plan account balance as of 12/31/03 and communicate this to EE - so EE knows how much must be distributed from IRA in 2005 for 2004 (in addition to the EE's 2005 RMD).

Am I thinking correctly?

Thanks

I rarely deal with IRA's so I don't know a lot about them.... however, question has been asked from a smaller employer (w/terrible employee deferral average) as to how they can increase their (HCE) contributions for retirement. They are thinking an IRA (maybe a Roth?) but I cannot figure out what their limits would be for contributions. Obviously, for their 401K, they must pass the ADP/ACP test. They are not interested in changing their plan design (i.e. Safe Harbor).

Can anyone help me with the max contributions they could do for an IRA?

Thanks,

Rachel

A multiemployer health fund is funded by both employer and employee contributions. Employee contributions are deducted from the employee's wages via a payroll withholding authorization to the payroll department.

Can the employee be compelled to participate in the health plan?

If yes, can you point me to a law, case etc that will back this up?

Thanks.

Can someone give me the new limits for both deductible and non-deductible contributions into an IRA?

Any help would be great.

Thanks!

When calculating the maximum deduction, interest may only be credited to the end of the fiscal year. However, the full funding limit is calculated at the end of the plan year.

For example, a valuation date of 12/1 for a full plan year BUT the employer has a fiscal year of 12/31.

IF the full funding rules do not apply, the maximum deduction can be increased by interest for the 1 month.

What happens if they do apply - is there a problem because the full funding limit includes interest to the end of the plan year?? Does it have to be adjusted backwards??

Thank goodness OBRA goes away in 2004.

Speaking of 2004, are we now just stuck with old full funding limit (EAN in most cases) with a floor of the RPA???

Employer wants to establish cafeteria plan that would offer participants a choice between health insurance and a cash benefit. Employer wants to exclude from the plan any employees who are NOT covered under a spouse's health plan. Any problem with this? Thanks for your input.

Hello all, i have a few questions.

1.) Can you have a Simple 401(k) Plan and regular 401(k) Plan at the same time?

2.) If you have a 401(k) Plan established, can you rollover the Simple assets

3.) Can you just amend a Simple to become a regular 401(K) ? Or do you have to establish a new plan document all together?

Bottom line, I have a client who currently has a Simple 401(k) Plan, but they are making a lot of money now, and would like to start up a 401(k) Plan, so he can put away more money....I don't know the best plan of action of here?

Any thoughts?

Thanks