Is there any Fiduciary Liability to Plan Trustees when a Mutual Fund they have selected for their plan is involved in unethical procedures such as the market timing and mutual fund scandal currently going on?

We have a bunch of participants who received employer (profit sharing) contributions and then terminated. They were not vested but the employer hasn't requested the distribution of these accounts -so on statements, it's still under their name.

On the 5500, are they counted as being "separated & entitled to future benefits"? And/or as a participant with an account balance?

I'm thinking the money should be considered forfeitures but I'm not really sure. Any insight is appreciated!

Thanks,

Rachel

Has anyone used the BlazeeSSI product PENTRAK? Can you share your opinion / experience with this product?

I have a multiple employer 401(k) plan for which I need to test approximately 82 participating employers individually for top heavy. I use Relius Admin software. Does anyone have any ideas on an efficient way to accomplish this? I'm about to tear my hair out because I really don't want to have to do this by hand - but it's looking like I will have to. I appreciate any input.

Cust establishes new Roth IRA, contributes $850, then closes it and transfers the $850 (plus earnings) into another Roth IRA.

Customer wants to recharacterize the $850 into a Trad IRA contribution.

The regs say that IRA transfers cannot be recharacterized (1.408A-5 Q & A 10). But then again, it says that you can disregard transfer and recharacterize the amounts as if they were contributed under the first Roth IRA.

Can they or can't they, and please explain why.... finding these rules really, really mind bending...

What is the due date for a profit sharing contribution to a 501© organization???

Participant requested a hardship withdrawal with spousal consent (plan offers annuities). Something happened between them and now the spouse wants to withdraw her consent. Payment hasn't occurred yet.

Does anyone have any thoughts on whether we should accept the rescission or treat the consent as irrevocable? Before anyone says follow the plan document, the plan document doesn't say.

Thanks

We are having some debates on the effective dates for covrages changes in relation to QLE. Is there a one-stop resource to determine what we should be doing?

Example: An employee of ours has coverage under a spouse. The employee and the spouse get marrieed. The ex-spouse's plan drops our employee effective the date of the divorce (April 5th) - are we to allow the employee to enroll in our plan effective April 6th or the 16th?

When you add too much to an existing ROTH what might be the best way to determine gain/loss only on that money? Can't find anything helpful in IRS Pubs. Thank you to all.

Any thoughts regarding whether we have to provide a HIPAA privacy notice also in Spanish? The regulations appear to be silent on this issue, and I would appreciate any guidance!

if a participant receives a lump sum distribution because of a social security defined injury, do they get the 10% penalty for early withdraw. and if so, since a 1099 does not need to be attached with filing, do they have to have one reissued?

thanks, Andrew

I would like to gain a better understanding, regarding the complexities, of calculating Schedule C compensation for valuation purposes. I understand Line 31 Comp of the Schedule C is being adjusted/reduced by several items: contributions to ancillary EE’s, FICA and Medicare. I would really like to learn more on how the calculation is derived and problems to watch out for. Any help or direction would greatly be appreciated.

Has anybody had any luck getting a determination letter from the IRS on a cash balance plan termination? In particular, one that had a conversion in the past and got a favorable letter at the time? The plan in question is already frozen, but the employer wants to terminate it. Are we just stuck maintaining the plan indefinitely?

If the client issues the check in a timely manner but the deposit is not credited with the financial institution on time do we consider the funds to be "segregated" by the issue date of the check or actual deposit date?

My understanding is a 457 for a non-governmental tax exempt organization needs to be a "top hat" type arrangement.

I am being contacted by an HR person with a tax exempt entity who is sure their plan is a 457 and it allows all employees to contribute. (sure smells like a 403(b) to me)

Can they do this?

A defense attorney works on-call for the State of MN. He participates in a State sponsored collectively bargained defined benefit plan. His benefit is based on his State income of $58,000.00.

This attorney also has a private practice. His salary is $150,000.00 from this practice(total annual income $208,000.00). He wants to establish a defined benefit plan for this private business.

What would the limitations on his benefit be if this attorney participated in both the State plan and his private plan?

Would his benefit in the private plan be based on $208,000.00?

Section 102 of the Pension Funding Equity Act of 2004 concerns an “alternative DRC”. Subsection (b) amends IRC 412(l) for this purpose. The new 412(l)(12)© reads as follows:

“C) APPLICABLE EMPLOYER- For purposes of this paragraph, the term `applicable employer' means an employer which is--

(i) a commercial passenger airline,

(ii) primarily engaged in the production or manufacture of a steel mill product or the processing of iron ore pellets, or

(iii) an organization described in section 501©(5) and which established the plan to which this paragraph applies on June 30, 1955.”

Can anyone shed some light on (iii)?

I have a client with a profit-sharing plan; a long time employee asked the sponsor if he could take his portion of the PS allocation as cash rather than having it contributed to the plan. Does anyone know how this could be incorporated? What effect will this have on testing?

Any ideas would be helpful.

Thanks

I've had a Schwab prototype combination Money Purchase/Profit Sharing Keogh since 1987. I am a self-employed, single-owner participant required to file 5500-EZ. Last year I had to amend the plan for GUST. This resulted in Schwab dividing up my single Keogh account into two separate accounts -- one Money Purchase and one Profit Sharing.

Schwab tells me that I should file two 5500-EZ's this year. One for each plan. In the past I have always completed just one 5500-EZ, which I now understand may have been incorrect. If I follow Schwab's advice and return two 5500s for 2003, will that create a problem for me with the IRS? If I do file two forms, should I make one plan number 001 and the other plan number 002? Any suggestions or advice would be much appreciated. Thank you.

Here is some model langauage I have drafted to award benefits, allocate, and take vesting into account. Assume all terms are properly defined. Also assume that all other matters, e.g., time and form of distribution, are dealt with elsewhere. Much of this language may be taken from other QDROs I have seen or from other books and articles, but much of it I know is my own. If you recognize your work and I don't give you credit, I apologize. I am not able to differ between what are my own creations and what is something I've read from someone else.

"Award of Benefits.

Alternate Payee is awarded as her sole and separate property, and shall be entitled to receive directly from the Plan, fifty percent (50%) of Participant’s benefits under the Plan determined as of the Valuation Date, adjusted for all gains, earnings, dividends, interest, losses, and other similar investment returns and losses attributable to such amount from the Valuation Date to the date of distribution to Alternate Payee. Participant’s benefits under the Plan for purposes of this Paragraph shall include all of Participant’s benefits under the Plan as of the Valuation Date, whether vested or unvested, including any amounts allocated to Participant after the Valuation Date that are attributable to Participant’s services on or prior to the Valuation Date, [and shall further include] [but shall not include], if applicable, the principal outstanding balance, measured as of the Valuation Date, on any loans to Participant from the Plan. The Participant shall be obligated to repay any loans from the Plan that are outstanding as of the Valuation Date.

Allocation; Vesting.

The amounts awarded to Alternate Payee hereunder shall be taken pro rata from all of Participant’s accounts or subaccounts in the Plan as of the Valuation Date. The Plan shall establish separate accounts or subaccounts for Alternate Payee’s benefits awarded hereunder in accordance with the Plan’s normal procedures. In the event Participant is not fully vested as of the Valuation Date, the amounts awarded to Alternate Payee above shall be taken pro rata by account balances from Participant’s vested and unvested benefits. Alternate Payee shall be, and shall become, vested in each account or subaccount to the same extent Participant is or becomes vested in his corresponding accounts or subaccounts. All distributions to Alternate Payee shall first be taken from the portion of Alternate Payee’s vested benefits to permit Alternate Payee to continue to vest as Participant receives vesting credit under the Plan. Alternate Payee shall forfeit her benefits at the time, and to the same extent, that Participant forfeits his benefits."

I'm guessing most of you won't like it. I'm guessing most will want AP to take a lump sum and if she is not vested then she forfeits and the forfeiture reverts to the Participant.

Any thoughts?