On my employer form 403b withdrawal form, I checked off the option stating to max out 403b contributions, which should mean $13,000 contributed a year, or $500 every 2 weeks ($500 x 26 = $13,000). Yet, when I get my paycheck, it says it only deducted $481.48, which would only contribute $12,518.48 in 52 weeks. Does anyone know what's going on here?

What is the effect of a participating employer of a multiple-employer plan choosing to withdraw from participation in such plan? Is this akin to a termination of a single-employer plan?

Doctor A had a practice that employed two valuable employees. They had a 401(k). The doctor decided to terminate the practice and the 401(k) Plan. Employees were given distribution options. The doctor then joined as a partner in another practice and the two employees were hired by the new partnership. Money was rolled from the old plan to the new partnership's plan.

In doing the final accounting of the old plan, the prior TPA made an error. Basically, one of the valuable employees got a sizeable chunk of the Doc's rollover account. She subsequently fell on hard times and took a distribution of the rollover balance in her new account and spent the money. The error was discovered by prior TPA after the money was distributed by the current TPA.

The participant can't pay back the excess amount to the plan and there is a dispute (of course) as to who should pony up to make the Doc's account whole (seems pretty clear to me!). Doc and prior TPA are trying to come to an equitable solution so the participant can pay the $ back. Prior TPA suggested that the plan issue a promissory note from the Doc's account to the participant. The Doc's account could hold the note as the participant pays back the money with interest.

I know that the Prior TPA should pay the amount that the Doc's account is short and go after the participant outside of the plan (or perhaps have the participant make installments to them rather than the plan). I know what the appropriate correction should be but, would the loan from the Doc's account be a prohibited transaction assuming the Doc would even agree to this? I have tried reading about PT's and the exemptions for participant loans but all the information I read talks about loans from the participant's own account rather than from someone elses account. Help?

A plan has eligibility requirements of 6 months and Age 21. With 6 month eligibility, there is no provision for hours so even part-timers get into the Plan. This was not the intent of the employer. The liberal eligibility period has pushed the number of plan participants up over 100, even though only about 25 participate. An independent auditor's opinion is now required, which really has increased the Plan's admin costs. We just walked into this situation and we are trying to alleviate the concerns of the client. What would be the soonest that the plan could be amended to increase the eligibility to one year? We realize the existing participants would still be counted, but it would stop other part timers from getting in to the Plan. Are there anti-cutback rules to consider? What would have been the latest the plan would have needed to be amended for this eligibility to change in 2004?

Any help is greatly appreciated.

A nonresident alien, who worked and lived outside the U.S., is participating in a U.S. qualified pension plan. If the participant terminates employment and directly rolls over the U.S. qualified pension plan dollars into a U.S. IRA, how does the withholding work?

IRS Publication 590 only refers to withholding on U.S. citizens and resident aliens who receive a distribution outside the U.S.

Thanks!

I am seeing the new hype with a new real esate transaction involving the IRA forming an LLC that can purchase your personal real estate. I was wondering what your thoughts were in regards to this new IRA design.

Does anyone know if childbirth classes are reimburseable? I read on line from other companies that they are only if they address specific medical issues such as labor, delivery, breathing techniques, and nursing. Also, I have checked the IRS website and there is nothing that covers childbirth classes.

Any information would be great. Thanks

1. Can a foreign national (not a citizen) in this country on a Visa who has a social security number and pays US taxes participate in a 401(k)plan (he has no greencard)?

Has FASB released anything regarding the calculation of this 'expected payments' grid?? The calculations seem anything but trivial.

There was a discussion on this site regarding a plan which pays lump sums. The participant had a 100,000 lump sum and a 2% probability and therefore his expected payment was 2,000.

IF this same plan did NOT permit lump sums, would the expected payment be the anticipated benefit at retirement multiplied by a probability of the participant making it to retirement?

Terminees and retirees pose additional problems with their guaranteed payment (10 year certain) or additional probability (participant dies and spouse is entitled to payment)???

Thanks for any and all comments.

ok geniuses

have a plan with the following results:

HCE 4.11 2.06

NHCE 2.17 .70

so plan passes ADP and fails ACP

if I shift .33 NHCE deferral to ACP I have

HCE 4.11 2.06

NHCE 1.84 1.03

Now plan fails ADP and passes ACP.

Am I now allowed to treat part of the HCE deferrals as catch up (where before the shift I couldn't)?

Froze DB plan effective last September (Board authorized, 204(h) Notice given and amendment signed) Client now wants to go in for a determination letter for the amendment that freezes the plan (already have GUST II letter that was issued in December 2003). I don't think we need to go in for a letter. As always, your thoughts and ideas welcome.

Is anyone aware of a financial modeling tool for employers to see the monetary costs/benefits associated with Defined Contribution Plans (125's) versus HSAs?

I am doing some research on both subjects and think it would be interesting to compare employer savings for each type of plan. I think there are compelling financial benefits to each for employers and employees but I have not seen a financial comparison.

It appears the following bands will satisfy the "regular intervals and smooth increases" tests under the final regulations.

<3 years of service .6% Contrib

3 to 5 yrs 1.2%

6 to 8 yrs 2.4%

9 to 11 yrs 4.8%

12 to 14 yrs 9.6%

15+ years 14.6 %

Obviously the owner is the only one with 15+ years. Does anyone see anything wrong with using this formula? Thanks.

I am looking for a plan document provider who has a document for a government plan - preferrably a Prototype, on a per document basis. I have a inherited a small Govt. plan for which the prior TPA used a regular prototype DB by overriding certain non-applicable sections, such S417(e)(3).

Someone, please confirm my thoughts on this senario:

I converted a traditional IRA to a Roth IRA, over 5 years ago at $10,000.

Today, the Roth is worth only $8,000.

May I withdraw the $8K without owing any penalty, or taxes?

Thanks for your help.

I understand that there are two "reasonable" ways to calculate earnings on refunds for ADP test failure. I understand the "gap" method where you just take 10% of the earnings rate for the plan year times the number of months in the gap period, where before the 15th of the month you can essentially round down the number of months and after the 15th you must include the current month when counting. The second method, we call the fractional method, where you calculate the earnings for the gap period up to the time you do the distribution. We have also used the 15th as the break point so before the 15th we use the earnings to the end of the last month. Is there any real guidance when using the fractional method? Can you just calculate the earnings rates up to the day before you do the distribution, and use that as the earnings for the gap period?

Does anyone have a form that they use in the event that someone who was receiving minimum distributions can fill out to stop receiving them? Or one where they can elect either way?

Thanks so much!

A new plan effective January 1, 2003 is adopted December 15, 2003.

According to PBGC instructions, the first premium is due 90 days after the plan is adopted.

What is the premium?

Since this plan does not have an initial liability, there is no unfunded vested liability at 1/1/03 - so the variable premium is $0.

Is there a flat rate premium? Since all employees became participants on 1/1/03 (there were 0 participants in the prior year), can they be excluded from the flat rate premium?

If a participant is due only $15 as her vested interest, is this distribution subject to the same consent rules as a $3,000 distribution? I realize it is exempt from withholding, but it seems bizarre to have all that paperwork for such a tiny amount. Is there any exception here? What is the normal TPA practice in this case? Thanks for all input!

5500 was filed with a contribution amount that was higher than what was deducted on tax return. Please tell me this is a simple amended return issue. Will the IRS/DOL levy any penalties or fines in this case? The accountant's provided me an amount than changed it just prior to filing becuase the client didn't have the cash flow to support it. Didn't tell me of course. One person plan so redoing allocation is not an issue...