We are taking over a DB plan that has been in existence since 1977. It is a not for profit corp. Right now we have the pre-GUST (TRA 86) indiv. designed doc. (The GUST doc has been adopted and a copy is on it's way to us.) The document defines NRA as age 70. I was under the impression that NRA could be no later than age 65 and 5 YOP. Can anyone let me know if NRA = 70 is an acceptable document provision according to the IRC? Thanks.

Here's the situation: employer was bought out and according to the info provided to me, the plan was "merged" with the w/the purchasing employers existing plan as of 1/1/04. Even though the assets were not yet transferred, would 2003 (calendar plan year) be their final filing? Or is the plan not terminated until all assets are transferred out?

Thanks in advance for your help.

Rachel

Hello there,

My husband and I are planning on going into a separation agreement, and it's pretty much uncontested.

He's been with his employer for 14 years, and we've been married for 7 years.

I don't work, I have Lupus .... and haven't for 8 years.

He has a pension, and I know that I'm eligible for a portion of that, but our question is ... am I able to get that with the separation agreement, or do we have to be divorced?

Another question we have is: Am I able to get a lump sum or do I have to take payments, and do the payments start when he retires, or am I able to get them now? I'm 51 and he's 55.

I know it may depend on his plan ... and the way they have things set up, but does anybody have any ideas on this?

Thank you,

Dee

I have a plan that is looking to pass the ADP test and want to classify some of the match as a QMAC, and thus test up to $400 of the match as a QMAC for each eligible NHCE in the ADP test. At the same time, they do not want to move the HC's $400 to the ADP test and leave that in the ACP. Can they do this?

I have a PEO who changed their plan to a mulitiple employer plan (2003) per all the provisions/changes in the code for such a setup. When I prepare the 5500 form for 2003, must I attach a schedule T for each employer CO signed on as a participating employer, even if they do not have anyone deferring and/or no balances in the Plan? Also - how about Employer COs who leave the leasing company during the year and may or may not have taken distribution from the Plan. Is it necessary to complete a schedule T for those that are gone? Any opinions appreciated.

Also - I believe I am reading the instructions correctly, that I can list all of the employers and EIN#s on an attachment that follow any one of the exceptions in question 3 of the form (as opposed to completing a separate Sch T), however I must complete the entire Sch T for any Employer CO who does not meet any exception - agree or disagree??

Thanks in advance.

I have an employee who uses the dependent care account to take care of her husband who is mentally disabled. He attends an adult daycare during the day so that she is able to continue working and there are transportation costs for the bus he rides- does anyone know if these expenses are allowable?

I tried looking up an EIN using freerisa.com and did not get a hit. I think freerisa.com's database only includes EINs of companies that sponsor qualified plans -- can someone confirm? If true, is there another website with a database of all EINs issued by the IRS?

Thanks.

Edited version - I left out a sentence in original version - inserted below in italics.

I think Blinky should have to answer this one. (This is a real situation, by the way)

You have three businesses - corporation A, B, and C. All sell catfish fillets or fish sandwiches or some such stuff. All are owned by a combination of the parents and adult children. Ownership is such that A & B are clearly a controlled group, but C is not, at least at first glance. No stock options, etc.

They have been operating a plan as a controlled group, and came to us to take over administration. We told them that they need to get an attorney's opinion as to whether C is part of a controlled group or not. If attorney says yes, fine with us! But something was mentioned which I have never encountered - these businesses are evidently franchises, and these particular franchises are only granted to an INDIVIDUAL, not to corporations. The father is granted the franchises, then somehow farms it all out to the corporations. So is it possible that this franchise arrangement when swirled together with the ownership somehow transforms it into a legitimate controlled group? (And it isn't an affiliated service group, according to client)

I'm not sure if this is something they did on porpoise, or if I'm being fed a line. But it may be a very effishient way to conduct business. If it turns out to be illegal, I'm going to whale for the carps, and perhaps a sturgeon to perform brain surgery on the appropriate people. If the attorney won't rule in their favor, it may require an act of Cod. I thought the whole situation smelt anyway.

Under the attribution rules of 318(a)(4) stock in a company shall be considered owned by a person if they have an option to acquire it. Has anyone attempted to make an otherwise NHCE an HCE, by having the employer give them options to acquire stock?

Obviously, there appears to be a lot of smell test issues here, but I was just curious to what degree anyone has used this.

Anybody out there using Relius to process ESOP's? If so, is there a Relius ESOP users group, and if not are you interested in forming one? I'm not sure how you go about doing so, but I figured this is as good a place as any to start!

Anybody out there using Relius to process ESOP's? If so, is there a Relius ESOP users group, and if not are you interested in forming one? I'm not sure how you go about doing so, but I figured this is as good a place as any to start!

There is a law in IL, the Illinois Contraceptive Equity Law, that prohibits insurance companies that cover prescription drugs and devices from excluding coverage for contraceptives. IL is the 21st state to enact such a statute.

An employer in IL has a self-funded medical plan.

Would this law apply to that plan?

An integrated profit sharing plan calls for a 5% contribution of total pay plus 5% of pay in excess of the SSWB.

For 2003, an executive participant whose total pay is $224,330.46 gets $15,650; [5% x $200,000 + 5% x ($200,000 - $87,000)].

How much would a sole proprietor get if his SEI were $224,330.46? My calculation which is in the attached acrobat file either gets him an additional $282.50 or has an error in it. Is it correct? If not, why not? Thanks for letting me know.

Calc_SP_Cont.pdf

Does anyone know if it's legal to allow an employee to make charitable contributions using pretax dollars?

In other words we would withhold funds pretax and submit them directly to the charity on behalf of the employee.

We plan to match all voluntary charitable contributions made by our employees but would like to offer them some tax advantage if it's possible to do.

Anyone heard of such a thing?

Can a terminated employee take a hardship withdrawal instead of cashing out their balance? Wants to use to purchase a residence. What is taxable and what has to be withheld?

PS plan year is CY. Company fiscal year is CY. DB plan year ends 9/30. So we determine the 25% limit based on the DC plan year ending 12/31/2003 and the DB plan year ending 9/30/2003.

But now the company decides to "fix" the DB plan year, using a 3-month short plan year 10/1/03 thru 12/31/03. Since there are now two DB plan years ending in fiscal year 2003, does this impact the determination of the 25% limit? (teh short plan year contribution will be contributed in 2004, and the company has anticiapted that it would be deducted in 2004.)

Plan X has a percentage limit on 401(k) contributions. There is a lower percentage limit on 401(k) contributions by highly compensated employees. Plan X typically monitors the percentage limits on a payroll-by-payroll basis. For 2004, the sponsor determined that a number of participants were non highly compensated and allowed them to contribute up to the higher percentage limit. However, it has since determined that certain elements of compensation were not properly included in making the HCE determination and that these people are in fact HCEs. How should it correct this a) limit deferrals by these HCEs prospectively so that the annual deferral percentage does not exceed the plan limitt? b) limit future deferrals to the HCE percentage limit and refund past deferals in excess of the HCE percentage limit?

One person plan - Sponsor, Plan Administrator, Trustee and sole participant are all the same individual who has recently passed away. As a participant, he completed a beneficiary form listing his four children equally.

However, who now has the authority to execute those beneficiary distributions? Thinking in a larger plan frame of mind - the employer appoints the trustee and the plan administrator. Therefore, whomever has been given "responsibility" for this sole proprietorship in his estate would have to name a new trustee? Does anyone have any other thoughts on this?

Bonus question - any idea what type of documentation should be presented to the brokerage firm holding the assets to prove who the new trustee should be?

A friend presetned this scenario, and I am having a hard time coming up with an argument that allows him to change his election. Here's the situation if anyone has any thoughts:

Employee is expecting a baby to arrive in 2004, and expects to have about $4,000 in birth-related expenses, so in November 2003, he makes a 2004 Health FSA election for $4,000. Baby is actually born in 2003, and the birth expenses are only $1,000 due to a voluntary reduction in the charge for the birthing service. The birthing service is is not billed until 2004, and is reduced from 4000 to 1000 after it is billed.

I think if its not too late under the employee's plan, the 2003 election could be changed due to the change in family status, but does anyone see a way to change the 2004 election?

Joe Smith set up “Joe Smith Ministry” (501c3) and receives contributions from various church organizations. He does mission work abroad with the funds and pays himself and his wife $25,000 each as 1099 income which their CPA shows as self-employment income. Can they establish an individual 401k plan?