I just finished my taxes and decided to do the $3,000 to an IRA (b/c I am not eligible for company profit sharing plan for another year, etc.). Here's what may end up being a stupid question . . . am I able to start an IRA for 2004 (knowing that I am not eligible for the company profit sharing plan in 2004) and start contributing (bit by bit) through the year (2004) rather than having to come up with the $3,000 (or higher applicable limit for 2004 - I'll look it up later) when I do my taxes? I think so, but wanted to run it by you.

A property management company maintains a 401(k) plan. As part of the agreement between the management company and the property's owners, the management company has the responsibility to employ, supervise and direct, and fire all employees of the Property. In addition, the management company determines the actual number of employees that the property will need.

In some cases the employees are named employees of the management company. In other cases they are named employees of the property's LLC, partnership, etc. In all cases they are again, hired, fired, and directed by the management company.

The management company considers all of these employees as common law employees and thus able to participate in the management company's 401(k) plan.

It sounds to us like they are all common law employees by definition, but the fact that some are employees of the property has raised some question.

As always, thanks for any opinions.

A, Inc. is owned equally by 3 Partners.

A, Inc. owns 50% of Company B, A Joint Venture

Company C is owned 100% by one individual

Company C owns the other 50% of Company B

Both B & C have their own 401(k) plans. The document for each plan contains language specifically excluding the employee's of either company B or C.

Is this a Control Group? If yes, can the ADP/ACP testing be performed separately for each plan or must all testing be performed on an aggregated basis?

Any help is greatly appreciated!

HCE terminated employment 12/31/2002 but had compensation and hours in 2003 due to payout of vaction time with $0.00 deferrals. Do I include him in my 2003 ADP as a HCE with a 0% deferral rate?

i have a SH 401(k) with basic match and that has a PS component. For 2003, if the employer only makes the mandatory match and does not do an additional PS contribution, do i have to make an additional top heavy contribution? i read this in one of my resources:

With the enactment of EGTRRA, a 401(k) plan providing a safe harbor match contribution will no longer be required to provide additional employer contributions to satisfy the top-heavy minimum contribution rules so long as no other employer contributions are made to the plan. [i.R.C. § 416(g)(4)(H)] In addition, even if the exemption does not apply, matching contributions can be taken into account in determining whether an employer has satisfied its top-heavy minimum contribution obligation. [i.R.C. § 416©(2)(A)]

just want to make sure i'm reading this correctly.

thanks for the help.

Looking for consus.

A calendar year plan requires age 21 & 1 YOS for participation. Entry dates are 1/1 & 7/1 coincident/following the date the eligibility is met.

An employee hired on 1/1/02 who terminates on 12/31/02 obviously will have no benefit under the plan.

What about an employee hired on 7/1/02 who terminates on 06/30/03 and who has 1000 hrs credits for 2002 & 2003? I say, he does not accrue a benefit.

I have an individual who is looking to establish a 1 life 401(k) plan for himself, as a sole proprietor. While discussing with him though, it came out that he may or not really be a sole proprietor. Apparantly he works as an employee for a company, but "does some work on the side" which is what he is looking to use as the basis his retirement plan. I think that answer in itself is enough to raise my doubts as to whether he can sponsor a plan, but I was curious as to what "requirements" or proof is needed in order for an individual/organization to sponsor a qualified plan. I would think an EIN for starters, but what other proof would you look for?

I had a new plan with a short plan year, 1/1/02 - 10/31/02, and I filed a 2002 5500 From. Now, I am working on the 11/1/02-10/31/03 Plan Year. What form do I use?

A 401(k) plan with only elective deferral contributions was Top-Heavy for 2001, however the employer never made the minimum T-H contribution. Is this considered an operational failure of the plan that would need to be filed under EPCRS? If so, which program.

1. Under current law, am I subject to DRC for 2004 under the following:?

1/1/04 RP CL%, i = 105% = 5.51%: 83.0%

1/1/03 RP CL%, i = 120% = 6.65%: 83.9%

1/1/02 RP CL%, i = 120% = 6.85%: 93.4%

1/1/02 RP CL%, i = 105% = 6.00%: < 90%

1/1/01 RP CL%, i = 105% = 6.21%: 103.7%

In other words, for my 04 volatility test, can I use my 02 120% result or must I recompute 02 and use at 105%?

2. For DRC, in determining whether I am above or below a 100 participant count for all DB plans of an employer, are participants in collectively bargained plans counted (ie., plans run by a union in which employees of the employer participate along with employees of other employers)?

Question: A white coller employer (roughly 100 employees) wants to discontinue their unreimbused medical FSA because employer isn't comfortable with the $ exposure. Other then lowering the limit, what if any alternatives does the group have. If they take away the medical FSA altogether, is there something else employer could offer to those employees that would achieve the same or comparable pre-tax benefit?

What happens when an employer that contributes to a multiple employer (NOT multiemployer) plan goes bankrupt? Are the other contributing employers forced to take up the slack?

ERISA provides that when a "substantial employer" withdraws from a multiple employer plan, the employer is liable to PBGC. I presume that if a substantial employer goes bankrupt and ceases contributions to the plan, that is a withdrawal, and the PBGC has a claim that it must pursue through bankruptcy. If the PBGC cannot recover the entire amount, are the remaining employers stuck with the liability?

ERISA is silent as to what happens when a "non-substantial" employer goes bankrupt and ceases contributions. Apparently the PBGC doesn't get involved. That leads me to believe that the plan has a claim against the employer for a share of any underfunding and that, if the plan cannot ultimately recover from the employer, the remaining employers are left holding the bag.

Is that correct?

Has anyone heard of a requirement that self administered medical reimbursement plans have a bond? ERISA Section 412 requires a bond of "every fiduciary of an employee benefit plan and every person who handles funds or other property of such a plan" EXCEPT "where such plan is one under which the only assets from which benefits are paid are the general assets of ... an employer," All the plans I see are paid out of general assets and I don't know any that have a bond. ALso, I have never seen the DOL comment on this. Have I missed something? Thought,comments, as always, greatly appreciated.

I have been looking at a VEBA document that was prepared in 1996. I noticed that there's no mention of COBRA, FMLA or HIPAA in the document. Should this document have been updated to include this stuff?

If John was terminated in 2003 and his employer agreed to pay him severance for

a year can he take a distribution before the end of his severance?

A husband and wife are both participants in a qualified plan and both timely signed 242(b) elections. The husband dies. Can the wife rollover her deceased spouse's distribution into her account under the Plan and defer receipt of benefits pursuant to the 242(b) election?

Participant dies in 2003, and the beneficiary is his brother, who receives the death benefit payment in 2003, as a rollover. However, when does he have to pay the taxes on that amount he inherited? Does it have to be in the year he received the benefit? What's the deal with the 5-year rule??? What are the beneficiaries options on paying the taxes from the benefit?

Thanks.

What recourse does an employee have upon discovering that her 401k account is being charged significant fees that were not explained or disclosed by her employer when the employer implemented the 401k plan 6 years ago. She formally requested that the employer (Plan Administrator) furnish a complete disclosure and explanation of all employee-paid fees over 3 months ago, however the Plan Administrator has failed to respond to her request.

About 6 years ago, my friend's employer abolished its pension plan and established a 401k plan. She decided to participate in the new plan, however recently discovered that she is being charged numerous and significant fees that were not disclosed by her employer before she decided to participate in the 401k plan. In fact, to date the employer has failed to fully disclose or explain all employee-paid fees. She is 56 years old, strongly feels that her employer provided incomplete and misleading fee information when the plan was established, and would like to withdraw all her assets from the 401k plan and "roll them over" into an IRA. Two questions: 1) Can she do this without incurring an IRS tax penalty? 2) If so, how??

Sole proprietor will claim SEP deduction on 1040 to be filed before 4/15, but will need the refund and additional time to raise the money to fund the SEP. Second extension at 8/15 will need a reason. How does the following sound?

"Additional time needed to fund SEP under IRC 404(h)(1)(B) and Rev. Rul. 84-18"

Does the IRS even read these things?

Thank you.