Forefitures under plan reallocate. Plan document provides that forfeitures occur upon the earlier of payout or 5 yrs break. Document further provides that if the Former Participant is eligible to share in the allocation of employer contributions or forfeitures in the year the forfeiture would otherwise occur, then the forfeiture won't occur until the first year that the former participant is not eligbile to share.

Participant terminated in June, paid out in July, rehired in September. Generally participant forfeits in July at payout, however, because she is rehired this participant is eligible to share in contribution/forfeiuture allocation. It seems to me that even though participant did not repay vested distirbution amount, she won't forfeit (in affect a restoration with no repayment.)

Just curious if anyone else has different thoughts.

A plan uses high 3 consecutive year avg for avg comp.

If employee earns 50,000 for 2000, 2001 and 2002 can his avg comp decrease?

i.e what plan provisions would be necessary for a decrease in avg comp to occur?

Thank you.

Company X sponsors a 401(k) plan. In 2002 the company's stock is purchased by an individual, Mrs. A, who now becomes the sole owner. Mrs. A's husband also is 100% owner of a similar business, Company Y. Company Y does not sponsor a plan. Company X uses a standardized plan document.

First, does the coverage transition rule apply in this case, and does that mean that for coverage purposes Company Y's employees do not need to be considered for coverage purposes until 2004?

Second, I have always been confused by the fact that the coverage transition rules do not relate to non-discrimination testing. Does this mean that regardless of coverage, the employees of Company Y must be included in the ADP testing for 2002 and 2003 if eligible?

Which brings me to my final question...for plan purposes, is the date of hire for the employees of Company Y their date of hire at Company Y, or the date of the purchase (assuming the document does not allow any predecessor service)?

Really appreciate some help with this one.

Thanks.

A participant defaulted on a loan and loan was deemed distributed.

Subsequently (in the same year), the participant resumed making his loan payments.

Had he not resumed the payments, we would reflect the deemed distribution on schedule H or I and take the loan off the books for 5500 purposes.

Now, because he is making payments, the loan should not be taken off the books, and I assume the deemed distribution should still be reflected.

How do you bring the loan back into the 5500? Would you adjust the regular distributions? I was tempted to do that, but this was the only distribution during the year and I could not obviously enter a negative amount under the distribution (Relius won't let you.)

Does anyone have any insight?

How long should copies of COBRA notices be kept?

An employer has a high deductible health insurance plan. The employer wants to set up a cafeteria plan and contribute various amounts, pre-tax, to the plan for the employees to use towards the high deductible. However, the employer only wants to only make available to the employee the amount contributed to date to the plan on their behalf. Can an employer do that or does that fall under the uniform coverage rules.

If the employee elects to put in their own money, the employer is okay with making the whole year's election available for claims reimbursement...but wants to limit the availability of the employer contributed piece.

401k CT P/S plan that excludes by job classification. Last year(12/31/02) ee was in an eligible job class and received contrib. as of 12/31/02 her job title changed and she is not eligible for any contrib's for 12/31/03. Plan is top heavy for the 2003 plan year. would she be elig for top heavy min ? if so why(i don't think so).

A 401(k) plan is eliminating an optional form of benefit. I thought the 411 regs. required the plan to provide notice to employees at least 90 days before the distribution option was eliminated. I have just been advised that EGTRRA amended the statute and removed this requirement, so the notice requirement in the 411 regulations no longer apply.

Is a Plan still required to provide at least a 90 day notice of elimination of an optional form of benefit. I understand it is good PR, but is it requried ? Anyone know where I can look in EGTRRA to confirm the statute was amended ?

Thanks.

Hyper

i dont know alot about 403(b)'s but i remember doing some research and seeing that you really can't terminate a 403(b) plan. does anyone know whether you can terminate a 403(b) and if so the methodolgy? this particular plan has both employer contributions and deferrals.

Does anyone have a sample letter they have sent to the IRS asking them to abate the 50% excise tax on a required minimum distribution that was late?

Can a nervous adopting employer obtain a private letter ruling for a new 457(f) [inleligible] plan?...under Rev Proc 2003-1? Anyone done this lately?

I think I know the answer, but would like to confirm.

Employer who sponsors a top heavy plan is a member of a controlled group with another company. Some employees work for both entitities.

For the top heavy plan, is the 3% based only on 415 compensation from the employer who sponsors the plan and not on combined comp from both members?

P.S. The plan passes coverage including the the other members employees and the document excludes compensation from the other controlled group member in the regular definition of plan compensation.

If anyone can confirm, I would great appreciate it!

Thanks

I have looked at the Puerto Rico plan threads on these boards, but have been unable to find the answers to the following questions. What are the requirements for qualification under the Puerto Rico tax code? Do you need to submit one qualification application, or do you need to submit periodically (as with the IRS)? Is there are form for a qualification application?

We are having trouble locating some primary authority on the following issue.

Can a government money purchase pension plan make in-service distributions to participants who have reached age 70.5 (if the plan so provides)? We wanted to see if anyone else has any thoughts on this issue. (Our thinking is that such a distibution would be permissible and would not be a prohibited in-service distribution).

TPA has Client X which maintains a qualified plan subject to ERISA. For 2001, the Form 5500 was not filed. The IRS has issued a notice to Client X imposing a penalty of several thousand dollars. Client X has not received a notice from the DOL. If Client X files under the DFVC program, will the IRS penalty be abated?

I have medical practice "A" as a client and "A" maintains a 401(k). Last year the doctors of "A" created their own separate practices. Each doctor receives $40,000 from "A" as well as receiving a K-1 for their own practice. They have not updated the plan docs to reflect the CG/ASG rules, and do not think they have any intention to.

The attorney who drafted the plan says that I can't use the income from the K-1s since they have not updated thier plan to reflect the new entities. The doctors obviously want me to use their K-1s as part of their income so they can get a larger profit sharing contribution.

I am leaning with the attorney since the new practices have not adpoted "A"s 401(k), eventhough they are a CG/ASG. All of the employees are in "A", the doctors are the only employees in their practices.

In addition if I use both incomes, I would assume that I would have to reduce the K-1 income but not the W-2 income.

Thanks

An employer has discovered that one of his employees provided false information (ID, SSN, etc) and is an illegal alien. After the discovery the employee was terminated. The employer sponsors a discretionary profit sharing plan. The illegal alien received allocations in the plan.

In a way, this is somewhat of the reverse of an otherwise eligible employee not having received a proper allocation and the plan sponsor's taking corrective action to provide benefits that the employee should have received.

Does that fact that this person provided false imformation that resulted in his employment and coverage require corrective action to reallocate his account balance to the legal employees who would have otherwise received the allocation or is the plan required to distribute the benefits ?

Thanks,

Thomas Pritchett, CPA

An employer has discovered that one of his employees provided false information (ID, SSN, etc) and is an illegal alien. After the discovery the employee was terminated. The employer sponsors a discretionary profit sharing plan. The illegal alien received allocations in the plan.

In a way, this is somewhat of the reverse of an otherwise eligible employee not having received a proper allocation and the plan sponsor's taking corrective action to provide benefits that the employee should have received.

Does that fact that this person provided false imformation that resulted in his employment and coverage require corrective action to reallocate his account balance to the legal employees who would have otherwise received the allocation or is the plan required to pay him the benefits ?

Thanks,

Thomas Pritchett, CPA

Does anyone know of a source to obtain these table values?

I have a Plan that requires 1000 hours for a participant to receive an allocation (integrated PS) for any given year. I am getting a warning that I am failing the "Special" ratio percentage test because I have more than 30% of my NHC Group that is only receiving a 3% TH contribution and not the full contribution since they only worked 700 hours during the year.

Assuming that my document would allow it, do I need to ensure that some of these "not benefiting" participants receive the full contribution vs. just the TH 3% minimum that they are currently receiving? If I test the Plan under the 401(a)(4) General Test and pass, is this sufficient?

Any thoughts would be greatly appreciated - I reviewed the 401(a)(4)-2(b)(4)(vi)(d)(3) Regulations and "surprisingly" become more confused.

Thanks

RDS