Plan was amended for GUST effective April 1, 2003, with a March 31 Plan Year end. What is deadline for SPD to be given out? Thanks!

Have a small profit sharing plan (10 participants) that requires employees to be employed on the anniversary date of the plan to receive a contribution. One of the participants terminated employment prior to year end with 750 hours and therefore did not receive a contribution. However, this participant did receive contributions for the past three years (i.e. he has an account balance).

We are using the accrued to date method when testing for 401(a)(4). Is it correct that he should have an accrual rate even though he did not benefit this year?

Thanks.

Company A is a fully owned subsidary of a large corporation. Company A sponsors a plan with approximately 2,000 participants.

One entire location of 100 participants is being closed. Of the 100 participants less than 10 are being offered a position at another locaiton.

Does this qualify as a partial termination for the 90+ participants that are being terminated without an opportunity to complete their vesting?

I searched for and read the archived messages of the recent past about inherited IRAs... Seems to be a continuing trouble spot. So here we go again....

I have this situation: Mother with Trad. IRA dies in 1999, RBD was 4/1/1994. No living spouse. She named her two children as primary beneficiaries. Each child has taken RMDs each year starting in 2000. Now one beneficiary wants to transfer her portion to another custodian. Our organization cannot and would not open an IRA for a deceased person. I know PLRs have clearly stated a beneficiary cannot rollover his or her portion, however, ttee to ttee transfers are permitted.

Does this mean the transfer can be made to an IRA in the decedent's name that was preexisting at death (another inherited IRA) or are there custodians out there who will open an IRA in the name of a decedent?

Our policy now is we will do the transfer provided the new custodian acknowledges the IRA is in the decedent's name and that they will accept the inherited IRA. We also require the beneficiary to execute a hold harmless letter since our position is that this is a grey area with the IRS and we believe the transaction is not approved by the IRS.

Can anyone enlighten me further on this issue? Any information is greatly appreciated. Thank you.

FAS isn't one of my strong points. Regarding distributions, i understand distributions weighted for timing and actual distributions. However, i'm a little confused about expected distributions and the interest on them. Are expected distributions only for retired participants in pay status?? and is the interest on expected distributions only on those distributions or is the interest on the expected distributions the interest on the weighed distributions. Please help!! thanks.

If controlled group member #1 amends its plan for catch up but controlled group member 2 does not until a following plan year, what is the penalty?

Can anyone tell me what should happen when a patient has an insurance coverage change during the time he/she is admitted to the hospital? Does the coverage in effect at the time of admittance cover until the patient is discharged? Or should coverage change on the effective date of the change? What about if there is a change in the insurance company?

It would seem logical that the coverage and company should stay in effect until discharge. Seems I recall policies stating that employees or dependents who are hospitalized at the time the policy, or policy change, becomes effective, are not covered until discharged.

Now for the kicker. Is this covered by State regs, federal regs or other? A cite would be helpful?

tks

Ronc

As a TPA we receive much confidential information about plan participants. (SS#, address, etc). Does anyone know if it is required or advisable to include some type of disclosure or privacy statement in information we provide to our clients?

Thanks!

1. Can a participant just choose to have their loan deemed? Say they haven't reached the end of the cure period, but want to have their loan deemed because they say they won't be able to make payments. The loan policy says that a loan will be deemed, if at the end of the cure period, missed payments have not been made up. Would it be a violation of the loan policy to default the loan early?

2. When does the cure period end for a participant who is returning from a 12 month leave of absence? Loan policy allows participant to suspend for up to one year for unpaid leave of absence. I know that a loan goes into default after the first missed payment, and will either be deemed or offset at the end of the cure period. Is the first missed payment in this case, the first payment due after the leave ends? Example....

Participant goes on leave on 2/1/03, was current on monthly loan payments when leave commenced. 12 month period ends on 2/1/04. If he does not resume payments, would you deem after 6/30/04, because the 3/1/04 payment is the 1st on missed, or do you consider the 3/1/03 payment to be the first one missed?

Thanks

From my understanding the money you originally put into a Roth IRA can be withdrawn at anytime without a penalty. It is just the gains when withdrawn are taxed and penalized if they are non-qulified withdrawls.

What can I cite to an IRS Auditor to prove my point with the above?

I've shown her my total contributions to the Roth account based on brokerage statements which show I have more than enough contirbutions to cover the withdrawls I made.

I even pointed to parts of IRS Pub 590 (which she told me about) which state in not so many words what I am trying to get across.

Any suggestions would be greatly appreciated.

I have a rollover IRA with an institution and I want to roll over about 75% of it to another institution. I will liquidate enough assetts so that I have the amount I want to roll over in cash. The rollover form from the new institution has the option of rolling over 100%, or designating which assetts to roll over. I am afraid this will get screwed up. So here's the question: Can I use the checkbook I have from the first institution to just write a check to the second institution? I know this is not an institution to institution transfer, but I believe I could even keep the funds for 60 days if I wanted to. So could I also transfer the funds from the first institution to my bank checking account, and then write a check to the new institution? I believe I can elect no withholding in either case so that should not be a problem.

We have a situation whereby there are five taxable employers that currently sponsor five separate nonqualified deferred comp plans. All five are part of the same controlled group of corporations. For administrative ease, we are combining the five plans into one. The parent corp of the entire controlled group will administer the plan - it is a tax-exempt entity. Do we have to have one of the five taxable entities sponsor the plan? Our concern with the tax-exempt entity sponsoring the plan is whether 457(f) will be implicated. Thoughts? Concerns? Insights?

If a match for the 2003 plan year isn't going to be made until May of 2004, is there anything wrong with doing an ADP test now and then doing the ACP test after the match comes in? What are possible consequences of doing this? Thanks a lot.

Assuming the 401(a)(26) and 410(b) are satisfied and, if applicable, top heavy accruals provided, can a DB plan have a "last day employment" to accrue a benefit (other than the Top Heavy) under the plan formula?

I have never seen it yet but that doesn't mean it is impermissible.

I hate related group issues.

Car Dealer Co. & Management Firm, LLC are a controlled group. Car Dealer Co. will acquire 50% ownership in New Car Co. (the other 50% is owned by unrelated parties). I need to analyze issues if Management Firm, LLC performs management service for New Car Co.

These are my thoughts thus far:

1. If Management Firm, LLC principal business is performing management functions for New Car Co. I have an ASG with Management Firm, LLC & New Car Co. I am presuming that for the ASG to exist Management Firm, LLC would probably have to derive at least 50% of its business from services performed for New Car Co.

2. If an ASG exists between Management Firm, LLC & New Car Co. are ASG that doesn't necessarily mean that Car Dealer Co., Management Firm, LLC & New Car Co. are treated as a single employer. What it does mean is that I have overlapping related groups & then there are competing views as to whether or not those overlapping are treated as a single employer.

Am I on target here or way off base?

Thanks in advance for any guidance.

A sponsor has deposited more than the maximum permitted match into many participants' accounts. Does this "excess" (adjusted for gain/loss) have to be transferred to the forfeiture holding account, to be applied toward future employer match, or can it remain in the participants' accounts and be applied toward their current required matching contribution?

We are looking at opening an office in a state that levies a sales tax on services. Can anyone share their experiences with that? If a plan pays for our services, are they exempt from the state sales tax? If an employer pays for our services, I assume we'd need to collect the tax? Thanks for your help!

We have a safe harbor 3% 401(k) plan in place for 2004. Proper notices and such have been given and the doc is in order. The client would like to now switch to the safe harbor match for 2005 and give the 4%, which will save him quite a bit of money. His projected income for 2005 is going to be much lower (or so he thinks). I assume with proper notices and amendments, we can flip from one type of safe harbor to another without any problem? Is there such a thing as a discretionary ps/match safe harbor doc whereby each year (assume election is made timely and before the beginning of the year) they can opt as to which way they want to go????

Anyone run into this?

Appreciate any help here.

A five-percent owner of a 401(k) profit sharing plan turned 70 1/2 in December, 2003 and terminated his employment effective January 1, 2004. In connection with the termination, he elected to roll all of his plan funds out into an IRA. My understanding is that the RBD isn't until April 1, 2004. Can we allow the participant to roll all of his funds out (including what would be the RMD amount) or was the RMD obligation triggered?

If an employer defers $16,000 over the course of 2004 and his two NHC ees defer nothing-0%, the ADP automatically fails and the ER must take $13,000 as income. Is the $3000 excess amount counted as a catch-up contribution?

The rationale, as explained to me, is that the ER has unreliable business income, (and he may be a bit of a spendthrift...), and he wishes to use the returned deferrals to fund a discretionary profit sharing plan contribution for his 2 ees.