We have a plan that is debating about going to either a 401(k) Safe Harbor Plan or a New Comparability Plan. The eligibility for the current profit haring plan is entry on Jan. 1 after 18 months of service. Can we maintain this eligibility or do we have to reduce to 1 year of service for either Safe Harbor or New Comp.

Are you required to send a tax notice to participants prior to offeting their loan after termination? (I would assume so because it is eligible for rollover)

Does a participant need to consent to an "in-service" distribution to offset their loan? Example: Participant is 60, has defaulted on his loan, and plan allows in-service distributions. Does he need to consent to the "in-service" to pay off (offset) his loan? Are we required to send the tax notice? Also, if he does not consent and it goes past the cure period, do we now have to deem the loan?

Thanks for your help.

We have a cafeteria paln with dependent care & health care spending and pre-tax medical premiums effective 1/1/2004

Can the plan be adopted anytime before the end of 2004?

Or must it have been adopted priro to 1/1/2004?

We are an LLC

Can VP of HR execute plan document if not a member of LLC

Who tyically should sign the doc? must it be an officer ?

I'm a first-time participant in a flexible spending acct this year; we put in $750 for my son's cleft soft palate operation, which ended up costing less than we expected. So it would appear we may have thrown away some cash, but here's the twist:

My company's health insurance this year switched to a group called Definity that works through a regular PPO (Beechstreet), but essentially gives you an account, called PCA, that is used to cover the first $1,500 of the $2,000 deductible. AND, unlike flex spending, money you don't use from your PCA carries forward to next year.

SO, it makes sense to me to ask Definity to let me cover the first $750 myself out of flex spending, but their rep tells me there's no way to do that. Is she right? Anything else I might think about doing?

I'd appreciate any help on this subject that I find so confusing.

I have a client whose CEO wants to make elective deferrals to a 457(f) plan. He completely understands that his elective deferrals must be forfeitable. The question is, can he make an annual election as to the amount of the elective deferral (in December of each year, he would make an election as to the amount to be deferred in the following calendar year) or does he have to make a one-time upfront election for all years of employment? We can draft the plan either way.

I have an employee who took 8 weeks of FMLA after the birth of her child and is coming back to work; she is eligible for 12 weeks of FMLA

Can she take the addiitonal 4 weeks as long as it's before the 12 months after birth?

Her parents from India are coming to visit for a month in the summer to see their little granddaughter and the employee wants to take the additional 4 weeks then rather than the 12 weeks now.

In determining Top Heavy for 2004,

determination year - 1/1/03 to 12/31/2003

12/31/03 determination date

It is not a new plan.

the catch up contribuitons for 2003, made by the key employees , are they subtracted out of the 12/31/03 balance?

Here's the scenario:

This is the first year that matching contributions were made. So last years 12/31/02 nondiscrimination testing did not involve an ACP test.

Matching contributions were made in the 2003 plan year however, so an ACP test will be done. What will be used for the prior year test percent? Will it be 0% or the default of 3%? I'm thinking that the 3% can only be used for a new plan in their first year of testing.

Has anyone come across this? thanks for the help.

Does anyone know of a free social security calculator, preferably one that could be used in Excel as a worksheet, if not as an add-in. I've tried to use the online calculators on the ssa.gov site along w/ the detailed calculator available for free d/l. Assumptions changes are not available for the online calculators and the d/led executable one is not that great, in my mind.

Thanks.

I know this topic has been discussed before, but I thought I would revisit it in light of the recent filing deadline for GUST restatements.

It's my understanding that an amendment to change testing methods could be made up until the end of the GUST RAP. For those plans that filed for determination letters by the end of January, is the GUST RAP now extended for 91 days after the date the determination letter is issued (per Reg. Sec. 1.401(b)-1(d)(3)). If so, can an amendment changing the testing method still be made within this timeframe?

We took over a Plan and discovered that they did not pay the 3% Safe Harbor contributions for 3rd and 4th Quarters of 2002. Last week, they calculated who should have received what and sent it in. But they passed the 12 month following the end of the Plan Year rule. What corrections need to be done? Is it similar to late EE deferrals? Any help on thsi one would be appreciated. Thanks!

If a PS Plan has a 21 & 1 eligibility but with a 401(k) feature eligibility of any and any, in doing the average benefit test of the cross-testing, do you include those participants eligible for the 401(k) but not yet eligible for the PS? If yes, please include citations. Thanks.

Roman

Here's a softball for you:

I'm a student, in the 10% income tax bracket. I have a traditional IRA valued at $200K, which I'd like to convert to a Roth.

At which rate will I pay tax on the conversion -- my present rate or the 33% marginal rate (as if I "earned" $200K + this year)?

Thanks for your help.

Hello,

I have a question that I am having a hard time getting an answer for and thought I would run it by--

I currently have a 401k account valued @ 200K and of that there is 19k in after tax dollars. I have contacted the administrators and was told that the plan allows for partial withdrawls and in order to get the 19k I would have to take 35k (19k in afer-tax and 16k in pre-tax)

I would like to roll this money into a traditional IRA (and understand that I would have a 16K tax event) and then convert to a Roth IRA.

The question is can I put both the pre-tax and after-tax dollars into the IRA since it is being distributed from a qualified plan? If so how do I report this on my tax returns.

Not trying to get the money but just trying to get it into a tax free growth vehicle with a minimal tax event.

Thanks for any responses

Say we have a 5% owner receiving a RMD after age 70 1/2 as an annuity.

If he actually retires at age 80 would he then be legally allowed to take a lump sum of his accrued benefit?

401(a)(9) gives me the impression that the RMD annuity cannot be increased for such a reason.

Any thoughts?

I've always understood that noncontributory health plans require that 100% of employees participate in the plan, even if they have other coverage. My client is arguing with me, and wants a cite to confirm my position. The group application (which they signed) does say this. What they are trying to do is pay 100% of premium for those who want (need) the health insurance and compensate the other employees in the form of wages. We've suggested the 125 plan approach, but they have objections to that as well.

Is this a law, an underwriting practice, an insurance company rule, not a rule at all, or a figment of my imagination?

I'll try to make this as brief as possible. We have a client who had an annuity for her 403(b) salary deferrals through her school. In February 2001, her investment advisor rolled that annuity contract into a traditional IRA and everyone apparently signed off on it: the securities firm and the plan administrator. The problem is, she did not have a triggering event to make the rollover eligible. We have finally figured this all out and we have established her a new 403b. In the meantime, her IRA has been receiving her pre-tax salary deferred contributions as IRA contributions. We want to do a rollover reversal, but I need to know for my client what kind of penalties we may be looking at. Our boker/dealer has been suggesting a letter of instruction signed by the client and the employer-but their main focus in the language is that they are not held responsible for any potential penalties (but no one can tell me what those penalties may be!). Also, this client will be retiring in July, so I don't even know if it is worth it. Maybe we just leave it alone and hope no one notices? This seems to be a very unusual situation, so any advice would be helpful, Thanks!

Ouch..... Auditor discovered that when Plan was restated for GUST, the restatement inadvertently did not include the original 2 Yrs service eligibility requirement. Administration of plan and SPD continued as though 2 yr eligibility was in place. Problem can be solved by either

(a) make-up contributions for those who actually were not intended to be covered and did not think they were...

(b) going through VCP and hoping for forgiveness

Is there another simpler, cheaper, faster, safe solution?? THANKS

Are there any liability issues with the following scenario?

Carrier receives rollover distribution paperwork without their required letter of acceptant.

The letter of acceptance is from the new carrier which aknowledges the participant, what type of account the money will be rolled into, and aknowledges the eventual rollover.

Former Carrier does not notify participant of incomplete paperwork for over 3 months.

The participant is upset that the distribution took so long.

Plan Sponsor wants to know if he bears any fiduciary liability because of the delay. What can I tell him, or what codes can I show him?

I have a money purchase plan that adds forfeitures to the employer contribution. They have about $9K in forfs to add to their contribution this year. Their contribution is 25%. Is there a problem adding the forfs on top of the 25%? Two participants get $40K instead of 25% because of their comp. Is this contribution still ok? Thanks for any help you guys can give me!