Can a participant in a governmental 457 plan roll over assets to a conduit IRA? That is, roll the assets to a traditional IRA and after enrolling in a new governmental 457 plan, roll the assets into the new employer's 457 plan? If so, can the rolled over monies be treated like other 457 monies?

In essence the monies will go from a governmental 457 to IRA to another governmental 457.

We administer a 401(k) plan that covers only union employees (some of the union employees are highly compensated by virtue of their compensation). Do we need to run an ADP test? I know this question may sound strange but based on Treas. Reg. Sec. 1.401(k)-1(f)(7), Example 4 (take a look at (iv)), it appears that if the plan fails the ADP test, then all of the deferrals made by union employees will have to be included in their compensation.

The IRS writes, "nless Employer T corrects the ADP test failure in the collectively bargained portion of the plan. . . all elective contributions made by collectively bargained employees for the year will be includible in income. . ." The IRS seems to be saying that a union 401(k) plan automatically satisfies the nondiscrimination test. However, in order for a 401(k) plan to be a qualified CODA (which is apparently a separate issue), it must pass the ADP test (even if it is a union 401(k) plan). I am confused!

Thanks in advance for any thoughts.

Is an entity that is organized under 501©(3), yet receives a substantial income from commercial type insurance subject to 457?

Have standard Profit Sharing Plan where participant was taking monthly installments - over his RMD amount. So RMD was satisifed and inservice for balance was allowed. He was still employed and over 5% owner. Participant passed away March 2003. His beneficaries are his son and daughter. When do they have to take the remaining amount in the plan.

I believe that since distributions had already started, that they have to take out as rapidly as it was being taken but need to verfy. Also does that need to start in year of death or year following?

Thanks for any insight.

We had forfeitures from our health FSA last year which exceeded our administrative costs. I would like to return the forfeitures to participants as taxable cash. Do I have to include participants who are no longer employed with us? If so, how do I treat the payment (subject to FICA, 1099 nonemployee compensation, etc.)?

Thank you.

In FAB 2003-3, the DOL provided guidance on allocating plan expenses between plan participants (as well as allocating expenses to individual participants). In the FAB, the DOL concluded that where a service provider's fees are determined based upon account balances (i.e., pro rata) a per capita distribution of those fees may be arbitrary.

Has anyone dealt with the converse to this conclusion? It seems the DOL favors pro rata distributions, so is it possible to allocate on a pro rata basis a service provider fee that is determined on a per capita basis? I strongly suspect the answer is not what I would like to hear, but I am curious as to whether anyone has dealt with this.

Thanks --

If a plan has J&S provisions and a participant must begin receiving RMDs, does the participant's spouse have to consent to those distributions being single-sum distributions?

Thanks.

We have a NQ deferred comp plan where a participant left the company last year and is going to receive a lump-sum payment now. He submitted a W-4 stating that he is EXEMPT from Federal Income Tax. Is the company required to take standard withholding? or can we accept the fact that he is stating he is exempt from Federal withholding?

Does a profit sharing plan that provides a flat 5% contribution to all participants have to be tested for nondiscrimination?

Currently we provide enrollment packages for new participants with hard copy prospectuses of all the funds the plan offers. We also distribute prospectuses whenever a new fund is offered. We would like to eliminate this and have hot-links to the fund family web site on our web site instead. We would give the plan administrator a small supply of prospectuses for participants without access to a computer. We would send a pin number to the employee as soon as he is eligible to participate in the plan; he would then be able to access our web site and be directed to the fund family web sites.

Does anyone know if this is common practice? What are the DOL/IRS rules on prospectuses? Anyone have any experience with this?

Thanks!

Can a company file their corporate tax return without having the completed 5500 for the same year?

Suppose a company has both a fiscal and plan year on a calenar year basis (1/1/2003 - 12/31/2003). Does the company need any information from the 2003 Form 5500 and attachments in order to file the 2003 corporate tax return?

A few employees were not notified of their eligibility to participate in the 401(k) plan for 2002 and 2003. The correction is to contribute QNEC's equal to the ADP for those years.

How are earnings calculated?

If you distribute a blackout notice to participants and do not meet the original end date on the blackout notice, is there a formal procedure to follow when you extend the time?

A special rule applies to a payment or distribution received from a SIMPLE IRA during the two-year period beginning on the date on which the individual first participated in any SIMPLE IRA plan maintained by the individual's employer (the two year period). Under this rule the penalty tax on early distribuitons is increased from 10% to 25%.

It is my understanding the two-year period begins on the first day on which contributions made by the individual's employer are deposited in the individuals's SIMPLE IRA.

Does that statement mean your two year period is counted on the first dollar contributed or the last dollar contributed?

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?