What is the significance of a plan adotion agreement (prototype standardized) that was signed, but was not dated. Per the plan sponsor it was signed in 2001, but there is no date (another was adopted by 9.30.2003 - just in case) Do we have to submit to EPCRS for this and if so - what type of failure is it?

This is a multiemployer health plan that provides

health care benefits to active union members

and retirees who are not yet eligible for Medicare.

A situation has arisen where a man retired and began

paying for single retiree coverage. (The plan offers

retirees single; single plus one; or family coverage.)

His girlfriend is now pregnant and they are going to

be married. He has requested to add both as

dependents and begin paying the family rate.

ERISA 701(f) would seem to indicate that he has

the right to do so, but I would like to know the

opinion of those who deal with this type of mess

on a daily basis.

The plan is silent on the issue.

Thanks

Here's the situation- the plan allows for a maximum 50% contribution on a pre-tax and 50% contribution on an after-tax basis. The match formula is 200% upto 3% and 50% for the next 2%. So you put in 5% you get 7%. The match is made after the plan year end.

The question is this- we have a HCE how contributed the maximum $12,000 pre-tax and $28,000 after-tax. He has reached the annual additions limit in 2003 of $40,000. Basically, he just screwed him self out of $14,000 match. What happens if the plan fails ADP testing and he has to take a refund of $3,000. Are we able to then give him a $3,000 match? This would seem to cause a problem because then we would have to recalculate the ACP test.

I seem to think that annual additions is calculated once at year end and that's it. So, basically, he's screwed.

Another question: If the plan fails ACP testing, which comes out first? Match or After-tax? Does this have to be in the document?

Is anyone aware of specific IRS language covering this? My thinking is the distribution fee should come "off the top:"

For example:

Vested Benefit is $10,000 and participant elects to roll to an IRA, the IRA received $9,970 (the distribution fee is $30) and a distributable amount of $9,970 is reported on the 1099-R. If a cash distribution is taken, the gross amount would be $9,970, 20% would be withheld, and the balance paid to the participant.

Thoughts? What are YOU doing?

Do administrative expenses have to be factored into the determination of vested benefit liability for withdrawal liability purposes? If not, can they?

thx

Plan document stiplulates that termination distribution is paid as soon as administratively feasible following plan year end. Pooled annual valuation profit sharing plan. Plan year end was 08/31/03 and participant termed 06/03 and is entitled to ps cont. Can we wait until ps is funded to pay out participant? If the employer waits 81/2 months to fund is this as soon as feasible?

The facts:

Employee is a Canadian citizen and resident.

Employee works in Canada at an office that is owned by a US corporation.

Employee participates in the US corp.'s qualified retirement plan.

Employee receives an allocation of employer profit sharing contributions only.

Employee terminated employment with US corp.

Question:

Can this person establish an IRA in the US and roll in the vested retirement benefit?

Note:

I am not interested in the tax issues, I am trying to find out if this IRA can be established.

Any guidance/comments would be greatly appreciated.

client is retiring from city under Texas MRS plan. She makes about $ 30,000 a year and is contributing to 457 plan. She has about $ 30,000 in sick leave coming and plans to utilize the DROP/Partial Lump Sum Distribution with $ 60,000.

Questions:

1) Can she roll over the Partial Lump Sum Distribution into the 457 plan? It is not, in a way, earned income.

2) Is there a maximum amount that can be put into the 457 from all sources?

And, is the 457 amount separate from the sick leave portion?

I have not worked with 457s in quite a while and do not have the answers ready for some of these questions. Any other ideas would be appreciated.

Outside of the standard exclusions available (covered by collective bargaining agreement, nonresident aliens) does an employer have any other means to exclude employees who would otherwise be eligible to participate in the plan?

Company X maintains a profit sharing plan for its employees, including sales employees who earn commissions. Under the plan, employees may also make after-tax contributions. During 2002, employee A earned $20,000 in commissions and plan contributions (including after-tax contributions) were made based on these commissions. During 2003, X discovers that $5,000 of A's commissions were not properly earned and it attempts to reverse the treatment. How can the plan recoup the employer contributions and distribute the employee contributions? Under EPCRS, excess amount and overpayment are defined by reference to distributions of amounts over certain limits. To me, this would be an operational violation because contributions were based on amounts that were not properly A's compensation. Any suggestions would be appreciated.

We are looking to purchase the assets of a company that maintains an underfunded DB plan. It is our intention to not assume the plan because we do not want to be responsible for funding the underfunded DB plan. It is not a multiemployer plan. Is there any potential successor liability on our part if we definitely state in the asset purchase agreement that we are not assuming the DB plan? Any insite will be appreciated!

thanks

I take no credit for this. It arrived in my email this morning.

Red Sox and Yankees

> >

> > On a tour of Florida, the Pope took a couple of days

> > off to visit the coast for some sightseeing. He was

> > cruising along the beach in the Pope mobile when

> > there was a frantic commotion just off shore.

> >

> > A helpless man, wearing a New York Yankee's jersey,

> > was struggling frantically to free himself from the

> > jaws of a 25-foot shark. As the Pope watched,

> > horrified, a speedboat came racing up with three men

> > wearing Boston Red Sox jerseys aboard. One quickly

> > fired a harpoon into the shark's side. The other two

> > reached out and pulled the bleeding, semiconscious

> > Yankee fan from the water. Then using (autographed

> > Nomar) baseball bats, the three heroes in red beat

> > the shark to death and hauled it into the boat also.

> >

> >

> > Immediately the Pope shouted and summoned them to

> > the beach. "I give you my blessing for your brave

> > actions," he told them. "I heard that there was some

> > bitter hatred between Red Sox and Yankee fans, but

> > now I have seen with my own eyes that this is not

> > the truth."

> >

> > As the Pope drove off, the harpooner asked his

> > buddies "Who was that?" "It was the Pope," one

> > replied. "He is in direct contact with God and has

> > access to all of God's wisdom." "Well," the

> > harpooner said, "he may have access to God's wisdom,

> > but he doesn't know squat about shark fishing....

> > how's the bait holding up?"

> >

>

A participant severed employment some years before attaining the NRA of 65. The 401k plan requires lump sum distribution of all accounts at NRA if the accounts haven't been distributed earlier. Participant is now 71 but no distribution has been made. There has now been an additional failure to make an RMD. The issue is how to correct the failures. It is clear the participant needs to receive a distribution of the entire account, some of which will be an RMD. But I have the following questions: (a) is participant entitled to any deemed earnings on the account balance as it was at 65 (when it should have been distributed to him); (b) assuming the value of the account is less now than it was at 65, is the employer required to make up the difference (if relevant, at all times the participant self-directed investment of the participant's accounts); and © given that this was one participant out of many, any reason not to consider the operational failure "insignficant" and thus correctable years later through SCP?

PS Plan is terminated. All PP have been 100% vested. Forfeiture account is used to pay expenses and offset ER contributions. The ER is not going to make any more contributions to the Plan (all are discretionary) and the forfeiture account far exceeds the expenses remaining. All liabilities under the plan have been satisifed. Can the forfeiture account be returned to the ER, with appropriate tax consequences ?

1.401-2 talks alot about returning funds from overfunded DB, but not about DC plan.

Can a terninated person take a hardship? I say no, since it's considered an "in service withdrawal". Someone in my office insists he took one from his prior 401(k) after he left the company.

In this specific case, this person (no the guy in my office) needs only $2500 and the plan does not allow for partial withdrawals.

I forgot where I read that in order to satisfy the safe harbor allocation under the permitted disparity regulations, that the plan must use full plan year compensation and cannot limit comp paid while a participant.?. Does anyone recall where this is clarified? Thanks

Never mind. Regulation 1.401(l)-1©(28) makes reference to compensation defined in Regulation 1.401(a)(4)-12 which does allow for inclusion of only comp paid while a participant.

DO YOU KNOW OF ANY WEBSITE THAT CAN SHOW ME A COMPARISON BETWEEN THE TWO? OR IS THERE SOMEWHERE WITHIN YOUR WEBSITE?

I have just taken over a plan where the prior posttax contributions have been combined with the newer pretax contributions in each account. I have also discovered that terminated participants have rolled their total accounts over to IRAs without any separation of the two contribution types. Since the funds are comingled, are the tax benefits of the posttax dollars lost and now become taxable?

We are a TPA firm with a few 401(k) Plans that do not have an institutional trustee or custodian. We prepare the 1099s for these Plans. In the past the Plan Sponsors have prepared the Form 945, Annual Report of Federal Taxes Withheld, but we are thinking about providing this service. We currently use 1099Pro software to prepare the 1099s, but it won't do the Form 945. Does anybody have any recommendations for software that will do both the 1099 and the 945?

A client has challenged the claims procedure language in our SPD. In researching this, the only cite I can find is to 29 CFR Sec. 2520.102-3(s), but this, apparently, only addresses the claims procedure for a group health plan. Can 29 CFR Sec. 2520.102-3(s) be relied upon for the SPD for a pension or profit sharing plan?