Can a 401k plan be retroactively amended to correct a failed ADP Test and not have to return the excess contributions to the employees?

Is a 10% plus (but less than 50%) partner in a partnership always an "employer" in relation to the partnership's qualified retirement plan, as "employer" is defined for prohibited transaction purposes (e.g., "any person acting directly as an employer, or indirectly in the interest of an employer, in relation to an employee benefit plan.")?

We have a contruction company that routinely lays off ee's for about 4 months in the winter. What are the rules about loan repayments during this time? Thanks

During 2003, Mr X defers a total of $ 22,000 into two separate employer 401(k) plans. The two employers are unrelated. The $22,000 is comprised of $12,000 into one plan and $10,000 into the other plan.

It is my understanding that since the two employers are unrelated, then there is no IRS nor ERISA rule which requires either plan document to have any wording regarding distributing excess deferrals in such a situation like this.

So am I correct in thinking that the employee has the full responsibility for dealing with this excess dereral matter (in other words he cannot force either employer to distribute the excess now, nor issue him a corrected W-2, nor detemine the amount of investment income attached to the excess deferral when the excess deferral is distributed to him upon retirement) ?

So the employee has to report the $10,000 as taxable income on his 2003 Form 1040 without the support of a corrected W-2 and when the employer(s) do distribute the $10,000 to him (say 10 years from now) then the employee wil have the duty to report the $10,000 again as taxable income (wihhout the assistance of an employer provided Form 1099-R that shows the $10,000 as taxable) and determine, on his own, the amount of investment income attached to the $10,000.

Any thoughts ?? ...... thanks !

Is there a pending or publicly discussed legislative proposal to impose a 20% excise tax on defined benefit lump sum distributions?

IRA may be rolled over to a 403(b). As far as I know, no separate accounting is required (unlike 457 plan). A participant who terminates employment after age 55 may take a distribution without penalty tax. If distribution includes IRA funds, the penalty tax that would otherwise apply to an IRA withdrawal is avoided. Am I missing something, or is this a loophole?

Can the employer add income to the W-2 the employee share of distribution and keep the all the money in his trust account and payout the balance over 60 months? Also could I deduct a long term loss if the balance is reduced by not being 100% vested? Example balance was $75,000 and 20,000 was vested amount according to plan.

Hello,

I recently closed my Roth IRA account (I'm not yet at retirement age.) I had contributed $2000 a couple of years ago and the total was up to $2113. I just got the check today -- and it said that $211 had been subtracted for federal taxes and $110 had been subtracted for fees. I'm confused. I thought that I could withdraw the amount that I contributed ($2000) tax free. I expected to be taxed on the remaining $113 . . . but how can the federal tax on $113 be $211? That doesn't make any sense. Also, what is the $110 in fees?

I'm going to call the company Monday morning -- but I was hoping to find some answers on here first!

Thanks!

I have $X in pre-'87 after-tax contributions in one former employer's plan and $Y in post-'86 after-tax contributions in another employer's plan. I want to take distributions of these amounts only to my conventional IRA, then convert it to a Roth, paying tax on the pre-tax amounts in the conventional IRA. In the year following the conversion, I plan to take a total distribution of the amounts remaining plans to a new rollover IRA. I'll be over 59 1/2 with AGI <$100k in the year of conversion. Even though the administrator of the plan with the post-'86 after-tax contributions has orally told me they will make a distribution of the after-tax amount alone (leaving the remainder in the plan), I've heard elsewhere this may be problematic. Can you clarify? Also I have some NUA in the plan with the post '86 after-tax contributions, does my plan have any adverse consequences in that regard-i.e. in the year following the conversion, I plan to take the shares of the employer's stock paying tax on the employer's basis. TIA

I am in the early phases of opening a Roth IRA for my wife and myself. I have looked at several of the online companies and was wondering what type of fees I could expect to pay. For instance, one company charges a flat $12.00 per month which includes 6 free trades per month and the yearly IRA management fee is waived.

Does this sound fair? Suggestions? (I need to put funds in on a monthly basis as opposed to yearly lump sums)

I'm considering starting an IRA for my husband who never stays at a job long enough to qualify for the 401K benefit (no he's not a louse, he leaves by choice ). But what happens if he actually does stay at a job for longer than 4 months and the company has a good 401K plan? Can I transfer the balance of the IRA to the company 401K without penalty?? Or is the transfer considered a withdrawal and therefore taxed??

Enquiring minds (well, just me) want to know!

TIA,

Jennifer

Employer sponsors a profit sharing plan. He is the sole owner of a medical PSC. His wife is an employee of the medical PSC and also owns 100% of a separate S Corporation. My question relates to controlled groups and constructive ownership.

Section 1563(e)(5) says that an individual shall be considered as owning stock in a corporation owned, directly or indirectly, by or for his spouse...except in the case where the individual does not own directly any stock, is not a director, etc. etc.

Who is considered the "individual". Would it be the owner of the medical PSC sponsoring the profit sharing plan?

Thanks.

I nominate:

jusducki

Pensions in Paradise

Nameless Coward-s/b anonymous coward

If a participant is using a loan for the down payment on a principal residence, can the term exceed 5 years, or if they exceed 5 years, is the loan determined to be part of the mortgage?

two adult children inherited mother's IRA; she was not required to take RMD. The children need some cash for final expenses - can they take partial withdrawal as cash (yes, paying taxes, etc. on it) and transfer balance of their inheritance into non-spousal IRA via a Trustee to Trustee transfer? Thank you.

I just found out that due to a mistake by a broker, a deposit was made to a client's corporate DB plan via a personal check. The money was supposed to go into his personal account, but this obviously didn't happen. This happened a couple of months ago.

The deposit would cover the 2003 contribution that needs to be made (and which the client's corporation would have trouble covering otherwise). Is there any legitimate way to recognize this for minimum funding purposes? I will address the paper trail issue for deduction purposes.

Participant was the original owner of Company; his son (current Trustee, etc.) called to see if his mother could keep what is now her account as part of plan assets rather than taking out and having a spousal IRA. Is this an option? Thank you.

A deferred vested taxpayer turned age 70-1/2 in calendar year 2003 and did not take his RMD in 2003. He now wants to rollover his lump-sum distribution from a defined contribution plan to his new IRA. I believe he must first take BOTH his 1st RMD for 2003 and his 2nd RMD for 2004 before he can roll his distribution to his IRA by April 1, 2004. Is this correct? Thanks for the help.

Anyone have any thoughts on what to do where it is discovered that POP deductions for a handfull of emplyees were not made on a pre-tax basis when they should have been? The error was made in prior plan years. Is it worth it to amend the 941s and w2s?