OK, I'm new to the Relius Proposal System. I understand that you can't use Classes in Relius Proposal if the entity is a sole proprietorship or partnership. So, if the sole-prop's income is less than 205,00, what is the simplest work-around for this?

Can someone please clarify for me?.... This is a general question, I do not have a plan in mind when asking the questions.

Say we have a DC plan subject to QJSA/QPSA requirements.

Would a participant only need to sign the waiver if he is choosing to name someone other than his spouse as the beneficiary, at which point the spouse would have to consent?

Why would he sign the waiver if his spouse is the beneficiary?

Thanks!

Editing to clarify question.

Say a one person plan has 100,000 rolled into the plan from a prior company 401-k plan at its inception. Clearly the DB funding req. would not incorporate the rolled over amount as part of plan assets.

The question is in future years how might you determine what the value of that rolled over amount is for val purposes if such amount is integrated with all investments?

Any guidance out there?

Thanks.

Could someone please direct me to the most recent guidance on the extension of time for amending DB plans for compliance with the required minimum distribution rules? I was not sure if Rev Proc 2003-10 was the most recent guidance.

Many thanks.

A new client has discovered he's very tardy in filing his 5500ez's for his m/p & p/s plans, back to 1998! I have software for every year except 2000. Is there a software package that can be accessed via Web that will allow me to prepare & print 2 5500ez returns without charging an arm & a leg?

Can a non-top-heavy plan have a safe harbor non-elective contribution of less than 3%??

There are three partners in an LLC that is taxed as a partnership. Each partner established an S-corp which holds the partnership interest. Each s-corp would like to establish their own SEP. There are no other employees in any of the companies. The three partners are all key employees of the LLC. Is there any reason they should not have SEP's for their individual companies?

I, a TPA, am in partnership with a mutual fund company. I am producing participant statements. The fund company president wants the fund names on the participant statements to show the share class (there are 2 classes). He feels that to not do so would invite possible regulator inquiry regarding failure to disclose.

I think that the participant statements would not be looked at in that light and that the enrollment/education material is the germaine material to review for proper disclosure.

Would Participant statements be looked at as a Fund company disclosure item in this way?

Thanks for any lead or insight...

If all the employees of a company are considered Highly Compensated (earnings in excess of $90,000.00 annually), and several elect to participate in DCAP, does this pose any problems with the 55% average benefits test?

As a contract employee with a federal government agency, I am awareded an hourly dollar amount (known as Health & Welfare funds) that may be used toward the acquisition of group medical and dental insurance plans provided by the employer corporation. This is a set amount provided in addition to one's hourly wage.

The employer corporation also makes available a 401(k) option of elected contributions of up to 15% of one's gross salary. In addition, the policy states that the employer will match the first 5% of elected contribution - not to exceed 2.5% of the gross annual income.

However, no matching funds come from the employer, as they have defined the employer match as a "benefit" - further defining that H&W funds cover our benefits, and therefore must be used for the match.

Bottom line, it is mandatory for employees to provide the 2.5% employer match with their own H&W funds - of course, in addition to their elected contributions.

Is this approach appropriate?

The ratio percentage test requires that the percentage of NHCEs benefiting under the plan be at least 70 percent of the percentage of HCEs benefiting under the plan. What is the ratio percentage in a setting where you have 19 employees, 17 of which are HCEs who participate in the plan and 2 of which are NHCEs who are excluded because of years of service required? Is the answer really 0% ((0/0)/(17/17))?

I am a Union representative. Recently the Union filed, and won, an arbitration in which the employer was found to have unilaterally reduced benefits in the health plan. The arbitrator directed the parties to meet to calculate an appropriate remedy. The Union made a demand for information so that we could calculate how much each bargaining unit member lost because of the reduced or eliminated benefits because of the employer's unilateral reduction in benefits.

The employer is trying to hide behind HIPAA privacy regulations. I do not believe this is appropriate for the following reasons:

1. Under state law, the Union is the collective bargaining representative and has a legal right to information necessary to enforce the contract.

2. I believe that, under HIPAA, the Union is each employee's personal representative.

3. This may be a stretch, but isn't the Union at least a business associate, with rights to information?

I would really like to hear any opinions, get any citations of law or regs, or any government documents that deal with this issue.

Ben Schutzenhofer, CEBS, Research Director

Illinois Federation of Teachers

Based upon the information & examples below, are we calculating the taxable income to impute employees correctly?

The Child Life example resulted in a credit. Can I apply the credit to the other taxable amounts as an aggregate amount to be imputed?

I am sorry for the length of the question. I wanted to display each component of the process we use:

My employer sponsors the following Life plans:

Basic Group Term Life Insurance (1.5 X Salary) employer paid

Supplemental Life (Increments 1x to 6x Sal) employee paid

Spouse Life (25K, 50K or 100K) employee paid

Child Life (5K, 10K or 25K) employee paid

Listed below are hypothetical elections to set up an example:

Basic: 1.5 X 200K Salary minus(-) 50kexemption = (250K is taxable to be imputed).

Supplemental: 1 X200K = (200K taxable to be imputed)

Spouse: 50K = (50K taxable to be imputed)

Child: 10K = (10K taxable to be imputed)

Listed below are the employee premiums paid after taxes:

Basic: $0 (100% employer paid)

Supplemental: $25 per Month (100% employee paid)

Spouse: 50K = $10 per Month (100% employee paid)

Child: 10K = $1 per Month (100% employee paid)

Imputed Income Calculations:

Basic: $250K / 1K X (Age 50 Table 1 premium) .23 = $57.50

Supplemental: ($200K / 1K X (Age 50 Table 1 premium) .23) - $25 (ee after tax premiums paid) = $21.00

Spouse: ($50K / 1K X (Age 50 Table 1 premium) .23) - $5 (ee after tax premiums paid) = $6.50

Child: 10K = ($10K / 1K X (Age <25 Table 1 premium) .05) - $1 (ee after tax premiums paid) = (-$.50)

Total Taxable Amount to be imputed:

Basic: $57.50

Supplemental: $21.00

Spouse: $6.50

Child: 10K = (-$.50)

Total Taxable Amount to be Imputed: $84.50 per Month/$1,014 for the Year

Thank You,

Jim Tierney

Partner with greater than 10% interest in a p'ship may take out a loan from p'ship qualified plan, per PT exemption under EGTRRA. However, plan is being amended to name individual partners as named Trustees.

Would not loan to partner now constitute a PT, despite the EGTRRA exemption?

I have a business that supplies temp employees to other companies. There are 9 out of 30 employees that broker the 1000 hrs in 2003. (all w2 income and the company is a S-corp). I heard that agencies that operate with temp employees have to count them for the testing rules, but don't have to offer the plan to them?

Also, can I still set up a 401k plan w/PS for 2003? or did I miss the boat. Any suggested guidance/ideas are welcome.

In a 401k plan, what is the best way to remove the discretionary profit sharing accounts altogether? There will be no future discretionary profit sharing contributions, and we will 100% vest these accounts. The client wants to pay all participants their funds in these accounts to simplify recordkeeping. We could add in-service distributions using the "2-year rule" but that would not permit us to distribute all funds at this time. The 401k deferrals and matching contribution funds would stay in the plan and these contributions would continue. Thanks for all your input and ideas...

A Plan operates for the first several plan years as a calendar year plan with a 6 month wait. To make things easier administratively (enrollments, etc) they set up dual entry dates of April 1 and October 1.

Later the Plan is amended to a one year wait. If the entry dates remain April 1 and October 1 is this now a violation of the statutory entry?

As always, thanks for any insight.

Plan was effective in 2003 (effective date of deferrals was also in 2003). However, no deferrals or matching contribs were made, nor were any other benefits accrued in the 2003 plan year.

Can the employer use the deemed 3% for both adp/acp testing in 2004, as there weren't any contributions made in 2003 or do they have to amend the plan to use current testing?

Last year the rank and file received a 10% SEP contribution. Due to miscalculations of partners' income, the partners received a bit more than 10%. What are the ramifications and what are the options for correction?