I'm piggy backing off of jhilliard's question of the expenses coming out of a plan, whether it be recordkeeping fees or audit fees. Does anybody know where it is in writing that allows a plan to do this (beside the plan document) such as an IRS reg. or notice.

Thank you

I've only used a couple of these, so I want to check my stuff here. I calculate that up to 12 people would be in the top-paid group. In reviewing lookback year comp for this client, the top 8 employees have comp more than $90K in 2003. The president of the company (who I suspect is an owner, but we can't get confirmation yet) is NOT in the top-paid group as ranked by comp.

1. Should I look at the results as a maximum number who should be included?

2. Should I only include those with comp greater than $90K?

3. Should the owner be included regardless of comp?

4. If the owner is included, does that reduce the number of top-paid people I should include? (down from 12 to 11, or 8 to 7)

Thanks for your assistance with this. These calcs always tie me up in knots.

Michael

I have a 3% safe harbor cross tested 401k plan. If there are no profit sharing contributions the keys can do the 13,000 deferrals w/ no questions.

However i get confused when there is going to be a profit sharing ( cross tested )

allocation in a given year.

Why does the safe harbor ( 13,000 deferrals plus 3% safe harbor employer contribution ) have to be brought into the mix for testing the cross tested piece?

This seems as though it should stand on its own.

Is there any website or resource out there that explains in a page or 2 what the exact tests there are in these plans that I could use to perhaps explain to a CPA ?

Needless to say I am not an administrator - I just sell these plans ( and get surprised every day by what I don't know after 20 years !! ).

Me and my wife both work and have an AGI under 150K. We are planning to set up Roth accounts. Is the $3000 limit to contributions a combined limit or can each of us contribute $3000 for a total of $6000?

401(k) Plan - deferrals only. Doctor (HCE) plus 2 NHCEs. Doctor deferred $12000 and neither NHCE deferred. In Relius, when I run the ADP test for corrections and use the "statutory exclusions", Relius gives me a QNEC amount for the one NHCE who has been there awhile. If I don't use the statutory exclusions, then a QNEC is computed for both NHCEs. I know this is stating the obvious, but because over the years I have learned to be skeptical of software sometimes...is this ok? Is it acceptable for the Dr. to give just a QNEC to the one NHCE and pass the ADP tests utilizing the statutory exclusions? It makes quite a $ difference in the required QNEC amount. Thanks in advance for all replies.

My late wife and I did a living trust with the objective of passing her assets to her kids and my assets to my kids.

What are the pros and cons of naming the trust as beneficiary for my IRA, versus naming my kids individually as beneficiaries?

I will appreciate any help anyone can provide.

Thanks.

I am a graduate student working on a project on how to create a benefit plan for a small, privately held company. Is there anyone that can help me out on where to find good information?

May an employer offer a small sum of money to an employee who opts out of the health insurance plan if proof of spousal coverage can be shown?

Would there be any problem if too many people opted out?

Not my plan but was asked by a co-worker to post this question:

In a 401K (Union) plan are there any restrictions on paying for the plan audit from participant balances?

Thanks

I have a client who sent their integrated PS allocation calculation to us for review. I have not had many plans in the past that utilized this method of allocation (or at least they didn't ask me to review it). Our compliance person is saying the allocation is wrong but wanted me to post a question to make sure.

Would it be appropriate to allocate 3 percent as a safe harbor allocation and then allocate 7.028754 percent to comp over the $87000 level?

I am being told the allocation would need to be more like:

3 percent for safe harbor, 5.7 percent (maximum integration level) and an additional 5.3 as a comp-to-comp allocation.

The goal is to maximize the key personnel.

Any help would be great!

I have a client who recently attended a seminar (dangerous situation!) where they sang praises to the idea of an "individual 401(k) plan". The big attraction he came away with was that he understood that these individual 401(k)'s DO NOT require owners over age 70 1/2 to take MRD's. I cannot find any reference to this at all. Has anyone heard of such a thing?

The plan year end period is 12/31/2003. On 12/31/2003 we receive a contribution for the payroll period ending 1/4/2004. We "bucket" contributions for both compliance testing and elective deferral tracking into either a "current" year bucket or a "prior" year bucket. We have no bucket for "next" year, Our system rolls its accumulator buckets as of the last business day of the plan year. Here I am on 12/31/2003 with a contribution I cannot invest without messing up the accumulators. My system protects itself by not allowing a future plan year contribution to be posted until the accumulators have advanced. There is a way that I can post the money, but the accumulators get out of sync and I have to manually adjust them after they "roll". Just wondering if anyone else out there has come across this situation and how you deal with it. In the past we only encountered the problem on a few plans, but now its just getting out of hand. We are using OMNIPlus to accumulate plan information.

Thanks

I recently took a distribution from my Roth and was looking to roll it over into a rollover account. Can a distribution from a Roth be placed into a rollover account? If not, what type of penalty and tax consequences are there?

with no earned income, may I move money from an existing traditional IRA to an existing Roth IRA?

Thanx!

I have a load Roth with Fidelity and want to open a no-load Roth with Vanguard. Can I transfer the funds from the Fidelity Roth to the Vanguard Roth without penalty (early withdrawal or others)? Is yes, how is this done and how is it recorded to the IRS, if necessary?

Treasury Regulation § 1.403(b)-3 Q&A 2 provides that the 401(a)(9) minimum distribution rules do not apply to the portion of an individual's 403(b) account balance as of December 31, 1986. I have heard that distribution of this pre-1987 balance can be deferred until age 75, although I cannot find the regulation (or other authority) that refers to age 75. Does anyone know this citation?

Thank you,

D.L.

We received a Form 5300 from our document company stating that our plan was designed in such a way that it no longer falls within the scope of the opinion letter issued by the IRS with respect to their prototype document. We have a nonstandardized 401K with a last day requirement to receive a profit sharing and/or matching allocation. We have not deviated from any of the check boxes. Do we have to file or is it optional?

Can anyone point me to a few good articles that summarize the proposed legislation regarding deferred compensation arrangements? I would appreciate it!

cstrong

A client purchases a small portion of a very LARGE company. In the purchase agreement, it is agreed that the client will assume control of a spun-off DB plan containing the assets and liabilities for the 40 employees is has acquired. This would be a de minimus spin-off as the PVAB for the 40 employees is much less than 3% of the assets.

My questions:

- must the plan be spun-off within the controlled group first or can it be spun-off directly to the new company (does it matter)?

- according to 414(l)-1(n)(2), it seems I need to spin off the PVAB on a plan termination basis, correct?

- anything else I need to be aware of?

By the way, just for the heck of it, the big plan is cash balance....

My question is this: What is the obligation of an employer to furnish information about a participant's account to a participant or an alternate payee? Specifically: Is an employer obligated to try to determine the value of a participant's account as of a specific date(s) in the past (e.g., December 31, 1991?) Or, instead, does the employer only need to furnish the participant's current account balance (included vested and non-vested amounts and loan amount.)

The DoL QDRO publication that is available on the DoL website merely states that the employer must furnish individual benefit and account statements, or a statement of the participant's benefit entitlements.

It seems to me that the closest requirement would be ERISA Sec. 209, that pertains to record retention requirements. But what records is an employer required to maintain: The participant's accrued benefit; or the contribution history?

Any thoughts would be appreciated--thank you in advance for any suggestions.