Participant dies, designates 2 beneficiaries (70% to one and 30% to one), 30% Beneficiary is also deceased. Does it matter if the Beneficiary died prior to the participant? It seems to me that if the Bene was alive when the participant died, the funds would be paid to the Bene's estate. However, if the Bene died prior to the participant, the funds would go the participant's estate. Any thoughts or guidance would be greatly appreciated!!

We would like to set a policy where spouses who have coverage available through their own employer would not be eligible for coverage through our plan. Is this allowed? If it is, are you aware of guidelines on how to administer, i.e. what if the spouse's plan will not allow a mid-year change?

In my safe harbor 401(k), I have participants that are terminated. Now, I understand that based on the type of safe harbor I have, I must give all terminated eligible participants a 3% of comp contribution. My question is if a participant is eligible to participant on 7-1-03 and terminates 9-20-03, do I have to give them a 3% safe harbor contribution for their comp from 7-1-03 to 9-20-03 or do i only have to give a safe harbor contribution to participants who had entered the plan before the 2003 plan year?

My partner usually helps me with these things, but she will be out for awhile and the customer is antsy. Any help will be greatly appreciated.

QTIP trust is beneficiary of IRA.

The trustee wants to transfer the assets from the inherited IRA in the name of the QTIP trust to an inherited IRA for a Marital trust. Is this allowed? If not, can you please tell me why?

Somebody in the office just gave me a copy of "The 401(k) Safe Harbor Blues: A Rap Song," printed in the May-June, 1999 issue of The Pension Actuary. It put me in mind of a poem I read over 20 years ago, the title of which I have forgotten, although I have (unaccountably) remembered most of the verses.

The poem was written in response to the then-recent passage of TEFRA. The parts I remember are below, although the occasional "..." indicates passages that now elude me:

ERISA Muse, come forth anon

Ere yet it is too late.

Be quick! Or else 'tis come and gone,

Determination date.

If in a fortnight law doth hold

My benefits 'crued too many,

Forsooth! I fear it will unfold

My plan will turn top-heavy.

...to appease this TEFRA demon,

to be forced to vest and benefit

my overpaid non-key men.

O rosy 'RISA, guide me right

Tell me what to do

...that I might

top-heaviness eschew.

I don't remember the title, just that it was rather long, something to do with a sole shareholder and his defined benefit plan. Also, there is a second poem, in which the ERISA Muse replies, but I never saw it.

Is anyone familiar with this poetry, and can you direct me to the source?

Hello! Has anyone heard the outcome of the decision to reject ineligible representatives filing a Form 2848 and how the determination letter applications will be affected? Last I heard, ASPA had contacted the TE/GE dept and it it had not yet made a determination. Anyone seen more recent news?

Thanks!

The scenario that I have is as follows:

Two separate companies (A & B)- common ownership but no control group

Currently have two separate profit sharing plans

Company B will be adopting Company A's profit sharing plan as a multi-employer situation

Can Company B's plan merge into Company A's plan and have all assets transferred into Company A's plan or would Company B's plan have to terminate?

Thank you.

Hi,

Does a former employer have to be related to the current employer in order to credit service with the former employer (for eligibility purposes) under the new employer's plan? I understand that the crediting of past service must not discriminate, but that a 5-year safe harbor rule applies. So, can the owner of a company be granted one year of prior service with his former employer but make all the employees wait 1-year to enter. The answer would seem to be no, but can't find it anywhere.

If anyone can help, that would be great.

Thanks

Lori

If a company begins operation on 6/1/03 then they have a short plan year and are required to pro-rate the 40k limit, correct?

If I am correct, is there any way around this?

The FASB has posted the revised Statement 132 on its website:

http://www.fasb.org/

Note there is also a Q&A listed after the Statement itself.

(This is the first time that a release has been posted on the website...it is primarily due to the short time period to its implementation: actually retroactive by now.)

We have a participant that moved from the state of Washington (no state income taxes) to Oregon (has state income taxes). He is now taking distributions from a retirement plan he had in Washington. Is there a mandatory withholding amount for states such as Oregon, in addition to or in lieu of the Federal withholding?

In the context of deferred compensation & a non-publicly traded employer I'm looking for exemptions under the California blue sky laws to allow certain execs to acquire employer stock with deferred compensation. Can't find any exemptions that are specific to corporate officers and the like - and I'm missing something?

If a participant is taking a distribution under 72(t) to avoid the 10% early withdrawal penalty, is the participant forced to withdrawal some/all of his basis in the plan prior to pre-tax deferrals?

Example:

Acct Balance = $100,000

After Tax Contributions = $20,000

Deferrals = $70,000

Match = $10,000

In taking a monthly payment (as part of the substantially equal periodic payment), must the $20,000 be used first in distributing the account?

Can someone point me to where I can locate the pre-EGTRRA unrounded limits for 2003? I specifically want to view the 401(a)(17) and DB 415 amounts.

Is the "recalculation of life expectency" election still applicable with the new 401(a)(9) regs?

Situation: Controlled group with one entity having a standardized plan that did not cover other entities in the controlled group (many years at issue) - but those other entities had their own nonstandardized plans (all 401(k)s) covering their employees.

I know we have to go through EPCRS, but . . .

Question: Has anyone had any luck arguing that this is not a failure to cover eligible employees (directly covered by EPCRS), but rather a retroactive plan document amendment is appropriate because employees that were not covered by the standardized plan (but should have been) were covered by their own nonstandardized plan?

Does a health & welfare plan contract with the vendor(i.e. medical, dental, vision, etc...) substitute fro a plan document? We wil be distributing ERISA required SPD's.

What are the advantages/disadvantages of a wrap document? If doing a wrap doc , is a wrap SPD required?

I have a 3-person client who is providing a nonsafe harbor DB benefit equal to the 415 limit for the owner, and 2% of pay accrual for the rank and file. The DB benefit is offset by 10% of pay contributions provided in the DC plan. The 2 non-owner employees are in their 30's so the DB benefit is completely offset by the DC contributions/balances. The owner is in his early 70's, and gets about a $250,000 annual contribution in the DB plan, and has nothing in the DC plan.

Since my 2 non-owner employees accrue nothing in the DB plan, and are not even considered in the participant count (at least for PBGC purposes), am I still subject to the overall 404(a)(7) limit of the greater of 25% of payroll or the DB min.?

Or can I reason that I do not have any of the same participants in both plans (since my non-HCE's have no benefit and are projected to have none), and that the deduction limits apply to the plans separately?

Everything appears to test out OK when cross testing the PS contributions.

I am working on a DB/DC-cross tested floor offset plan. 1.401(a)(4)-9(B)(2)(v)(D) states that each NHCE in the DB/DC plan must satisfy the minimum aggregate allocation gateway. I have to include about 40 people in the DB plan (to pass 401a26), but only about 25 in the DC plan to pass 401(a)(4) on a combined basis. So, 15 or so participants will get a 0.5% of earnings annual benefit accrual in the DB plan and nothing else - so I presume...

But do I have to give the 7.5% to these 15 or so in the DC plan since they are NHCE's who receive a benefit in the combined DB/DC plan?

I anticipate making 300,000 of schedule C income in 2004. However, much of this money will probably be made towards the end of the year. I would like to fully fund my SEP with $40,000 the first week of January 2004. Can I do this even though I haven't yet earned the income?