Plan year is calendar year. Haven't seen the document but even assuming there is no last day/1,000 hour requirement on the match couldn't the employer execute a consent to terminate the plan effective 10/01/03 thereby cutting off e/ee deferrals for October as well as any match? E/er is selling all assets in a transaction effective 11/01/03 and wants to shut down the 401(k) as soon as possible....

I would swear that in the last two or three weeks I saw something on these message boards (although not necessarily on the SEP section) about how one "terminates" a 5305 SEP. (But I suppose it might have been how to terminate a SIMPLE) I'm darned if I can find it again, and if I printed it, I lost it. Grrr! Does anyone recall this? I seem to remember someone quoting a statement by IRS personnel as to how to do it. Thanks!

We are a Section 125 administrator. Our 125 administration software provider does not currently have a Section 132 (transportation benefits) plan administration or document software. Does anyone have any recommendations on a company that offers this kind of product?

I understand the Medicare Secondary Payer Act prohibition against an employer offering financial and other incentives to Medicare eligible employees to opt out of the employer's group health plan ("GHP"). Obviously, the employer cannot offer a cash incentive and the employer cannot provide the employee secondary coverage of Medicare-covered items if the employee volutarily drops the GHP. What can reasonably be done to help employees who opt out of the GHP without violating this provision?

Could a collective trust fund of a bank hold individual group annuity contracts for seperate employer groups? Essentially pooling several group annuity contracts under one collective trust fund. thanks

Can an employer select to only offer salaried employees a Section 125 account and not the hourly employees? Thanks.

A client has a 403(b) plan governed by ERISA because there are both Employer and Employee contributions going into the plan. I seem to recall that 403(b) plans do not have to be updated during a remedial amendment period like DB or DC plans. Also, I believe that there are no prototype documents available for them, only individually designed documents. Can someone confirm that these are true statements -- or correct me if I am wrong? If I'm right, is it because 403(b)s really aren't qualified plans?

Plan has already been amended for GUST and has received a determination letter. The Plan needs to change the ADP/ACP testing for 2002 (from prior to current).

If the plan had not already been amended, the GUST RAP would have extended through 9/30/03.

Issue: If the amendment is done today, is the amendment timely? i.e., does the GUST RAP end on 9/30/03 even though the plan has already been amended for GUST and a determination on the GUST-amended plan has already been issued? Or does amending the plan for GUST and/or submitting or receiving a determination letter end the GUST RAP as of such date?

Any guidance (and cites to IRS rules) is greatly appreciated.

Does anyone see any problem with an employer who wants to start up 2 separate 401(k) plans where one would be safe-harbor and one would be subject to ADP testing. They have 4 HCEs and would basically be splitting them up (2 and 2) in each plan to pass 401(b). Is there anything in the safe-harbor regs that would require ALL employees under both plans to get safe-harbor match/contributions, or can we just provide safe-harbor benefits to those NHCEs under safe-harbor plan only ? Thanks in advance.

A frog goes into a bank and approaches the teller. He can see from her nameplate that her name is Patricia Whack. "Miss Whack, I'd like to get a $30,000 loan to take a holiday."

Patty looks at the frog in disbelief and asks his name. The frog says his name is Kermit Jagger, his dad is Mick Jagger, and that it's okay, he knows the bank manager.

Patty explains that he will need to secure the loan with some

collateral.

The frog says, "Sure. I have this," and produces a tiny porcelain

elephant, about half an inch tall - bright pink and perfectly formed.

Very confused, Patty explains that she'll have to consult with the

bank manager and disappears into a back office.

She finds the manager and says, "There's a frog called Kermit Jagger out there who claims to know you and wants to borrow $30,000. And he wants to use this as collateral!" She holds up the tiny pink elephant. "I mean, what in the world is this?"

(you're gonna love this)

The bank manager looks back at her and says... "It's a knick knack, Patty Whack. Give the frog a loan. His old man's a Rolling Stone." (You're singing it, aren't you?!! - I knew you would be.)

What are the financial ramifications when an extension is not filed for a calendar plan year?

Plan is currently a traditional 401(k) plan that matches 100% up to first 4% deferred. Participants are immediately vested.

I want to convert the plan to a safe harbor since the current match would satisfy the safe harbor provisions.

This would be considered an enhanced matching formula, correct?

I have a client with an outstanding participant loan taken out before the effective date of TEFRA in 1982. The loan is secured by a mortgage on residential real property. Such loan would be deemed distributed as of the date the loan is renegotiated, renewed, extended or revised. The participant wishes to replace the security with a mortgage on other residential real property. In all other respects, the loan would remain unchanged.

I can find no guidance considering whether substitution of collateral constitutes the renegotiation, renewal, extension or revision of the loan.

Any opinions, comments or experiences would be greatly appreciated.

Does anyone know if the proposed regs on deemed IRAs issued 5/20/2003 are the latest guidance we have?

Have these regs since been finalized or is it too soon for final regs?

I do see Rev. Proc. 2003-13 that provides a sample plan amendment, but I mostly wanted to check if the proposed regs have been finalized.

The profit sharing plan in question is written in that forfeitures gerated during the plan year shall be reallocated at the end of the plan year based on the compensation of the eligible employees. I need to account for the reallocation separatly on the system from the profit sharing allocation.

The problem is, all eligible employees can share but the amount of the forfeitures is so low lately that some participants actually will receive only a couple of cents. This plays havoc with purchasing shares because sometimes the share price on the investment is so high that I can't purchase any shares-- but that is besides the point.

Is there any way or has anyone ever heard of a de minimis amount of forfeitures available that do not have to be reallocated?

I know this has been beaten to death, but I have someone here who insists that loans are taxed twice (I know they're not).

Can anyone give me a link to a thread with good examples that they are not. For some reason my salient points are not getting through to this person.

Much obliged...

I have the following controlled group situation:

Husband owns 100% of Company A and 50% of Company B. Wife owns 0% of Company A and the other 50% of Company B.

Wife has W-2 comp through Company A and self-employed income through Company B.

For purposes of the deduction, what percentage of the deduction does she get? How do I calculate this figure for her two sets of comp?

As I recall, the terms of an ESOP loan are held to a general standard of reasonableness. Assuming all of the other components of the loan are reasonable, is an ESOP loan with a term of 30, 60, 90 years reasonable? Is there a general consensus as to when the repayment term of a loan becomes unreasonable?

Thank you very much for your assistance.

For purposes of testing whether a self-insured medical plan is discriminatory, Section 105(h)(5) of the Code provides that the term "highly compensated individual" includes an individual who is "among the highest paid 25 percent of all employees." We are trying to structure a plan which requires employee contributions based on the employee's pay; the higher the pay, the larger the contribution. Some of the participants, however, receive a small amount of W-2 pay and substantial 1099 pay. In identifying the "highest paid" employees, can we take into account both W-2 and 1099 pay? If only W-2 pay is considered, then the individuals in question will not be among the "highest paid."

Testing coverage for 12/31/2002 plan year. There was a partial plan termination in the 2002 year. All locations were sold off and only 2 ee's remain. The companies that bought out each location have agreed to pay the remaining profit sharing contribution owed to the employees as part of the buyout. They were given 4 to 5 years to make this contribution. Since these contributions will be paid so far in the future - how will that effect the 12/31/02 coverage testing? Thanks for your help.