Calendar year DB plan terminated as of 12/31/02. Plan had a funding deficiency for 2002, and sponsor is paying excise tax. Plan is terminating in a standard termination thanks to substantial owner waiving benefits.

If the funding deficiency is never corrected, are there potential additional penalties even though there is no longer a funding standard account maintained after the termination?

Is it permissible to shift a percent or two from the ACP test to help pass the ADP test? ADP test is as follows: HCE 5.96%; NHCE 3.01%

ACP test is: HCE 1.28%; NHCE 1.03%. Plan uses current year testing method. Document provides for distribution to HCE, QNEC and QMAC, but also discusses multiple use test, which is no longer applicable.

I have a client with a plan that has been carrying a balance for a deceased participant for some 15 years. The beneficiary form has been lost or destroyed, and the SSN is not valid on the deceased individual. Good faith efforts have been made to find the beneficiary. Client wants to forfeit the money to remaining participants.

What would you all do?

For the Assets Held attachment- how do we determine the cost of assets if it's with a mutual fund company such as MFS? (They do not list "cost". We have contributions made for that plan year but nothing that would be cost overall.)

This is the first year the company has needed an audit- the plan has been in existance since 1996 and we have no idea where to start figuring what the actual cost of the assets would have been.

Any ideas?

Thanks in advance for your help,

Rachel

Is it legal for employees to enroll in a group health plan completely through a company's intranet system? What if the company doesn't have the technology for an electronic signature (employees do have passwords though)?

I'm confused b/c I've seen quite a fee online enrollment service providers but I thought the DOL rules re: electronic disclosure cover only certain forms and disclosure obligations and did not expressly cover enrollment procedures where employee consent is required for payroll deductions?

Are CA wage lawas that require a written authorization preempted by ERISA?

HELP!!!

I have searched the boards on this subject, but I haven't found an answer to my client's dilemma. If it has been addressed. I probably did not ask the right question in my search.

Plan has about $1,660,000 in non-qualifying assets. Total plan assets are $2,723,000. Therefore, non-qualifying assets are greater than 50% of total plan assets.

This seems to be the problem for obtaining a bond on the non-qualifying assets. If the non-qualifying assets totaled less than 50% of the total assets, then client could get a bond on the $1,660,000.

Are others finding this to be the standard? Or, are there those of you, out there, who are aware of companies that would issue a bond to a client in this situation.

Thanks.

I was just retained to review a DB plan that has an unusual benefit accrual. The normal retirement benefit equals service times $xx/month (currently $25). However, if a participant retires on/after NRD, the NRB is the accrued benefit plus $5.60/month multiplied by years of service before 1980. A particpant retiring in 2003 with 8 years of pre-80 service accrues a benefit of $25 plus 8*5.60=69.80, well above the 411(b) limits.

Plan has had this provision for at least two decades, and has several determination letters. New actuary for plan agrees it violates 411(b).

Any good fix ideas?

The company that I work for is in chapter 11 and the new owners want the ESOP plan terminated. The present value of the stock is $0. The stock is not publicly traded. There is some cash left in the cash accounts associated with each participants ESOP account. The trustee is using the cash for the ESOP termination costs. Is this legal or should the company be picking up the costs?

For an employer that failed to recognize it was part of an affiliated service group (ASG) and thus failed to include eligible employees and/or failed discrimination testing on an ASG basis, is EPCRS available under Rev. Proc. 2003-44?

I am not aware of any express correction methods for ASGs or controlled groups, but wouldn't the consequences of an unrecognized ASG or controlled group, as mentioned above, would seem to fall squarely within the Rev. Proc. and be susceptible to self correction?

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

We are the recordkeepers/administrators for a profit sharing plan with a calendar plan year. The valuations are done quarterly and the last one was done 9/30/02. I have been after the client since January 2003 to get the profit sharing contribution amount so that we may process the 12/31/02 contribution and valuation. To date 9/29/03 I still have not received the data from them. They keep saying they are working on it and they are aware of the deadlines we are facing.

My problem is that the 5500 is due 10/15/03. The final valuation is not complete, the audit is not complete and the valuation is not complete.

Are there any further extensions we can get? We have asked repeatedly till we are blue in the face for the data from the client. I wish I could fire the client, but it is not possible. I just dont see how we can get everything done in time.

Any suggestions? thanks

Can someone explain to me the difference between a Multiemployer plan and a Multiple employer plan.

I believe that the Multiemployer plan in normally used in collective bargaining situations to cover employees at various employers.

Is a multiple employer plan one in which many employers maybe covered under one plan and trust but are not related in anyway. Can this be done? What are the testing and reporting ramifications?

Can a 125 plan allow for reimbursement of insurance premiums for an individual who does not choose to participate in his employer's health plan? Instead he or she chooses to get their own policy.

Secondly, assume the individual does use the employer's health plan for himself or herself but gets an individual policy for his or her spouse and children. Can a 125 plan allow for reimbursement of those premiums?

Plan document says "puchase primary residence" for Hardship distribution, participant wants to buy the land first with this money. Plan is audited each year, so I'm inclined to deny it. Anyone have experience either way?

The plan that I am working on is a one person plan. It terminated and all assets were distributed out of the plan into an IRA in 2003. The one participant is over age 70 1/2 and is required to take a minimum distribution for 2002 from the plan. The participant had thought that the rollover of his entire account had happened prior to the end of 2002 and did not take the required minimum distribution from the plan.

1. How does he correct this now? Can he take it from the IRA?

2. The 50% excise tax - What form is this tax submitted on?

Any suggestions on how to correct would be appreciated.

Thank you.

My question is whether anyone isaware of anything that indicates definitively one way or another whether a fee taken during the processing of that lump sum can be included as part of the taxable amount of the distribution, or whether it must be thought of as having occurred prior to the distribution and thus not be included in the taxable amount?

The following are examples of the options we are exploring:

Gross Funds Liquidated 2500.00

Taxable Amount 2,500.00

Non-Taxable Amount 0.00

Gross Cash Distribution Amount 2,500.00

Federal Taxes Withheld 500.00

State Taxes Withheld 0.00

Participant Paid Distribution Fee 75.00

Net Cash Distribution Amount 1,925.00

Proponents that the fee should not be considered taxable would say it should be handled as below:

Gross Funds Liquidated 2500.00

Participant Paid Distribution Fee 75.00

Taxable Amount 2,425.00

Non-Taxable Amount 0.00

Gross Cash Distribution Amount 2,425.00

Federal Taxes Withheld 485.00

State Taxes Withheld 0.00

Net Cash Distribution Amount 1,940.00

Does anyone know which way is correct?

I have a takeover Profit Sharing Plan (cross tested) with a 5% Match. There are three doctors who max out their contributions every year. I noticed that the past several years, the plan failed the ADP test, and it's running very close this year.

I want to restate their plan to a Safe Harbor 401k for 2004. The majority of the Safe Harbor plans we set up use the 3% non-elective contribution. However, this client likes the 5% match. I need suggestions on how to set up the match(es).

If I set up a Safe Harbor match plus an additional discretionary match, how will this affect the gateway for the cross testing or for top heavy contributions?

Would the client be better off with a 3% non-elective Safe Harbor and then an additional 2% SH Match?

Thanks for any ideas.

Is a one person (self-employed) defined benefit plan subject to required quarterly contributions?

Does anyone have a survey that they use to try to determine how much participation there would be for a proposed 401k/PS plan? For example, would you participate if there is a match/if there is not a match/what percentage/etc?

Would very much appreciate seeing anything that anyone has put together for this. Thanks!

A plan includes both pre-tax and after-tax assets. The participant receives a partial distribution from the plan. How is the distribution taxed? Must the distribution amount be determined on a pro-rata basis, similar to IRAs?

Thanks in advance

Jane