I know the 401(k) elective deferrals & matching contributions cannot be used as an offset for a "safe harbor" Floor Offset DBP.

Can the 3% contributed to make the 401(k) safe harbor be used for offset?

Client dies at age 69, having taken no distributions from her IRA. Three adult children inherit IRA, all of which are less than 59 1/2. Are they required to take a RMD based on their life expectancies? If so, do they have option to select settlement option, such as life only or 10 yrs certain, etc.? Additionally, is there a site that will provide approx. calculation of the amount they'll have to take each year? (None want to take any distribution so I want it to be for the least possible). Thank youl.

Has anyone see this? Comments?

National Employee Savings & Trust Equity Guarantee Act of 2003.

This is the Senate Finance Comittee Chairman's Modification as published by the JCT

<a href='http://www.house.gov/jct/x-78-03.pdf'>http://www.house.gov/jct/x-78-03.pdf</a>

I know its only proposed but it is interesting. Bringing back some changes to 5500 reporting dropped from EGTRRA and some IRA changes as well.

I realize this question has been addressed before but I have a client who applied for a personal loan for a vehicle and the loan officer claims that his loan from his retirement plan is showing up. First of all, I don't know how this would show up on a credit report, second the liability for the loan is to the participant himself so how would this affect his credit rating or ability to qualify for a loan. Does anybody have anything in print form I can give to the participant discussing this?

Can anyone provide a list of carriers who offer erisa fidelity bonds for nonqualifying assets. This plan will have close to 1 million in nonqualifying assets.

If a retirement plan's trustees have changed, do we have to amend the plan document, or would a resolution suffice?

Who signs it? The old trustees and the new ones, or just the new trustees?

Does anyone have sample language?

I have a participant who recently died. Mother is the beneficiary and the participant had a large outstanding loan balance. The mother will receive the 1099 R for the death benefit portion. Who receives the 1099 R for the outstanding loan balance and what code should be used?

I just read Corbel's September 18, 2003 Technical Update on the Final Catch-Up Regulations. See http://www.corbel.com/news/technicalupdate....asp?ID=223&T=P. It states that all participants must have the same effective opportunity to make catch-up contributions. However, "A plan fails to provide this effective opportunity if there is any applicable limit, such as an employer-provided limit, which a catch-up eligible participant is not able to exceed (e.g., 60% deferral limit which applies to total elective deferrals). . . . It states that the final regulations provide four options, one of them being that "the plan can impose a payroll deferral limit (normal and catch-up) of not less than 75%". This seems to be an incorrect reading of the Final regulations. I interpret the 75% rule to apply to the cash available for deferral and not the actual deferral % limit. That is, a 401(k) plan can state that an employee may elect to defer between 1 and 50% of their "compensation"; provided that their "compensation" is limited to 75% of their compensation (after withholdings).

If Corbel is correct, I have a number of plans to amend by year end.

Any thoughts?

I would like to know if a publicly traded corporation that, sponsors a qualified profit sharing plan with a 401(k) feature with participant-direction investments, adds its own common stock as an investment option for all contribution sources in the plan (ee salary reduction, match and discetionary profit sharing), does the corporation need to re-register with the SEC?

Thanks.

Even with the combination of the IBM court decision (which is being appealed) and the House bill to prevent Treasury dept. from issuing any proposed regs blessing cash-balance plans/conversions, is there really any reason to hold back on implementing a new cash-balance plan that meet existing regs?

Practically speaking, are people still getting IRS determination letters on new plans ?

I'm curious what people are telling new clients interested in starting up one of these plans in 2003 and would appreciate any comments.

Client filed both of their qualified retirement plans (one DB and one DC) with the IRS under the GUST program in proposed form but failed to adopt finalized versions within 91 days of the determination letter. In addition, the client failed to adopt EGTRRA amendments by the end of the GUST remedial amendment period. Are we stuck with a VCR submission under EPCRS?

Does anyone know anything about new state regulations that go into effect Jan 1, 2004 which say that financial institutions (maybe not exclusively, but inclusively) cannot mail anything out with ssn's on them? I need to find out which states adopted this but i dont know where to start looking.

thanks Lisa

...Is National Talk Like a Pirate Day.

www.talklikeapirate.com

Arrrrr.

I know you can’t designate your will as your beneficiary. But what if you designate the trustee of your will… is that the same as designating your will as your beneficiary?

Also, given that you can’t designate your will, doe sit mean that is you did put your will on the document, you really do not have a beneficiary designation and the IRA agreement provisions must apply?

Thanks in advance.

This is not something we generally deal with, due to handling only small plans. However, we recently encountered the following:

Corporation A maintains a profit sharing plan. Corporation A has all of its assets (not stock) purchased by corporation B. The terms of the deal are such that all of the employees of corporation A, except for 2, will be employed by corporation B. They intend to do a "partial merger" of the plans - corporation B's PS plan will accept the transfer of all assets and liabilities of the corporation A plan, with respect to those employees of corporation A who will now be employees of corporation B. After this "partial merger" corporation A will terminate the corporation A plan.

First, it appears that a 5310-A is not required in this situation, where 100% of the account balances in a DC plan for the affected employees are transferred. Agree/disagree?

Second, are there any tips on specific issues to watch/avoid? This "partial merger" appears to me to actually be a "spin-off." Is the process really as simple as doing a valuation of the account balances, and transferring those balances directly to corporation B's plan, then processing a normal termination of A's plan? Other thoughts? Appreciate any input.

I am conducting an audit of a 401k plan and during the course of the audit discovered that the Plan sponser has failed to transmit contributions timely.

This problem was unique to the beginning of the year. The plan Sponsor changed TPAs in effective March 1st.

When the sponsor went to remit its contirbutions in March for February, the new TPA refused to take the contributions until they were transmitted in the format that the TPA is a customed to.

The client uses ADP spent 2 months trying to get the necessary reports and encrypted files the TPA required.

My position that these are late transmittals and need a schedule G and 5330 filed for excise tax and make up of lost earnigs for the 2 months.

Is there any way to get the exise tax waived? This was due to the transation of TPAs and not the sponsor.

Thanks

I am a CPA who recently has come across in the course of performing different audits missed salary deferrals on Manual Checks, Special Payolls, Commission Checks, etc.

Who is liable for the missed deferrals? Does it fall back to the plan sponsor as a prohibited transaction? Does the plan sponsor have to recalculate the payroll taxes and social secruity for that period missing the salary deferral? These are all 2002 transactions all the necessary fillings should have been done by the EE and ER. I am want to make sure the W-2s, 941s etc don't need to be amended.

Would I now need a Sch G and 5330 for excise tax?

Thank you in advance,

Need a gut check. Anything wrong with this?

CY plan year, val date at BOY. Aggregate funding method. Sponsor gasps when told of the 2003 minimum funindg requirement and asks to freeze the plan, as of the end of current year. As of 10/1, we amend the plan as of 12/31 and re-do the valuation results, using only one year of future service. (Assume the 204(h) notice is adequately distributed.)

The IRS has stated (see Gray Book 99-6) that the method must be changed from aggregate to an individual method if the plan is frozen. However, that statement clearly is focusing on the year(s) after the freeze is effective, not the previous year. Any problem with using the Aggregate method for the 2003 year? Does Rev. Ruling 77-2 inhibit my process?

We have a retiree health plan that covers employees with 15 years or more of service for life. Periods of unpaid leave are excluded from credited service. We want to make sure that we don't inadvertantly cause any problems with the ADA, FMLA, etc. I haven't been able to find much guidance since vesting in retiree health isn't required the same way as with retirement plans.

A group member becomes disabled. The employer assures the employee that all group health and life benefits will continue thoughout long term disablility.

The employee and employer continue to make premium payments to the carrier and all written communications with the "ee" indicates coverage is in place.

Mean while, after a year, the group life carrier is changed to a new carrier. "Living" benefits are eventually claimed from the new carrier. The claim is denied citing a provision in the company SPD that the employee must be working 30 hours or more per week. The work requirment is satisfied with the old carrier, not the new one.

Employer made a mistake in not informing the new carrier that several disabled employees were on the old plan and had been promissed continous coverage.

Meanwhile the "er" files for chapter 11 and the assests are sold to a competitor.

Who is responsible to pay this claim. 1. New carrier that is receiving premiums 2. Old carrier if the back premiums are paid 3. Agents errors and ommisions policy for not notifing the new carrier of the disabled employees 4. The "er" who is now bankrupt???