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.

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