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

How does a non-participant go about researching the details of a specific 401(k) Plan?

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

A participant retires from a DB plan with a 50% QJSA. He then runs off with his ex-secretary and divorces his wife. Absent a QDRO, does the divorce cancel any benefit the ex-wife would have been entitled to?

Our TPA firm has advised that their initial calculations reveal we will fail adp and acp tests this year. Rather than giving a qnec or forfeitures after the end of year, they suggested we have the hce's scale back contributions to X% (based on their calculations) for the remainder of the year, at which point, they project we'd pass.

However, among HCE's, most of the very highest paid maxed out their contributions early in the year. Therefore, the HCE's that would be scaling back their deferrals would be the bottom tier of HCE's.

The net result of this strategy might get us to passing, but, there seems to be a level of unfairness in forcing middle management to suffer while upper mgmt takes full advantage of the benefits available.

Having said that, I can't find any reason why this would NOT be a permissible way to correct (or rather avoid having to correct after year end). They might not be the highest paid, but it looks like where the code is concerned, an HCE is an HCE.

Here's the question in a nutshell, "Can a company force HCE's in middle mgt to limit contributions, to ensure the company passes testing, while allowing upper mgmt to take full advantage of contribution limits by virtue of the fact that they are paid enough to max out early in the year? Or would such a reduction have to be voluntary on the part of those mid mgmt HCE's?"

My company will be emerging from bankruptcy soon and they are starting a profit sharing plan. The new plan will have each employee vested 20% each year for five years. This seems perfectly fine if you were a new employee but what if you have been with the company for 10 years? Should an old employee get vesting of 100% immediately if he has 5 or more years already?

This is a salary group and not covered by a collective bargaining agreement. Another thing to consider, there will be new owners.

Maybe I should just be thankful I'm still employed.

A client with a 401(k) plan has discovered various issues. The first set had to do with non-filing of Forms 5500 since plan inception in 2001. An easy fix under DFVC. However, now the client has discovered something else, and I'm wondering if there are any thoughts.

There is currently and historically has only been 1 participant. It turns out this participant was not really eligible, as he did not turn 21 until just recently. So, the only asset the plan has ever had has been pre-tax deferrals from this incorrectly included participant (there is no employer contribution under this plan). First, under voluntary compliance, does anyone know if disgorging the contributions is the correct answer? And if so, would it be 2003 taxable income, or would you have to go back and restate income for 2001 and 2002 (and is it a 1099-R from the plan or a W-2 from the employer issue). Finally, if you disgorge, the client would like to say the plan never existed, i.e. there was never really a trust corpus. I cannot see how that final answer would work, as the plan had eligible participants who were deemed to benefit, although none elected to do so, and there was an actual asset in the trust, even though it would (under what we now know) show up as a payable back to the participant.

Any thoughts would be appreciated.

Participant receives hardship and deferrals are suspended for 12 months. The participant, however, starts deferrals only after 4 months into the suspension. What to do?

We are planning to implement domestic partner coverage effective 1/1/04. Currently, our premium structure is just 2 tier--single and family.

If an employee who already has elected family coverage for covered dependent children elects to add his/her DP, can we tax the entire portion of premium attributable to family coverage?

Or, must we tax some determined amount of the family portion that may be attributable to the DP portion of coverage? Again--we only have 2 tiers. How would we determine what the portion of premium is attributable to the DP and which portion is attributable to the dependent children?