Is there an integrated allocation where the compensation used is in excess of the $200,000 limit?

After looking at several allocations I've become confused. Some formulas indicate a percentage of

comp as a base contribution plus 5.7% of comp in excess of the TWB. While another formula indicates

a formula of allocating 5.7% of the sum of each participant's comp plus excess comp. However, if this

allocation causes someone to exceed the Cumulative Permitted Disparity Limit the allocation shall be based on the participant's comp rather than comp plus excess comp. If someone could clarify what is

comp, excess comp and total comp it would be appreciated.

A new client literally just walked in the door who hasn't filed his 5500EZs for 2000 and 2001 (the actuary went MIA). I assume he will still have to file with the EBSA, but the DFVC is not available to an EZ filer. What will happen when he files the back forms? Back in the days pre-EFAST the IRS was always very lenient in these cases. What about the DOL?

I have self-employed income and employ my 15 year old daughter to help with some of the work. I pay her over $3,000 per year which I deduct from my income tax. I want to contribute $3,000 to a Roth ira for her. Do I need to issue her a W-2 in order to do this and if so, how do I go about that (paperwork, etc). Do I need to file an income tax return for her? Thanks for any input on this.

Jay Glass

FMLA-We are a national organization, headquartered in NYC, An employee, work location DC, home address, VA, is currently on FMLA, maternity disability. She will be taking the full 12 weeks. Return date from FLMA is 10/6/03. The field office manager called; she would like to take an additional unpaid leave from 10/6/03 to 12/31/03. The field office has let me know that they would hold the position open for her. My question, would it be considered discriminatory (unless we let everyone do it) that we let an employee have an unpaid leave after her FMLA ends, knowing that the position would be kept open. Would a precedent be sent whereby we would have to keep all positions open past the FMLA return date if we granted this employees request (with the approval of the field office). Thanks

Employer has self-funded health insurance, premiums are paid by employer and employees (17%). Employer pays its share for each month on the 1st day of that month. Employee pays her share on 1st and 15th (deducted from paycheck). Employee terminated on the 10th, having already "paid for" 1st - 15th insurance for that month. Employer deducted insurance for 15th - 30th from her last paycheck so that employee had "paid for" the full month (her 17% at least). Employer terminates plan coverage as of date of termination so that employee has paid for something she will not receive (coverage from 10th to 30th). DOL has called and I am looking for any sort of legislative or administrative authority allowing the termination of coverage as of date of termination, even though employee ends up paying for more days in that month. Any direction would be much appreciated.

I have a client who maintains a profit sharing plan that he has not funded in 2003. Also, no forfeitures will be allocated. If he terminates his Profit Sharing Plan now, can he adopt a SIMPLE plan by October 1, 2003 or must he wait until January 1, 2004? Thank you.

I am a married graduate student. Using Taxcut software,

I determined the maximum tax benefit for the tax credit

available to offest my taxes. The software actaully calculated

a refund for 2002. I have two questions:

If the tax credit is "nonrefundable", why did the software

show that I would get a refund?

AND more importantly, since almost half my initial contribution

was offset by the tax credit (I put in $1000, but saved $500

in taxes), can I just take the money out of the Roth IRA

without penalty, as is the standard case for initial contributions.

This would seem a bit absurd, since I could keep putting

money in a Roth for a year, then take it out and redeposit it

later for a 50% tax credit. If the law would not allow me to take a

credit if I withdraw the same year (say, by calculating the

"net" increase in the Roth for the credit), then can't I still withdraw

all my contrib.s after 2006, when the credit ends (I'll

probably still be in grad. school), thereby "earning"

roughly 50% on my contrib.s due to tax credit, while

facing no penalties for withdrawal?

I have been lucky and earned nearly 400% on my Roth in

one year, so the idea of taking some out early is a bit tempting.

Had this sent to me by email:

"After every flight, pilots complete a gripe sheet which conveys to the mechanics problems encountered with the aircraft during the flight that need repair or correction. The form is a piece of paper that the pilot completes, and then the mechanics read and correct the problem. They then respond by writing on the lower half of the form what remedial action was taken and the pilot reviews the gripe sheets before the next flight. Here are some actual logged maintenance complaints and problems, as submitted by Qantas Pilots, and the solution recorded by maintenance engineers. By the way, Qantas is the only major airline that has never had an accident.

P = The problem logged by the pilot

S = The solution and action taken by the engineers

----------

P: Left inside main tire almost needs replacement.

S: Almost replaced left inside main tire.

P: Test flight OK, except autoland very rough.

S: Autoland not installed on this aircraft.

P: Something loose in cockpit.

S: Something tightened in cockpit.

P: Dead bugs on windshield.

S: Live bugs on backorder.

P: Autopilot in altitude-hold mode produces a 200 FPM descent.

S: Cannot reproduce problem on ground.

P: Evidence of leak on right main landing gear.

S: Evidence removed.

P: DME volume unbelievably loud.

S: DME volume set to more believable level.

P: Friction locks cause throttle levers to stick.

S: That's what they're there for.

P: IFF inoperative.

S: IFF always inoperative in OFF mode.

P: Suspected crack in windshield.

S: Suspect you're right.

P: Number 3 engine missing.

S: Engine found on right wing after brief search.

P: Aircraft handles funny.

S: Aircraft warned to straighten up, fly right, and be serious.

P: Target radar hums.

S: Reprogrammed target radar with words.

P: Mouse in cockpit.

S: Cat installed."

I am a self-employed individual (with no other employees). My company is organized as a sub-chapter S corporation. I have established an SEP-IRA on my behalf into which my company places contributions.

If I were to become an employee of another company (of which I am not an owner) with a 401k plan (in which I would be an active participant immediately) during the middle of my fiscal (calendar) year, can my sub-S company still contribute to my SEP-IRA up to the maximum of 25% of my W-2 income (from my sub-S corporation)/$40,000?

If so, do the contributions have to be made prior to my new employment or do I have until my sub-S taxes are filed for 2003?

For example, if I were to have $100,000 of W-2 income from my sub-S corporation in 2003, could I contribute $25,000 to my SEP-IRA in 2003 even though I also had $20,000 of W-2 (2003) income from my new employer (that had a 401k plan)?

Thanks.

With all of the recent (and pending) increases on contribution limits, I'm looking for information on how much people actually contribute to 401(k) and 403(b) plans. Does anyone know of reliable sources for this data?

Thanks,

Rob Ring (I posted this message at the 401(k) board also)

With all of the recent (and pending) increases on contribution limits, I'm looking for information on how much people actually contribute to 401(k) and 403(b) plans. Does anyone know of reliable sources for this data?

Thanks,

Rob Ring

What is the maximum salary deferral limit to a 401(k) plan?

I am being told that if a plan allows for after-tax contributions, the salary deferral amount can be more than $12,000. I though that the deferral was capped at $12,000 ( for age under 50), regardless of whether the amount is pre-tax or post-tax.

Thanks in advance for your help.

Jane

If an individual completes a rollover of employer stocks from one qualified plan to another qualified plan of a different employer, how does that affect the NUA? I read somewhere that this can be done for plans belonging to the same employer and the NUA is not lost then. But I cannot find anything about rolling the assets between different employer’s plans.

Thanks in advance

Is anyone aware of a cite in the regs that deals with in-service distributions from a DB or money purchase pension plan. 1.401-1(b) is all I've been able to find so far. Most people I've spoken to say no in-service withdrawals are permitted and others say participants may be permitted to withdraw after-tax contributions. Thanks in advance.

The much anticipated final regs. are out, with a 09.17.03 effective date and maintaining the 12.31.03 sunset transition date.

Quoting the release: "The regulations provide tax rules that reflect the underlying economics of split-dollar life insurance arrangements,” stated Treasury Assistant Secretary for Tax Pam Olson. “Under these rules, companies cannot use split-dollar life insurance arrangements to provide tax-free compensation to their executives. By insuring that split-dollar arrangements are appropriately taxed, the regulations curb a backdoor form of executive compensation and promote greater transparency.”

Link:

http://www.ustreas.gov/press/releases/js726.htm

Hi,

I have read the threads regarding the reporting of the cash surrender value of life insurance contracts on the Form 5500. We generally report them especially if it is a takeover situation in which they have been reported in the past.

Question. A participant took a loan out against the policy, presumably to pay the large $20k a year premium required on the policy. The cash surrender value went down considerably, I presume because of this loan.

Would it be appropriate to include the loan form the policy as a plan asset as well?

If anyone has any thoughts, please let me know.

Thanks!!

An annual small plan filer delayed getting data necessary to file and administer their 12/31/2002 plan year until one week prior to september 15 filing deadine (corp. ext.)

The admin, testing and 5500 were still prepared to be filed on time, HOWEVER, the plan year data showed beginning plan year participants at 149 as opposed to 80-90 in all prior years, THUS now requiring large plan filing status.

PROBLEM: no time now for audit to be completed by Monday 9/15.

Any suggestions as to how plan sponsor might want to handle this?

This has probably been covered before but I couldn't find it.

Our benefit plan has a 30 day notification requirement for status changes.

Our plan operates on a calendar year basis.

Our employee has a support agreement (Dated 1/03) requiring her ex-spouse to cover their child and states that father must provide proof of this coverage, but he has not done so until now. She claims to have attempted to get proof for 9 months by email, letters, and even involved her attorney. She now has a copy of the insurance card that states the child was enrolled 1/15/03 under the father's plan.

Now she wants to drop coverage for her son retroactive to January (and get a refund of premiums paid). I can't find any discussion of time limits in the regs, probably since this is an optional provision left up to the plan administrator. Is it permissible to 1.) allow a retroactive change in these circumstances since she just received proof of this coverage after months of trying; OR 2.) allow a prospective change from the date she received proof of coverage; OR 3.) She's stuck until 2004?

Any opinions or citations appreciated!

I just learned that one of our plans with a plan year end of 3/31 was changed in 2002 to a plan year end of 12/31.

necessitating a short plan year 5500 filing.

Can someone tell me what the guidelines are for the filing deadline for the short plan year.

We are a self-funded ERISA plan. We are contemplating a change to our enrollment and eligibility rules that would require a spouse who has health coverage available through an employer to take coverage with his/her employer as a condition of enrolling in our plan. We would not place any restrictions on children, only a spouse with an employer sponsored health plan.

Has anyone had experience with this approach? Are there any legal problems with it that are not obvious?