Question- The plan document is a Profit Sharing Standardized Adoption Agreement. The client would like to change to a Non-Standardized Adoption Agreement where participants would have to be employed on the last day of the plan year and work 1000 hours to receive an employer contribution. Can this be done?

Thanks for any input.

I am told that if an Insurance Company recieved compensation from the Plan >$5000 they need to be reported here. What code should be reported for them, it is an Insurance Company like Manulife.....Any help on this schedule would be appreciated b/c this is the first on I have done..

Thanks,

Carson

A question so dumb, nobody's asked it it seems!

Do non-participating participants get a copy of the SPD, or is the requirement confined only to those who are actively participating, or those who are beneficiaries?

Please help me understand the implications of including employees employed in a foreign country in a domestic qualified plan.

May employees of a foreign subsidiary of a domestic plan sponsor participate in the domestic sponsor's qualified plan?

If so, this arrangement would seem to make sense in the case of employer contributions. It does not, however, seem to make sense in the case of 401(k) plans, as the employees of the foreign subsidiary realize no tax benefit by contibuting to a 401(k) plan; presumably, they would be taxed by the foreign country prior to contributing, then taxed by the US when they take a distribution. Please comment.

Finally, IRC § 406(a) and Treas Reg § 1.406-1(b)(1)(i)

discuss a domestic employer entering into an agreement with the IRS to permit the employer's foreign employees to participate in the employer's domestic plan. Is there any guidance on how to enter into such an agreement?

Any tax-related issues with participant naming an adult as custodian for minor child under Uniform Transfers to Minors Act as the contingent beneficiary behind the spouse in a PSP? Thanks.

We have a client who has a calendar year SH PS 401k plan. About a year ago, the client transferred in surplus pension assets from a terminated DB plan. We have slowly been using the surplus towards the SH match.

Now, due to the economy, the client is wanting to terminate the PS plan and distribute the remaining $28,000 in surplus assets to the participants. Is there any particular method in distributing this money? I wasn't sure if it could be used an an Employer Non-Discretionary Contribution, or as an additional Employer Match.

The terminated DB plan recently came up for a random audit by the PBGC. Should we wait until the PBGC closes the audit before adopting a resolution to terminate the PS plan?

Can a SH PS plan be terminated mid year? We were hoping to get all the assets paid out before 12/31/03 to avoid going into another accounting year.

Also the client may want to reestablish the SH PS 401k plan in a year or two if his business picks up. Would this cause a problem?

Thanks for any help.

I have a client who has an overfunded DB plan. Client is 73 years old. Benefit is limited by 3 year average compensation limit so benefit can not increase. There is about half a million excess assets in plan. How can we get rid of excess to lessen posssible excise tax?

Facts:

Plan Participant dies.

Spouse if the designated beneficiary on most recent D.Beneficiary form.

Spouse is deceased.

Daughter is beneficiary of spouse.

Daughter completed a distribution form requesting a lumb sum payment from plan of participant vested benefit less outstanding loan balance.

My questions are:

Is the beneficiary the estate of the deceased spouse or the daughter?

If the estate, who makes the distribution election?

Who gets 1099ed for the outstanding loan that is "defaulted"

Thanks in advance for any help

An individual IRA owner received a divorce decree from the court. It did not address the IRA assets.

Some years later ( maybe 3) the IRA owner and his wife signed an agreement to split the IRA assets. They both signed the agreement. But it was not approved by the court/judge. Is this a proper divorce decree under 408(d)(6)?

Thanks in advance

Is it possible to do a QTFB program in-house? Here's the problem, we're a small company and want to institute a QTFB program, problem is, our payroll administrator wants to charge us an arm and a leg to just set up the plan - let alone administer it.

Is it common to do this in-house? And if so, how would you technically go about doing it if you have a payroll administrator (without incurring the charges from them for administering it). We know about the written instrument requirement and the limits, etc. Any help would be greatly appreciated

Must an employer who maintains a 403(b) plan that consists exclusively of salary deferrals allow collectively-bargained employees to participate. My understanding was that unlike qualified plans, they could not be excluded from participation. However, section 4.72.13.6.1 of the Section 403(b) audit guidelines says that they can be excluded. When did the rules change (or was it always that way??)

In a DB plan, if the death benefit is defined as the pvab must you pay at 417(e) rates or can you define the pvab for death benefit purposes as the actuarial equivalence?

Plan year end is other than 12/31, but begins in 2002. Are two EGTRRA amendments required? One for 12/31/02 and the other for the regular plan year?

Linda Michals

New 401a profit sharing plan, first year filing.

Are they covered under the 410(b)(6)© acquisition or disposition rule?

Has anyone tried to eliminate an IRS 5500 late filing fee by filing under DFVC post receipt of an iRS penalty notice. I was informed by a DOL official that such a gambit would be reviewed by the IRS on a facts and circumstances basis. Any input would be appreciated.

I am having a problem researching my current situation. (Background) I worked for a company that has a retirement plan and is based on number of years worked and the retirement payout is based on a formula that uses your last 12 months of compensation. I also had available to me a SERP plan, which is a non-qualified plan. During my last 3 years of employment I contributed to the SERP on a monthly basis and also deposited bonus awards that I received for departmental performance.

My situation is as follows: In 1999 I was diagnosed with Multiple Sclerosis and shortly there after had to go on permanent disability. A couple months later I was forced to take distribution of my SERP savings, which were taxed as ordinary income. I am now getting ready to turn 65 and have recently inquired about my retirement benefits. All the compensation numbers that the company had supplied me with in the past included my regular salary and bonuses when calculating the last 12 months of companion for retirement purposes. Now all of a sudden the company says - that they have made a mistake and by ERISA ruling they cannot included my bonuses as compensation because I deposited them in my SERP which is a non-qualified plan, and the fact that I had to take mandatory distribution because of my Multiple Sclerosis did not matter.

My question is - The VP of the HR department referred me to the following IRS definition of "compensation"

which he is using to disqualify my bonuses as compensation in my retirement benefit calculation, they are "Code Sections 414 and 415. I have looked for several days and have had absolutely no success in finding these sections, has anyone out there had a similar experience or is familiar with these two sections?

Any help or a point in the right direction would be appreciated.

Thanks in advance,

I am getting ready to restate a client's PS 401k calendar year plan for GUST effective 1/1/03.

Early in 2003 one of the participants (aged 59 1/2) called the plan broker and asked for an in-service distribution. Without checking the broker mailed the participant a check without a Trustee authorization or without withholding taxes. The plan does not allow for in-service distributions so after many heated discussions, the broker agreed to put the money back in the participant's account, and the brokerage company would take the loss.

Now the client has decided to add In-Service distributions at the age of 59 1/2 for all accounts. I was adding this provision to the plan along with the Gust restatement effective 1/1/03. Since the In-Service distribution provisions will now be available, how does this affect the erroneous distribution made to the participant earlier in the year? Since the GUST restatement has not been signed, will the In-Service distributions not be available to participants until the date the restatement is signed?

Thanks for any advice.

Teacher union proposes severance pay based on salary and years of service. Severance pay contributed to 403b established by teacher. Any discrimination issues?

Union also proposes offering retiring teachers choice between annual fixed sum payment to 403b or health insurance benefits until eligible for social security benefits. Any problem with offering them such a choice?

My question is: for purposes of ADP testing, are HCE's considered eligible for deferrals for the 401k portion of a plan, when realistically they cannot defer because they receive the maximum company contribution to the profit sharing portion of the plan.

I am researching the prevalence and historical/current usefulness of offering benefits through a cafeteria or full-flex arrangement. The only source of good data I've found thus far is the SHRM benefits survey (last year's and this year's). But I would like more. Can anyone direct me to a good source of information? Or, if your organization has experience with these programs, can you tell me: Have they achieved their objectives (and what were those objectives)? Thank you in advance.