I have a question as concerns the issue cited in Rev. Rul. 2003-85 and that which would apply to an overfunded defined benefit plan making a transfer of its excess assets to a qualified replacement defined contribution plan. Excess assets are $250,000, maximum deductible contribution to the profit sharing plan would be limited to 25% of participating compensation for plan year ending in 2003 (i.e. $37,744). There were two participants in the terminated defined benefit plan and the same two individuals are participants in the replacement plan. There is no amendment adopted 60 days prior to the plan termination termination date.

How is the issue cited in Rev. Rul. 2003-85 able to transfer more than 25% of the excess assets to the replacement plan? The issue states that Plan B (the replacement plan) provides for the receipt and immediate allocation of excess assets in the form of a direct transfer from the terminating Plan A. Does this mean that it is allowable for the transfer to exceed 25% of surplus assets if no part of the transfer is forced to be held in suspense in order to comply with Sec. 401(a)(4) and 415? Or does it mean that at least 25% of excess assets must be transferred to the replacement plan?

In other words, is it possible that the terminated Plan is allowed to transfer the entire surplus assets to the replacement plan, therein holding what is necessary and required in suspense for up to 7 years until said amount can be allocated under Sec. 401(a)(4) and 415?

Here is my situation.

I have a Roth IRA account that was opened 4 years ago. I am buying my first house and want to use all of my Roth IRA money for part of a downpayment. I have not made any contributions to the account over the past 3 years, and do not plan to in the future. Therefore, if I take the money out of the Roth, can I subsequently close the account and not pay the money back? Is it treated like a loan in that regard or can I just keep the money and not worry about paying it back?

Thanks for the help!!

Has anyone heard of a limitation on deferrals where once a participant hit the annual compensation limit and they wanted to contribute the maximum deferral amount for that year - the deferrals would have to be contributed by the time the person hit their maximum compensation figure?

Example:

12/31/02 plan year end

Participant's compensation in June was at $200,000.00

Defers $1,000 per month - in June total deferrals were $6,000.00

Is this participant limited to a total of $6,000.00 because they hit the annual comp. limit in June?

Thanks for any input.

is it permissable to allocate PS contribution to HCE's during the PY and NHCE's at the end of the PY? Among other things, it seems discriminatory to me.

Does anybody know or can recommend a plan administration software tool that one can use to track the work load of the pension administrators?

Say Example a pension administrator has 50 plans assigned to him. Is there any software out there that can help with pulling out information such as:

Q1) How many 5500 are due based on plan year end?

Q2) Which plans are top-heavy etc.?

This software would be a good tool for the administrator to see where he is on his workload as well as help the manager keep track of the cases.

Thanks.

Plan sponsor of 403(b) plan is discontinuing and starting a 401(k).

Investment provider is hitting the sponsor with a participant fee. Is there a way to "cash-out" terminated participants with under $5,000 to end this charge?

Could Plan sponsor unilaterally transfer the participant accounts to a new provider? I think they can only control new money, but am not at all versed in 403(b)s.

Thanks for anyone taking the time to respond.

MP Plan was amended to 0% and merged w/401(k) Plan effective 10/15/2002. 204(h) Notice was given timely. Question: If there was 1000 hours and last day requirement to receive MP contribution, does the employer still have to fund the MP under the old formula? Or is the contribution not required because of the last day requirement?

Thank you

Code Section 419(f) requires IRA contributions to be deposited no later than the tax filing date (without extension) for the taxable year. Does anyone know if this has been extended to the tax filing date, as it may be extended?

Does a legal separation qualify as a domestic relations order?

This is probably a routine occurrence for some of you, but new to me. A 401k participant died w/ his designated beneficiary being a sister living in and a citizen of Vietnam. I’m looking for a step-by-step for any special income tax filing/withholding/treatment required for the plan distribution to a Vietnam citizen. Any leads greatly appreciated. THANKS

A Georgia employee began employment as a bus driver September 3, 1991. When work began, she started with a step pay grade assuming she had no prior work experience with a County School District. In fact, she had two prior years service with the County (1979-1980, 1980-1981). The prior work experience was not noted on her job application thus not credited to her when her initial step pay grade was assigned in 1991. Therefore, she has been paid at an incorrect step pay for 11 years based on her actual years worked for the County.

We requested the remedy of applying the appropriate step pay grade to calculate the amount of underpayment due her from 1991 as well as adjustments to any applicable service based benefit credits (e.g. retirement, paid time off, vacation). The County replied that since it was the job applicant's responsibility to state prior experience that they will only provide remedy for the past four years which is up to the statue of limitations.

Can someone give guidance regarding an applicable statue of limitations or general thoughts about how to pursue past credit. Thanks.

Is anyone successfully implementing a standardized master trust product that combines employers with less than 50 participants? The theory is to save costs by combining small plans into one account on our recordkeeping system and our trust system.

From a processing standpoint, this seems like it would be very confusing and time consuming regarding allocation reports, posting transactions, year end testing, etc.

I would appreciate any input, pro or con.

Thanks!

Anyone know where he went?

If a leased individual meets all the requirements under 414(n) to be considered a "leased employee" for eligibility and testing purposes but is terminated after completing 1500 hours during an 11 month period and then is rehired a month later.... I assume the individual is not a "leased employee".

Example: Hired as a leased individual January 1, 2002, completes 1500+ hours, is terminated November 30, 2002. Rehired as a leased individual December 15, 2002. The individual's consecutive 12-month period begins on December 15, 2002.

The only reference I can find on this issue is Notice 84-11.

This appears to be a sneaky way to get around the eligibility and coverage rules. Does anyone know of any other clarification?

Company X was a 501©(3) that sponsored an ERISA 403(b) plan with a group annuity contract. In year 4, Company Y, a for-profit entity, acquired Company X and the 403(b) was frozen. Since the freeze took place prior to the effective date of 403(b)(11), can the 403(b) be terminated so Company Y no longer needs to file Forms 5500?

I would like to believe the following is true. I find this powerful and inspiring, even if it only turns out to be a story.

..........................

In Phoenix, Arizona, a 26-year-old mother stared

down at her 6 year old son, who was dying of terminal leukemia. Although her heart

was filled with sadness, she also had a strong feeling of determination.

Like any parent, she wanted her son to grow up and fulfill all his dreams.

Now that was no longer possible. The leukemia would see to that.

But she still wanted her son's dreams to come true. She took her

son's hand and asked, "Billy, did you ever think about what you

wanted to be once you grew up?

Did you ever dream and wish what you would do with your life?"

Mommy, I always wanted to be a fireman when I grew up." Mom smiled

back and said, "Let's see if we can make your wish come true."

Later that day she went to her local fire department in Phoenix,

Arizona, where she met Fireman Bob, who had a heart as big as Phoenix.

She explained her son's final wish and asked if it might be possible

to give her six-year-old son a ride around the block on a fire engine.

Fireman Bob said, "Look, we can do better than that. If you'll have your

son ready at seven o'clock Wednesday morning, we'll make him an honorary

fireman for the whole day.

He can come down to the fire station, eat with us, go out on all

the fire calls, the whole nine yards! And if you'll give us his sizes,

we'll get a real fire uniform for him, with a real fire hat-not a

toy one-with the emblem of the Phoenix Fire Department on it, a

yellow slicker like we wear and rubber boots. They're all manufactured

right here in Phoenix, so we can get them fast."

Three days later Fireman Bob picked up Billy, dressed him in his

fire uniform and escorted him from his hospital bed to the waiting

hook and ladder truck. Billy got to sit on the back of the truck and

help steer it back to the fire station. He was in heaven. There were

three fire calls in Phoenix that day and Billy got to go out on

all three calls. He rode in the different fire engines, the paramedic's van,

and even the fire chief's car. He was also videotaped for the local news

program.

Having his dream come true, with all the love and attention that

was lavished upon him, so deeply touched Billy that he lived three

months longer than any doctor thought possible. One night all of

his vital signs began to drop dramatically and the head nurse, who believed

in the hospice concept that no one should die alone, began to call the

family members to the hospital. Then she remembered the day Billy

had spent as a fireman, so she called the Fire Chief and asked if it

would be possible to send a fireman in uniform to the hospital to be with

Billy as he made his transition.

The chief replied, "We can do better than that. We'll be there in

five minutes. Will you please do me a favor? When you hear the

sirens screaming and see the lights flashing, will you announce

over the PA system that there is not a fire? It's just the fire

department coming to see one of its finest members one more time. And will

you open the window to his room?"

About five minutes later a hook and ladder truck arrived at the

hospital and extended its ladder up to Billy's third floor open

window. 16 firefighters climbed up the ladder into Billy's room.

With his mother's permission, they hugged him and held him and

told him how much they loved him. With his dying breath, Billy

looked up at the fire chief and said, "Chief, am I really a

fireman now?"

Billy, you are, and the Head Chief, Jesus, is holding your hand,"

the chief said.

With those words, Billy smiled and said, "I know, He's been

holding

my hand all day, and the angels have been singing."

He closed his eyes one last time.

My instructions were to send this to at least four people that I

wanted God to bless and I picked you. Please pass this to at least

four people you want to be blessed. This story is powerful and

there is nothing attached, please do not break this pattern; uplifting

stories are one of the best gifts we receive. There is no cost but a lot of

rewards, let's continue to uplift one another.

Stop telling God how big your storm is.

Instead tell your storm how

big your GOD is.

Can an employee who returns from military service make up his or her pre-tax contributions by personal check rather than by payroll deduction? By requiring make-up contributions, does USERRA override the general rules governing pre-tax contributions?

a not for profit currently has a 403b plan not subject to title I of ERISA (no er $ paid to plan). They are considering amending their current er sponsored defined contribution plan to allow for cross testing/rate groups. If everything works out we expect to get the hce to $40,000 in this plan.

Am I correct that these plans do not need to be aggregated for 415 because there are no er $'s being paid to the 403b plan? that the hce can actually get $52,000 put away between both plans in 2003 (and another $2000 catch up?... and they could actually put in a 457 plan so he could defer another $12k right, bringing his amounts to $64k? Sounds like it works but it smells a little.

Several years ago, I set up a "fully loaded" Roth IRA with Putnam not fully aware of the no load options available. It hasn't done very well in the recent market then to tack on all the fees. As long as your contributions are less than the limit of $3,000 per year, can I set up another "Roth" account with another custodian or do I have to "roll' the one I have now with Putnam and consider penalties and/or devaluation?

This concerns a terminated DB plan that received some demutualization proceeds years after the termination.

The plan terminated in the late 90's after the employer made a deposit to fully fund the plan. Participants were paid out. The plan filed a final 5500 showing zero assets and also received a determination letter regarding the termination. Then this year, we find out the plan received deumutualization proceeds. The proceeds exceeded the funding deposit made prior to termination. Can we say that the deposit to fully fund the plan was a mistake since the employer incorrectly ignored the demutualization proceeds (using hindsight, of course). Therefore the plan is(was) overfunded and the employer should get back some money? Is there a way to get this money without being a reversion with heavy taxes?

A DOL opinion letter 2003-05A with similar circumstances says demutualization proceeds are not plan assets. However an IRS PLR (which one?) with similar circumstances said proceeds would be treated as plan assets, however this plan WANTED to give the money to participants. We want the money to go back to the employer but don't want to be taxed on a reversion. The DOL and IRS seem to be on different pages. How can the employer get the money and comply with both agencies?