A DB plan had employee contributions which were suspended over 20 years ago. A participant over 65 is now retiring. Assuming the participant leaves the accumulated value of the employee contributions in the plan...the plan document says that the employee portion is ADDED to the accrued benefit under the plan. This is done by taking a certain percentage of the accumulated value of the employee contributions. Does the accumulated value of the ee contributions at late retirement date need to be compared to the actuarial equivalent of the accumulated value at normal retirement date? The plan document does not specifically say to treat the additional employee contribution portion like so, but the accumulated value at Late Retirement is less than the actuarially adjust value from normal retirement date.

Thanks.

Assume 401(a) plan has operational defect for a few years or maybe even only one year. Employer discovers the error and corrects it prospectively only, but not to take advantage of any of the available EPCRS alternatives. Assume timely and accurate 5500s with Schedule Ps filed every year.

I believe the IRS' position is that the plan remains subject to disqualification FOREVER. In other words, even if IRS examines the plan AFTER the SOL has closed on the last year in which the defect occurred, it can still disqualify the plan currently and assess back taxes, etc., for all open years. However, I'm not sure where this position is stated specifically (other than the inference from the EPCRS Rev. Procs.). Can anyone provide a citation?

What testing requirements does a Safe Harbor Enhanced Match subject to when they made an additional pro rata $25k contribution to the plan? Do they lose their safe harbor status?

In order to give the otherwise excludables a minimum of 3% should the plan have a separate group for otherwise excludables so as to not give them the gateway minimum (5% in this case)? Or is it okay to to just leave them as part of the NHCE group(s) they are in?

We are a 3rd party TPA firm that handles "vanilla" db and dc plans. We have been approached to do the admin for 412(i) plans and told they are very easy to do. What are the are the reporting requirements? Same as the DB except no B?

The Sales company would do the doc, compute the amount of inurance needed and we would only prepare the 5500. I am not sure if we would need to do any testing or not.

Anybody have any thoughts about this?

Do do purely admin, do you need to fully understand these 412(i)??

Any guidance would be apreciated.

The doctor has recommeded a tutor to help the child out the disorder. Would this expense be reimbursable under the medical reimbursement account? I can't seem to find information anywhere. any help would be appreciated.

A plan was amended in 1995 to say that distributions could not occur for terminated participants until NRA. Am I correct in telling the ER that the pre-95 money must always be available to a terminated participant?

I need to prepare a Wrap document for a union's health/welfare plan which includes: medical (insured); life insurance (insured) ; prescription (self-insured).

I have never done this before. Does anyone have any samples or suggestions where I can find some.

Any help would be greatly appreciated.

Thank you.

418(b)(7) states that the Unfunded Vested Benefit is the difference of the value of the vested benefit, less "the value of the assets of the plan".

I couldn't find anything else defining "value of assets". Is this actuarial value or market value?

I have a client who has a nonleveraged ESOP and they currently have individual trustees. They are changing recordkeepers and are considering acting as custodian of the stock certificates held by the ESOP themselves. I wanted to try and explain the ramifications of safeguarding the assets themselves. Does anyone know of any good articles that discuss this or can you give me a brief outline of the issues they would be running up against?

I am trying to run a couple of scenarios on a plan that has 3 HC's (two owners and the son of one of the owners) and 6 NHCE's. The two owners want to defer the max and then receive enough in the PS piece to get them to $40,000. Prior to this the plan was run as a standard 401(k) plan with a integrated profits sharing contribution amount that maxed the HC's (usually was over 17%)

They want to see two scenarios"

1. 401(k) safe Harbor plan with a 3% non-elective contribution allowing all three to get to 12,000 and then making a profit sharing contribution to get them to the max. When I try to do this and include the son for a share of the profit sharing, I start failing 410b and the Average Benefits Tests. Am I still subject to these tests?

Do I have to include the son in on the ps piece or can I just leave him with the deferral amount. (he is only 26 and makes less than $50,000)

2. The other scenario they want to see is what will happen in a cross tested plan. Can they still defer and be subject to the ADP test and then spread the profit sharig on a cross tested basis? Am I still subject to Average Benefits test and 410b?

Sorry if I am confusing everyone.

Hello,

Hoping someone might be able to provide some insight.

A plan converts from one recordkeeping vendor to another. In setting up the existing loans that are being converted, the amortization schedules do not identically match the initial schedules probably due to a minor difference in calculators in the two systems. The result is that interest credited is a small difference each period (from $.01 to $1.00). This results in an underpayment or overpayment by (for the most part) a few dollars of interest at the end of the loan.

Has anyone ever run into this?

Although I have found nothing to support it, do you think the IRS would be overly concerned in this instance of a participant paying themselves a few dollars more or less in total interest due to the system differentials in converting the loan?

Any feedback will be greatly appreciated.

Sincerely,

Andmik

How would you withhold (20% mandatory tax) for the the following scenario?

Total account balance = $38,000

After tax basis = $3,000

Loan Balance = $5,000 (to be offset at distribution).

The participant chooses to receive his after tax basis in a check payable to him, offset the loan, and rollover the remainder.

Would you send the participant a check for $2000 (basis - $1,000 tax liablity), or send him a check for the $3,000 (basis) and withhold the tax liability from the rollover portion?

What if we replace the $5,000 loan offset with a distribution of employer securities to the participant. Does that change anything?

Thanks!

How long should records be retained related to the 401(k) Plan?

I'm not asking about the reporting stuff, which I know is 6 years, but the information used to calculate contribuions:

1) Payroll records

2) Employee Election Forms

3) Quarterly valuation reports

4) You get the idea.

Thanks,

Does a Schedule C need to be filed with the 5500 in each of these cases:

1. A different Enrolled Actuary (EA) within the same firm signs the Schedule B this year vs. last year, either because prior EA is unavailable (due to vacation etc) or case loads are reshuffled within firm. Prior EA is still at firm.

2. The EA that signed Sch B last year leaves firm. The Sch B this year is being signed by another EA within the firm.

Thanks.

Regarding the limits for 2003, did :

$185 go up to $190?

$100 go up to $105?

If it is decided to correct 3 years worth of failed ADP tests through Self-Correction and it has been determined that the approach will utilize the one-to-one correction method, for the amount that is distributed to the HCEs, is the client required to pay an excise tax (via Form 5330) due to the fact that the corrective distribution took place after 03/15 of the year following the plan year in question?

Thanks.

Do we need a new profit sharing plan document for the LLC that has replaced the proprietorship? We have a new EIN, of course, but am not sure if we need to terminate the old plan and "start" a new plan? Any help would be greatly appreciated. Thanks.

In 2002, our entity changed from a proprietorship to an LLC (with different EINs).

I'm confused on how to prepare the 5500. Do I finalize the "old" number and prepare an inital 5500 for the LLC? There were no distributions and the plan's investment guy at Painewebber just changed the entity name on the statements, account number remained the same. Any other issues I need to be made aware of? Thanks for your help.

Plan runs from 9/1 - 8/31, the same as teachers contract. If school opts not to renew a teacher's contract and teacher is paid through 8/31, are they considered active or terminated as of 8/31? Distributions paid out annually at the end of the year in which they terminate. Thanks....