I understand that one can hold RE in their IRA. I have found a guy that will loan me money for the transaction (downpayment will come from my IRA), but the terms are harsh. The reason, he says, is that under ERISA, I cannot be qualified for the loan personally. I am having trouble finding this ruling, any help out there?

Can an employer in September of 2003 decide to make a discretionary profit sharing contribution for the plan year that ended December 31, 2002? The employer has filed for an extension for their corporate tax return.

Is their anything wrong with using an interest rate outside the 7.5% to 8.5% range used for Safe Harbor Target Benefit Plans in an Age Weighted Profit-Sharing Plan? Employer likes Age Weighting, but wants a little bigger allocation for the employees. A lower interest rate would work.

I'm curious how often 401(k) administrators are sending statements to their Plan participants these days, quarterly or annually? If it's annually, do the participants have access to their daily balance either by phone or online? We do quarterly statements and I was just wondering if, with online access and all that, the trend was going toward annual statements only...

Participant is requesting a lump sum withdrawal from a Money Purchase Pension Plan. He indicates he is not married as he cannot find his spouse. Obviously he is still married and clearly the participant's word that he cannot locate his spouse is not enough to enable the fund to distribute the lump sum to the participant.

Are there any guidelines as to what the participant is required to do in order for the Fund to safely distribute the lump sum to the participant?

Is the Fund required to take any steps to locate the "missing spouse"?

Participant is requesting a lump sum withdrawal from a Money Purchase Pension Plan. He indicates he is not married as he cannot find his spouse. Obviously he is still married and clearly the participant's word is not enough to enable the fund to distribute the lump sum to the participant.

Are there any guidelines as to what the participant is required to do in order for the Fund to safely distribute the lump sum to the participant?

Is the Fund required to take any steps to locate the "missing spouse"?

How much time, if any, must a participant or prospective alternate payee be given to appeal an adminstrator's decision regarding a QDRO?

I have not found anything in the Code, ERISA, or applicable regulations which require "appeals procedures" or "claims procedures" to be included in QDRO Procedures. However, most of the QDRO Procedures that I have reviewed contain an "apeal of decision section" which resembles benefit claims procedures.

Question 2-5 in the DOL booklet "The Division of Pensions Through QDRO" states that it is the view of the DOL that QDRO Procedures should include "[a] description of the process provided under the plan for obtaining review of the administrator's determination as to whether an order is a QDRO." However the booklet does not indicate how much time must be allowed to obtan a review of the administrators determination.

I have a Volume Submitter Plan for a cross-tested profit sharing plan document. The Plan is silent on the subject of waiving participation. An attorney involved in drafting the document has advised that I can let the client permit waivers, (2 employees have already waived as permitted by prior document) and that it is not necessary to have document language permitting waivers. Is this OK? If not, I need to amend the Plan and will take it out of Volume Submitter status... and have to submit by 9/30/2003. Thanks for your help!

Does anyone know if the new CIP rules in the anti-terrorism legislation would apply to non-erisa 403(b) plans ?

Are bonus payments considered part of compensation?

Thanks

I am trying to find out the industry standard for processing a Balance Forward 401(k) Plan using the following criteria:

1. About 1000 participants

2. Plan is self directed - 4 different funding companies - participants can

have as many different funds as they choose in any or all fund families.

3. Plan offers Life Insurance - about 200 participants use this provision

4. Plan offers Loans & permits re-financing - annually about 300 loans

to reconcile.

5. Contributions processed monthly.

6. Plan totally reconciled annually.

I am trying to determine what the industry would say the standard time is

to reconcile a plan of this size. Right now it takes about 120-160 man hours

just to do the financial reconciliation. Each asset for each participant must

be reconciled, then each fund family is reconciled, loans, insurance, money market cash flow account and finally all the components roll up to Balance Sheets and Income Statements. Just to enter the money market cash

entries and balance each month of cash flow takes about 12 hours. Currently the work is being done by very experienced recordkeeping individuals. The time consuming part is entering all the data and then of

course trying to reconcile out of balance positions.

Electronic downloads of fund activity have not yet been available from any

funding company - we think if we could get these the process could be

somewhat streamlined.

Any opinions anyone might offer will be gladly accepted.

What are the deferral limits for a person over age 50 who was in a SEP for the first 6 months of 2003 and then moved to a 401(k) plan effective July 1?

Is it the $12,000 plus $2,000 catchup for the 401(k) or must that limit be prorated along with the SEP limits?

I received a match calcuation and am questioning the method used.

Document states:

3 mo. eligibility for deferrals and a 1 YOS eligibility for match portion.

Compensation from DOP is used.

Match is calculated for plan year (not payroll basis, etc.)

Match is 10% up to 6% of deferrals

My question is , deferrals from what time period should be counted in determing the 10/01/02-12/31/02 match?

If this participant deferred $1000 from 01/01/02-12/31/02, I would typically determine their match using the full deferral amount and comp from 10/01/02-12/31/02.

The match calculation I am looking at uses comp and deferrals from 10/01/02-12/31/02. Is this correct?

I would appreciate any input. I haven't been able to find anything in Sal's book regarding this.

I have a top heavy age weighted profit sharing plan that does not have a 401(k) provision. They are not making a contribution for the year. There are forfeitures to be allocated. My question is this can the forfeiture allocation which is less than 3% for all including the HCE's be counted as the contribution or do I have to contribute in addition to this to bring it up to 3% for the NHCE's?

I was watching an old Adam West "Batman" episode and just had to pass along this delicious one that The Riddler dropped on the dynamic duo:

3 men are adrift in the middle of the ocean in a lifeboat. They have no other provisions except for the clothes on their backs, as well as 4 cigarettes between them. They have no matches, zippos, flints, or any other obvious means by which to ignite them. So, how do they all smoke?

(Wait for it.........its worth it.........)

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They throw 1 of the cigarettes overboard and make the lifeboat a cigarette lighter!!!

(other than all the actuaries out there, I wonder if anyone else knew the answer )

We are finishing up our plan restatements, and an ongoing issue for our self-directed 401(k) plans is whether or not the plan is 404© compliant.

It's not that I have any doubts that these plans are by the nature of their administration compliant with 404©, but my take is, unless the sponsor has specifically said, "We want to be a 404© plan," I don't think we should just assume that they are.

Someone else's take is that if you are not specifically selecting an option to be compliant with 404© it raises a red flag, and you are more vulnerable. We should therefore be selecting the 404© option in our documents where self-directed accounts exist.

So, what is the answer?

I am 56 years old and in September 2003 will retire from Federal Civil Service and will receive severance pay under the government's "Voluntary Separation Incentive Plan". The incentive will be paid to me in 26 biweekly installments after my retirement. The incentive is "income" and taxed as such. I have been told that it will be reported to the IRS as Wages, Tips and Other Compensation in Block 1 of my W-2. My question is, assuming I am not employed after retiring, can I continue to contribute to my Roth IRA during the period I receive the separation/incentive pay installments?

Question about 404(a)(1)(D)(ii) -

Would benefit increases due to EGTRRA amendments be considered as a plan amendment increasing benefits for HCE?

I believe that IRS has previously indicated in conferences that cost of living increases in 415 and 401(a)(17) limits are not considered amendments for this purpose, but I am not sure about the EGTRRA law changes and amendments for those changes.

In a number of professional practices that are P.A.'s (C corporations) employment contracts often provide that the individual will receive a specified percentage of any amounts that are collected for that employee's services after the employee terminates employment. Identical provisions will be in the contracts of all professionals.

Does anyone treat these provisions as ERISA severance plans?

Does anyone know what the consequences would be of an employer implementing a cafeteria plan arrangement without establishing or drafting a written cafeteria plan document? Evidently, the client has been operating a cafeteria plan arrangement for years; however, the written plan document, as required under the Code, cannot be located. Any thoughts would be greatly appreciated. Thanks.