A company has a 401(k) profit sharing plan and elects the 3% non-elective safe harbor contribution. The plan allows for after tax contributions. Now, the HCEs can contribute up to 4% for after tax contribution and still maintain a free pass on the ACP test correct?

The maximum deduction of the unfunded current liability is now generally available to all plans (with the additional stipulation that benefit amendments during the last 2 years may not be recognized).

The general definition of the unfunded current liability is the current liability minus assets as defined under 412©(2).

Assuming that I am using an asset smoothing method which produces an asset value less than the market value of assets but still within the corridor of 80% - can I get my client a deduction using the lower asset number. It would appear that I can but it just seems too good!

Any comments are greatly appreciated as usual!!

Here's a "letter to the editor" received by BenefitsLink:

---------------

July 15, 2003

Dear Editor:

Hate to be picky, but the [July 14, 2003 BenefitsLink welfare plans] newsletter description of the 5th Cir. opinion in the Schlumberger case is very misleading.

Far from adopting the "serious consideration" test, the court rejected that test as a bright-line test for determining whether the employer had breached its fiduciary duties. Instead, the court adopted a fact-specific analysis of whether the information, or lack of it, was material to the employee's decision.

In addition, the court held that employer's do not have a fiduciary duty to affirmatively disclose that they are considering a plan amendment.

Hope you find this useful. Overall, your newsletters are a great source of info on a wide variety of topics. I find them very useful!

Bill Brown

wbrown6@wi.rr.com

http://www.techrepublic.com/download_item....m&fromtm=e103-1

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http://www.opinionjournal.com/extra/?id=110003758

A company restated a qualified plan by adopting a non-standardized prototype 401(k) plan in 2002. In 2003, before applying for a determination letter with Form 5307, the company adopted an amendment that takes the plan out of prototype status and makes it an individually-designed plan. Is the plan now a non-amender that must go under EPCRS, or can it still take advantage of the September 30, 2003 deadline for filing for a determination letter?

A company restated a qualified plan by adopting a non-standardized prototype 401(k) plan in 2002. In 2003, before applying for a determination letter with Form 5307, the company adopted an amendment that takes the plan out of prototype status and makes it an individually-designed plan. Is the plan now a non-amender that must go under EPCRS, or can it still take advantage of the September 30, 2003 deadline for filing for a determination letter?

We represent a nonprofit that has operated a 403(b) plan since 1987. A major brokerage house is custodian and offers mutual fund investment options. The nonprofit makes employer contributions and the plan is an ERISA plan. The nonprofit has never been able to obtain plan level information from the custodian, such as number of participants remaining in the plan, etc. The custodian indicates records are not kept on a plan level basis and they are not able to determine how many of the individual participant accounts are part of the nonprofit's 403(b) plan. Is this normal? The nonprofit would like to switch to a new custodian. How can this be accomplished when the custodian does not keep records on a plan level basis? The nonprofit can account for the current employees that it knows are participating, but it does not know what happened to the accounts of numerous employees who have terminated employment since 1987. Are those former employees left behind with the old custodian? Help!

While reviewing the instructions closely for line 4j of Schedule H, I noticed the following statement: "If the Schedule H is attached to a Form 5500 filed for a plan with all plan funds held in a master trust, check "No" on line 4j." I would love not to have to compile this info but am not sure if "master trust" applies to this plan.

What exactly is a Master Trust?

This particular plan has all assets with Wells Fargo, who directs what amounts are invested where (without any input from the employer). They also sign the Schedule P.

Thanks,

Rachel

Does anyone have any recent data on the size of the 457 market and key competitor market share?

Has anyone analyzed IR-2003-89, posted to the IRS web site on July 14, 2003? (Retirement Plans Need Not File Fringe Benefit Information)

Leon T. Konecny, Jr. CPA

Would someone please help me with the following:

If a participant takes a loan from a DC plan, which is not a money purchase plan and where the normal form of distribution is a lump sum and whereby the plan allows for in-service withdrawal distributions prior to age 59-1/2, and this participant a short time later stops making payments (for simplicity purposes, the payments stop in April 2002) and the partiicpant remains actively employed through 12/31/02 (calendar year plan year). Since the loan meets the conditions of a deemed distribution, what other reason would preclude a recordkeeper from treating this as a deemed distribution subject to 1099-R reporting? I am being told that due to a new "IRS Ruling" that this defaulted amount will continue to be treated as a loan balance until the participant leaves the plan or repays the loan.

I would appreciate either a quick explanation or cite to something that I can review. I have read the temp regs under 1.72(p) and come to the conclusion that this particular circumstance is a reportable event.

Thanks.

I have a Money Purchase plan that used forfeitures to reduce their employer contribution. How do I complete lines 6a-6c on the Schedule R?

6a Minimum Required Contribution?

6b Amount Contributed by the Employer?

6c Difference between Amounts

In this case, the Min Required Contribution is $357,580 but actual contribution was only $349,515 after taking forfeitures into consideration.

I am thinking that I am wrong in entering the Min Req'd Contribution as $357,580 and that it in fact should be the $349,515. Is this correct?

Thanks,

Rachel

Is anyone aware of a prototype document that can handle specific union employees as the only eligible group of employees and have a service formula for contributions?

I am in the process of updating for GUST and EGTRRA an old Principal Group prototype and have come to the conclusion that I will have to go off a prototype (Corbel's cannot handle) and use modified language in Corbel's volume submitter, along with application for IRS determination.

Any help would be appreciated. Client is a small paving contractor and not looking for anything fancy by any means.

Thanks.

When should the Business Associate Agreement be signed with a new insurnace vendor for a plan beginning 1/1/04? Does it need to be signed prior to 1/1/04, as PHI may be shared during open enrollment?

Before the final regs were issued, many people believed that you could create two categories--regular contributions and catch-up contributions--for participant contributions to plans that match on a pay period basis to avoid matching catch-up contributions. If at the end of the year a participant was not eligible to make catch-up contributions, the amounts called catch-up contributions would be recharacterized as regular contributions and participants would be made whole for any missed matching contributions with a true up.

The final regs state that the solution to the pay period matching problem is describing what can be matched rather than what cannot be matched. The example in the preamble describes using a percentage of elective deferrals to segregate what is and is not matched and makes no mention of separate categories. Can you still use the separate boxes, or has the IRS killed that method?

In a daily plan, are quarterly statements required and do they have to be provided by paper whether quarterly or annually? Also, do we have to provide fund performance on a quarterly basis?

I can't remember what the rules are behind the whole Gateway rules. Like when do you have to contribute the 1/3 of the HCE's, etc. I can't get it straight in my head. I'm working on a cross-tested plan, and the HCE is getting 12.5% of the P/S contribution, therefore I have to give the NHCEs 1/3 of that (4.17%). Why? I can't remember!!! Why can't I just give the 3% top heavy?

Help!!! Thanks.

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"In the experiments, a captive female crow, confronted with a task that required a curved tool (retrieving a food-containing bucket from a vertical pipe), spontaneously bent a piece of straight wire into a hooked shape -- and then repeated the behavior in nine out of ten subsequent trials."

Target page includes link to downloadable video clip. Amazin'.

I injured my leg in an accident at work and an ambulance was called to the job site. This happened on May 7th. I went to work that next day. My leg has not been much of a problem. However, within a couple of days, I started experiencing numbness an weakness in my left pinky and ring finger.

I reported this to Human Resources. I was terminated on June 2nd, due to an absence. Prior to my termination, I had been talking to the company's WC Insurance company. I pleaded for them to let me see a doctor. They have to this day, not done so.

I took it upon myself to see a doctor, while still employeed. The doctor said I needed to have EMG/NCV studies done A.S.A.P. She also wote me out a light duty note that was ignored by HR and my supervisor. I put myself on light duty the best I could till I was let go.

I have 3 doctors who say I was hurt on the job and that I am unable to work. Yet, to this day the insurance company has neither approved or denied my claim.

I did have the studies done and the result was UND.

The labor board has told me that until the insurance company makes a decision, I will have to keep on waiting.

Is there anyone out there who knows what I can do?