I think I know the answer to this one but am hoping for a different one

I have a formerly large plan that terminated and is in the process of distributing all accounts. However, they missed a small portion of 4 participant's accounts and the plan still had a balance as of the end of 2002 (of $10.78).

Do I need to file a Schedule H for this plan since there is still a remaining balance or is there any way to file a Schedule I? Also, I am assuming if a Schedule H is required, then they will need an audit attached... is this correct?

The money has since been distributed and I will be filing the final 5500 shortly. Do they need an audit for the few months in 2003 as well?

Thanks,

Rachel

This is probably a stupid question, but anywoo... When distributing a SAR for a welfare plan, is it to be distributed to all participants for the year the SAR applies to, or all current participants? (I'm thinking an employee who went on the plan last month will not care about what happened in the plan last year. But then no one cares about SARs anyway....)

Wanted to make sure this course of action was ok...

A partnership consisting of four partners has a 401(k) plan. The partnership is terminating and becoming two new, completely separate partnerships (each with two of the four previous partners).

They would like to terminate the existing plan and each new partnership wants to create a new plan, crediting prior service with the old partnership.

To add to this scenario, it is determined that the plan is top heavy for 2003. If the plan terminates mid-year is a top heavy contribution required? (This issue seems unclear in the reference material that we have.)

Would be interested in any opinions on the top heavy issue and any successor plan issues.

Thanks.

If a plan allows rollovers and an employee rolls into the plan assets formerly in a deductible IRA, this would be considered just a plain old rollover -- not a "deemed IRA" -- correct? My understanding is that owner-trustees must have a custodian to hold a "deemed IRA" but that has not been the case for rollovers. Do rollovers from IRA's need to be looked at differently than other non-related rollovers from qualified plans?

Employees who are not 5% owners may be exempted from the RMD rules under qualified plans. What if that individual rolls his deductible IRA's into the plan -- are they now also exempt from the RMD rules until the individual retires?

Any ideas?

We have a dependent student who has reached the limiting dependent age (age 25), but who is still attending school.

This plan includes the use of a PPO. Since dependent students, who live outside of the PPO service area, cannot reasonably utilize the network, there is a specific benefit that states that Dependent full-time Students who reside outside of the Network service area while attending school will receive the Network level, rather than the non-network level of benefits for their claims.

This dependent has elected COBRA and is still living outside of the PPO service area. We received claims for an injury (again, outside of the PPO service area, therefore non-network). The question is - Does this COBRA participant still receive the in-network benefit that is reserved for "dependent full-time students" or would they receive the non-network benefit level since they are technically no longer a "dependent full-time student" under the definitions of the plan?

On one hand the Regs talk about QB's having the same status as active employees (therefore not eligible for this class of benefits) , on the other hand there is language concering "similarly situated non-COBRA beneficiaries."

Any thoughts?

Can a 401k participant name a nonspouse beneficiary without the consent of spouse? Also, does this also apply to Defined Benefit Plans?

I need some additional input on how ADP failures recharacterized as catch up contributions at the end of a noncalendar plan year should be handled in calculating the 402(g) limit.

I am using the 'Catch-Up Contribution Worksheet for Noncalendar Plan Year' provided by Sal Tripodi and am running into testing results which are causing 402(g) failures that I am unable to justify.

Example:

I am working on a 3/31 plan year end and have an HCE, older than 50, who has deferred the following amounts:

1/1/2001 - 3/31/2001..... -0-

4/1/2001 - 12/31/2001..... 10,500

1/1/2002 - 3/31/2002..... 1,000

4/1/2002 - 12/31/2002..... 11,000

1/1/2003 - 3/31/2003..... 2,000

At PYE 3/31/02 the catch-up worksheets were used and no failures occured on the 402(g), plan limit or 415(limit). ADP failure did occur for 624.00. There was 1000 still available and the refund was not processed and the 624.00 was recharacterized as 'Catch-Up'. Everything is fine up to this point.

The calculation provided in the worksheet for the remaining 402(g) limit (for the calendar year in which the plan ends) advises to take the limit for calendar year less deferals made up to the PYE. Which in this case is 11,000 less 1,000 indicating that 10,000 can be made for the remainder of the calendar year. When the worksheets are completed for the next years test, this is causes a 401(g) failure of 1,000 w/ 326 in catch up still available which leaves a 402(g) refund due of the 624.00.

It seems to me that if the 624.00 was characterized as catch up contribution resulting from the prev year ADP failure that it should not be also counted as part of the elective deferrals in the calulation for determining the remaining amount of deferrals left in the calendar year.

It seems unfair that the 1000 deferred from 1/1/02 - 3/31/02 was characterized as elective deferrals, then ADP failure alloted them to be recharacterized as Catch-Up and remain in the plan, to then say that on the 402(g) testing that they are included as the elective deferrals made and excluded from the catch-up available for that year which results in a refund amount of 624.00???????

Your input please.

We have a cash balance plan that permits terminated vested participants to receive a partial lump sum. We have been advised that we are probably not required to provide a 50% QPSA on the residual annuity. We're not sure we want to follow this advice. Has anyone else looked into this?

Thanks.

When a person has been reclassified as a temporary employee, thus they are no longer eligible for company benefits which includes losing eligiblity to receive the company's payment of 401K contributions, can they withdraw from 401k plan participation and rollover their 401k funds into a roth ira? The 401k plan administrator says that the newly classified temp employee can not withdraw since they are not 59.5 years of age so any information citations or references would be greatly appreciated.

Can anyone think of a way to create a report that would show participants that are deferring vs. participants that are not deferring?

When a person has been reclassified as a temporary employee, thus they are no longer eligible for company benefits which includes not be eligible to receive the company's payment of 401K contributions, can they withdraw from 401k plan participation and rollover their 401k funds into a roth ira? The 401k plan administrator says that since the newly classified temp employee can not withdraw since they are not 59.5 years of age. If the plan administrator any information citations or references would be greatly appreciated.

Is it possible to exclude one group from the profit sharing portion of a plan who are otherwise eligible to make elective deferrals?

Specifically, I have a client with non-resident aliens working in the United States. They are here from the parent company in Japan, and stay for a period of 2 to 4 years. The plan sponsor would like to be able to allow them to make elective deferrals but not receive a profit sharing contribution because that portion of their retirement benefits are actually paid by the parent company. Is this possible?

I have a 403 (b) plan that has matching and discretionary Employer contribution features. The company has been sold and needs a final return agter assets are distributed. Is there more complicated 5500 filing on a final return?

Thanks for any help.

I found this well-written article inspiring and interesting but strangely disturbing:

"If At First You Don't Succeed" - http://www.inc.com/magazine/20030701/25659.html

Do you need to file a schedule T for a 412(i) DB Plan?

Has anyone heard anything about a new IRS address for the 5558s? One of my colleagues came up with an address telling me all 5558s had to be mailed there from now on. I can't find any confirmation on the IRS website and, of course, the instructions haven't been revised yet.

I am a broker working with a client, whose medical insurance carrier is insisting they terminate active COBRA participants at the beginning of each month until their premium is received. COBRA is administered by a TPA, and the carrier does not have the capability to "suspend" claims.

Our interpretation of the COBRA law is that COBRA members are given a grace period to make payment, and are terminated after that grace perioid if payment is not received - not before.

Other than being a logistical, administrative and service nightmare, is this legal? Is there a loophole in the COBRA law that could have any attorney willing to give their blessing to a carrier to administer this way? Any advice is helpful.

The carrier is located and services employees in the state of Connecticut, though I don't think this has any bearing considering the law is Federal. Thanks.

A plan sponsor recently sold one of its three divisions that were covered under their 401(k) plan. The plan did not terminate.

The new owners established a new 401(k) plan.

All participants who had balances in their prior plan are rolling their balances into the new plan.

Is a blackout notice required?

I can't seem to find anything in the SOX regs about spin-offs.

Do you need to fill out a schedule T for a 412(i) Plan?