Is there anything that would prohibit a 401(k) plan from offering former participants,with vested deferred accounts, the opportunity to roll other accounts into the plan such as IRAs?

I realize an employer may not want to deal with former participants, but is there anything that would prohibit rollovers. I know you could have a loan policy that allows former participants to continue or start a loan.

My client has a 401(k) plan with a discretionary match. The match is limited to deferrals up to 4% of compensation (i.e., the cap is 4%).

It was recently discovered that, in 2001, the match allocation was not properly limited to the 4% cap. Rather, no limit was made. ALL deferrals were matched.

Furthermore, the client contributes a flat dollar amount (say, $50,000) which is then allocated to those who contributed 401(k) deferrals, but only up to 4% of comp. So, any correction to 2001 will result in MORE allocation to some participants and LESS allocation to others.

I am trying to determine if a reasonable correction method would include "taking away" the match from some, while increasing the match for others...or if this "taking away" is not considered permissible, even though it is in connection with correcting a plan to comply with it's terms.

Has anyone dealt with this before? Is self-correction even available? Virtually all plan participants are affected one way or another. I assume that we'd have to also correct for gains/losses from time of original deposit to date of correction?

I'm hoping someone has some practical experience to share...

We have a Money Purchase Plan which was terminated and merged into the company's 401(k) Profit Sharing Plan. The Money Purchase Plan had approx. 4500.00 in forfeitures remaining at the time of the merger. The plan document states that forfeitures are to be used to reduce future contributions. Since there will be no future Money Purchase Contributions, what can be done with this money?

Two organizations are in the same controlled group of companies. One company (A) will cease doing business. The other company (B) will continue operating.

Pursuant to regulation and case law, COBRA continuation coverage will be available to the terminated employees of B through A. Problem exists because employees of B are union employees but employees of A are not unionized.

How is this generally handled?

I think this may have been covered fairly recently, but has anyone had any experience as to the IRS' response if a document is submitted without all of the prior documents?

We have a terminating K plan that was established in 1990. The plan has always used prototype documents. It has never sought an individual determination letter. We want to submit it upon its termination for a letter, but cannot find the document in effect originally. We have all documents used since 1992, but not the document in place at the outset. Any experience as to what the IRS will do if we submit without the original document? Will the submission be rejected? Are there potential adverse consequences of submitting, i.e., would the IRS refer the plan for audit?

Does an employer with more than 100 employees that offers a fully insured medical and dental insurance plan have to file a 5500??

Does a company that offers a fully insured health insurance plan (HMO/PPO) and has over 100 participants need to file a 5500 form??

We have an associate who is requesting FMLA time off to care for her 35 year old daughter who is hospitalized. The daughter is not married and has no one else to care for her. The associate indicates that her daughter's doctor will allow the daugher to be released as long as someone is there to care for her. We've reviewed the FMLA child definitions and we are not sure if the 'mentally or physically disabled' statement applies to temporary health conditions. Are we correct in assuming that the dependent adult child must be mentally or physically disabled prior to the onset of illness?

We currently offer vacation accrual rates based on length of service with some exceptions for corp title and/or position. What are the guidelines we should follow when offering a higher accrual rate based on position? Should the exception criteria be formally outlined and published to associates or can we just maintain as an internal HR process. Most surveys only list accrual ranges by service and omit position criteria but I know that many employers adjust accruals for certain levels or grades. Any resources that can be provided would be most appreciated.

Our company currently offers benefits to part-time associates working at least 30 hours per week. We do not charge associates a higher contribution for the healthcare plans but we do have lower accrual rates for time off benefits. We are considering reducing the minimum hours requirement to 20 per week which will require that we change our cafeteria 125 (pop only) healthcare document. Are we required to file this new document with any governmental agency and must we redistribute to all associates? Also, does anyone have a suggestion as to the best place to find national employer survey data on part-time benefits?

I am preparing a 5500 for 2002 year on a small ps plan. I have two defaulted loans (on two active HC participants). The accounts are all participant directed. I am reporting on line 2g of the Schedule I.

It is my understanding I still need to carry the loan until the loans are paid off or the participants quit.

If I deduct them on 2g, how do I keep the value in the plan? Do I show the defaulted loans plus interest as a receivable? I know there must be some easy trick to this.

The valuation report is an issue too. I can distribute the loans within their accounts; but then what-- do I add it back in some way? I realize when I do the final final 1099R I adjust the basis but until then I'm confused has to how to account for it. This is an annual val.

The total amount of the 2 loans is $75,000 so it will stand out with total assets of $325,000.

If anyone has any ideas on how to account for this transaction, please advise.

Thanks!

Is there any guidance out there regarding a plan's ability to increase the plan's compensation limit to the new limit of $200,000 after the EGTRRA compensation limit could have become effective with respect to the plan, particularly whether this causes a 401(a)(4) problem? I seem to recall seeing something saying that changing a plan's comp limit to the EGTRRA limit after the first plan year in which it could have been changed to the EGTRRA limit will be subject to 401(a)(4).

Help.

Separate (both subchapter S Corp.s) companies are 100% owned by only two non-spouse individuals. Information provided to me is that together these two individuals own 100% of both companies.

Question: Because these are S Corp.s is it even possible that the two companies are of the same Controlled Group of Companies?

My confusion is that because of the nature of S Corps. Mr. A and Ms. B each own some percentage of each company (and are bro-sis co.s), but unless A and B form a holding co. they do not each/together own 100% of the corp.s as set forth in IRC Section 1563.

The individuals (A and B) insist that together they own 100% and, therefore, the companies are within the same controlled group of companies.

Any guidance would be appreciated.

Help.

Separate (both subchapter S Corp.s) companies are 100% owned by only two non-spouse individuals. Information provided to me is that together these two individuals own 100% of both companies.

Question: Because these are S Corp.s is it even possible that the two companies are of the same Controlled Group of Companies?

My confusion is that because of the nature of S Corps. Mr. A and Ms. B each own some percentage of each company (and are bro-sis co.s), but unless A and B form a holding co. they do not each/together own 100% of the corp.s as set forth in IRC Section 1563.

The individuals (A and B) insist that together they own 100% and, therefore, the companies are within the same controlled group of companies.

Any guidance would be appreciated.

We are looking for an easy to use software product that will produce COBRA invoices, required notices, receipt reports, etc? We currently are using just excel and word and relying on paper files to remember notice and termination dates. If anyone knows of anything short of a full blown payroll / HR system, I would appreciate some suggestions.

Thanks.

Company A becomes a company in 2002. Also in 2002, Company A buys Company B. Company B has an existing 401(k) plan. Company A assumes sponsorship of Company B's plan. The plan is amended and the name and tax i.d. number of the plan changes.

I was going to file a final 5500 for Company B's plan for 2002 showing the assets transferring to the newly named Company A's plan. However, when I go to prepare the 5500 for the newly named (but not new) plan, I am perplexed as to whether to mark the box titled, "the first return/report filed for the plan" because according to the plan document, the effective date of the plan is in 1989. And, the beginning plan assets will equal zero.

So, now I am confused. If I just change the name and tax i.d. on the form 5500 and file it as a continuation of Company B's plan, I assume the EBSA will wonder what happened to the plan with the old name and tax i.d. number. If I file a final 5500 under the old name and start a new 5500 with the new name, can I say it is the first return and still show an effective date of 1989?

I'm sure I am missing something major here, but I have searched the boards and my reference materials and I just don't know what to do.

We are a TPA for many retirement plans (mostly 401k). Many of the mutual funds we use pay revenue sharing. For plans which we receive large amounts of revenue sharing, we like to offer incentives to clients. Currently, we offer them reductions in our fees.

We have had clients ask about the possibility of allocating some of the revenue sharing to the plan and distributing it among participants. Someone once told me that it was not legal to allocate any of the revenue sharing to the plan, trust, or participants. They said that using to offset administrative expenses was the only way to offer anything back.

I have searched the internet in hopes of finding some sort of article discussing the restrictions on how revenue sharing may be used/allocated. I have found many articles which discuss what revenue sharing is, but none that discuss the legal restrictions on them. Can anyone help me?

Thanks.

Without getting into the Deemed IRA stuff (eeckkk), is it possible to roll an IRA with aftertax contributions to a profit sharing plan under 401(a). Assuming that the recordkeeper will track any basis that exists prior to rollover and assuming that the recordkeeper will track the rollover money separate from profit sharing money. Also assuming no future contributions to IRA will take place.

I seem to be reading that it's not allowed and that EGTRRA asection 643 only applies to non-taxable portions of a former 401(a) account being able to be rolled over??

Help!

Thanks

If you have a participant directed plan that has 100% its assets in qualifying assets and quarterly statements are issued by the TPA, is additional disclosure required? Since the statements are not provided to the participant by a regulated financial institution do you need to list the Financial Institution and asset values in the SAR?

A participant takes out a loan at age 53 with a 5 year repayment option. The participant terminates employment at age 56. How should the loan be handled if the participant takes a lump sum distribution? Since the participant separated from service after age 55, would she qualify for the 10% penalty exemption?