I need some assistance from the community with the following scenario.

We had a DB participant pass on in January 2003 who was receiving a single life annuity. As part of a legacy benefit, this participant had employee contributions that they were receiving a non-taxable portion with each monthly annuity payment. The question is, now that the participant has passed on, what should be done with the remaining balance of their non-taxable base? For example, the participant has a remaining non-tax base balance of $2000 as of 1/31/2003 which they were receiving apportionments of $30 per month over the life of the annuity. Since there is a remaining balance of the non-forfeitable employee contributions, do we cut another check for the remainder of the employee contributions and pay to the beneficiary? Any other alternatives?

Thanks,

MikeH

What is the IRS form that is used to report and pay withheld taxes from distributions.

I looked at Form 941 but that doesn't seem to be very appropriate for the purpose - purhaps there is another form?

Also, Form 941 once filed, need to be filed each quarter forever even if no taxes are withheld!

Perhaps, there is another form for reporting and sending in taxes withheld from pension plan distributions?

Thanks for help.

A plan has a 401(k) component, a 401(m) component, and a non-401(k)/non-401(m) component. The non-401(k)/non-401(m) component consists of regular nonelective contributions, QNECs and top heavy minimums. The regular nonelective requires 1000 hours and last day of employment. The QNEC has no accrual conditions. The top heavy requires employment on the last day. In performing 410(b) coverage testing, can I exclude persons who terminate during the year with less than 500 hours? Or does the fact that the QNEC has no accrual conditions prevent me from doing that?

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Let me know if you have any trouble with this procedure (post a reply message into this topic). Thanks,

Dave Baker

I have a PLLC plan with 100% husband/wife ownership. The wife took $100,000 in comp (W2). The husband took no comp. There are no employees. The cpa wants to set up a db/dc combo plan. Based upon the db plan specs, our actuary has computed she can contribute $39,291. The CPA is under the impression she can also contribute and deduct $25,000 in the dc plan. For a total deduction of $64,291 because there are no employees.

I've reviewed 404(a)(7) (A) and © and it states if one "employee" is covered by both.... then the limit is the greater of 25% or the amount nec to meet the min funding.

I don't know at this point if the CPA is confusing deduction limits with the removal of the 415e or I've lost it all together.

Please help. What is the total deduction this owner can take?

Our 401(k) plan has publicly traded employer stock. Our last S-8 filing was several years ago. I am trying to determine if a new/additional S-8 needs to be filed. For purposes of the S-8, how are the number of shares to be registered determined? Is it the number of shares the plan will buy due to contributions, loan payments, fund transfers and so forth? The number of shares the plan sells to raise money for plan distributions? The number of shares distributed in-kind to participants? Some combination (either add or net the purchases and sales) of these numbers?

Hopefully this makes sense to someone else because no one here seems clear on the matter…

Thanks.

PAL

P.S. Yes –- I am trying to see if we have a copy of BNA Tax Management Portfolio #362 in the corporate library but I am not in the same physical location so it may take me awhile to get out there.

A plan allows for participant loans and also provides for the maximum "cure period" as provided for in the final regulations. The "cure period" ends on the last day of the quarter following the quarter during which the participant missed a loan repayment. In your opinion, does the regulations require that "interest" be accrued/applied on the missed loan repayment the is made prior to the end of the "cure period"? In my opinion, the regulations are not explicit in this regard. I believe that the regulations could be read either way, and that either way would be acceptable. On the other hand, the regulations are explicit in the situation where the participant does not make the missed repayment by the end of the "cure period" and the loan is labeled a "deemed distribution." The regulations explicitly state that the amount of the "deemed distribution" is the amount of the outstanding balance with interest applied through the end of the "cure period."

I'm obviously doing something wrong. When I try to post a new thread, I get a reply "Sorry, you are not authorized," etc...... and it tells me to log in and enter my password. When I do, and try to start a thread, I get the same thing all over again. Never had this trouble before, but I'm completely hopeless as a computer user, so maybe someone can tell me how to use this new-fangled software to post a thread. Thanks!

Any issues to be on the look out for where participant directs plan trustees to purchase annuity with portion of participant's account balance (plan to be owner and beneficiary and participant is, of course, the annuitant)?

Company A has three owners who each own 33 1/3%. Company A employees over 100 employees. A

couple of years ago the company was to be sold but the deal did not go through. At that time one of the owners of Company A became the owner of a spinoff company which is an S Corporation. Company B has 7 employees and is considering a SIMPLE 401(k). The owner of Company B will eventually grant the other two owners of Company A 33 1/3% ownership each in Company B. This will make the ownership of the two entities the same. I think this constitutes a Brother-Sister Control Group but would appreciate any input.

If a Client has a Simple IRA plan and they want to establish a 401(k). Do they have to actually terminate the SIMPLE IRA or do they just have to stop contributing to the SIMPLE IRA? How would they terminate a SIMPLE IRA if they had to?

Can a 401(k) plan participant who has properly enrolled in the plan's self-directed investment program purchase stock for his 401(k) self-directed account from his own after-tax account if the purchase is made at the fair market value of the shares on the date of the purchase or does it violate IRC sec. 4975? In other words, he holds shares of a thinly traded company in an after-tax brokerage account and would like to invest part of his 401(k) money in that stock - so can his 401(k) account buy those shares from him? I didn't think that there was a Title I of ERISA problem inasmuch as I didn't think one could be a fiduciary to him or herself with respect to self-directed retirement monies - but I also know that the IRC does not always parrot Title I.

What are the pros and cons to converting a regular IRA to a Roth IRA? Currently I have a regular IRA at my credit union that is earning about 2% interest. There is a $36,000 balance. If I convert it to a Roth IRA will I have to pay income taxes on the balance? I am single and make less than $95,000 per year.

Thank you,

Gibson

I work as a health care claims advocate for plan sponsors that have fully insured group health plans. I have two scenarios I would like some feedback on:

1. Patients call the plan sponsor directly to resolve claims issues. The plan sponsor forwards the claims issues to me to work directly with the insurance company. The plan sponsor will need to either:

(a) obtain authorization from the patient to use and disclose their PHI (that flows through to me), or

(b) the plan sponsor needs to amend the plan and certify to the plan administrator that the plan document has been amended and the plan sponsor agrees to comply with the amendment.

If the plan sponsor amends the plan document, no business associate contract is needed since I do not work for the covered entity. Since the plan sponsor must agree to comply with HIPAA privacy through the plan amendment, I would think that the plan sponsor would want some sort of agreement with me where I will also comply (e.g., through the service agreement).

2. I work for the plan sponsor and patients call me directly to advocate their claims with the insurance company. I work directly with the insurance company to get the claims issues resolved. If the insurance company denies the claim, I then go to the plan sponsor for resolution.

I assume when the patient calls me directly, there is no PHI so no authorization is needed. If I need to go to the plan sponsor and I only provide them with summary information, I do not need patient authorization. If I need to provide the plan sponsor with PHI, either I need to get patient authorization or the plan sponsor needs to amend the plan and certify to the plan administrator that the plan document has been amended and the plan sponsor agrees to comply with the amendment.

Do you agree with my assessment? Any feedback will be most helpful. Thanks!

Who is included in a 414(s) test for a participant in a safe harbor plan? The non-excludables for 401(a)(4) and/or 410(b)?

We have an employer with one employee on FMLA, and one employee on disability. April 1 is their enrollment date. Are these employees able to make an election as of April 1? or do they need to wait until they are back from leave and make a new election from the day they come back to the end of the year?

Is it too late to convert a traditional IRA to a Roth IRA for tax year 2002? I know you can add new money for tax year 2002 to a Roth prior to the 2002 tax filing deadline (April 15th) but is it also true for conversion?

How do you account for limited partnerships in which the statement is received on a quarterly basis when an account is certified on a monthly basis? Many of these statements received from the LP are on a one- to two-quarter lag, so I would like to know if you adjust for capital calls and return of capital when determining the price on a monthly basis (based on the last statement received).

May Qualified Match Contributions (QMACs) be used in satisfying top heavy minimums?

EGTRRA made changes so that match contributions can be used toward minimums without the problem of "can't be included in ACP" - does the same apply for QMACs? Can they be used toward TH minimum and still be used in ADP/ACP tests?

I am assuming they can, but can't find anything definite that states this.

Thanks in advance for your response!

The Final Loan Regs and the preamble seem to suggest that a plan has the option of suspending repayment during leave for military service, but is required to charge a rate of interest no greater than 6% during that leave.

Is this 6% requirement imposed even if the plan does not permit a suspension of payments during military service?