I am looking for resource on how different entities effect compensation for qualified plans/benefit purposes. The ERISA Book has some information- but I need a more comprehensive guide or resource.

Your suggestions are appreciated.

Can anyone refer me to a good source of information regarding the gateway/cross-testing rules for DB and DC plans. I am especially interested in scenarios in which the employer sponsors a PS and a cash-balance plan. Any on-line resources or books for purchase?

Searching for some perspectives. Plan A merges into Plan B on 6/30. Both have calendar PY. Both have a non-zero Credit Balance. Both have Reconciliation Account. The surviving plan has a full funding credit, without regard to the merger.

I do not have a change of method, but am using the techniques in section 4.07 of Rev. Proc. 2000-40 to develop my funding standard account. Anyone willing to share some experience?

Has it been determined how to calculate COBRA premiums for HRAs? Is an ex-spouse entitled

to COBRA on 100% of the balance in the employee's HRA at the time of the divorce?

A plan filing a Schedule H for 2002 moved their investments in 2002. The assets moved from a mutual fund company that charged the plan $8,000 in surrender fees. Are these fees to be reported on Sch C for 2002 and if so, how would the fees be coded.

Thanks.

What are the thoughts about Employer's who consistently make errors in their deposit of loan payments to the plan? It is usually an excess amount, then the employer will request the plan to refund the excess to them. Also, the same questions in regards to Employer contribution and Employee deferrals.

Posted same question on Distributions from Retirement Plans

Customer wants to use rate higher than IRS rate ( He says 2002-62 is only a guideline). If he insists, can we do his calculation using the higher rate? Is it our responsibility to tell him no or warn him ? We are the Bank Trustee of his IRA.

Thanks in advance for your help

Customer wants to use rate higher than IRS rate ( He says 2002-62 is only a guideline). If he insists, can we do his calculation using the higher rate? Is it our responsibility to tell him no or warn him ? We are the Bank Trustee of his IRA.

Thanks in advance for your help

I'm wondering if anyone out there is familiar with a medical group structure known as the "satellite group" setting. If not, perhaps the truly ambitious among you would be kind enough to wade through to offer suggestions as to the following.

We act as Plan Administrator for the 401(k) Profit Sharing Plan of a group of hospital-based physicians. Unlike the traditional medical group structure, wherein each of the physicians is an employee of a single corporation, physicians engaged by our client are actually employed by their own individual satellite service corporations ("satellite service corporations"), which, in turn, are engaged as independent contractors by our client (the "group service corporation") to provide physician services on behalf of the group service corporation. However, it bears noting that the group service corporation is solely owned by the physicians who are engaged by the group through the satellite service corporations. There are no outside or "third party" owners. Each physician is only issued shares (roughly 7% ownership) of the group service corporation at the time when they become eligible to participate in the Plan. Each of the physicians is also the sole owner of their respective satellite service corporation and each has no employees.

The group service corporation adopted a 401(k) Profit Sharing Plan (the "Plan"). The Plan definition of "employer" includes all Affiliated Employers, regardless of whether the Affiliated Employers adopt the Plan (hence, the issue of shares for the individual physicians to become eligible to participate). In addition, any Plan participant who is actively employed during the Plan year (calendar year) is eligible to share in the discretionary profit sharing contribution. The profit sharing contribution is paid out quarterly as the group service corporation reconciles the amounts it owes in compensation to the various satellite service corporations. To illustrate, if a particular satellite service corporation is owed $100,000 in compensation for a given quarter, the group service corporation would pay compensation of, say, $93,000 directly to the satellite service corporation. Then, the group service corporation would cut a check for the $7,000 profit sharing contribution directly to the participant's broker (directed investment accounts) and deduct the $28,000 ($7,000 x 4 quarters) profit sharing contribution on its income tax return at the end of the Plan year. The 401(k) elective deferral portion of the participant's contribution is paid directly from the satellite service corporation and thus reflected on the W-2 that the physician receives from his or satellite service corporation.

One of the physicians is leaving the group and terminated the contract between his satellite service corporation and the group service corporation as of March 1, 2003. My understanding is that the satellite service corporation and the group service corporation are no longer "Affiliated Employers" as of March 1. In terms of compensation, the individual physician will likely be paid W-2 compensation from his satellite service corporation of approximately $75,000 for the period from January 1, 2003-February 28, 2003. However, you should appreciate that there is a back-up of receivables due to the lag between services and collection, such that compensation from the satellite service corporation to the individual physician will easily be in excess of $200,000 at Plan year end. The question is whether we need to take all of it into account.

1. Is the individual physician required to make a profit sharing contribution to himself for Plan year 2003? I am fairly comfortable the answer here is yes.

2. Is the individual physician allowed a profit sharing contribution based only on pre-termination compensation? Appreciate that the individual physician does NOT want to make a contribution of any amount for 2003 and that all of the other participants (all $200,000+ W-2 comp.) are getting $28,000 profit sharing contributions.

3. What if the individual physician remains a shareholder of the group service corporation until the end of the year? Would this require us to take into account the post-March 1 compensation? Even if neither the individual physician or his satellite service corporation will provide services to the group service corporation after March 1?

Any advice on any or all of these questions is much appreciated!

Regarding testing a cash-balance plan using general test (on benefits basis). If your plan's actuarial equiv. interest rate is something close to 30-yr bond rate, is "normalizing" needed from plan actuarial equiv. to standard mortality and interest rates for NAR purposes ?

What if the cash-balance plan allowed for lump sums, under current interst rate environment would you likely have a MVAR greater than the NAR due to 417(e) subsidy ?

Plan has a last day requirement for match. Relius allocates the match correctly, but on the General Nondiscrimiantion analysis it will report terminated participants not receiving a match due to the last day requirement as benefitting under 401(m). Also it reports participants that have terminated in a prior year as eligible, but not benefitting for 401(k) & 401(m), but does correctly report those same participants as excludable for 401(a). Any thoughts on where my problem lies?

We have a 401(k) profit sharing plan that allocates a discretionary profit sharing contribution at the end of the employers fiscal year (ending 3/31/03) for the calendar plan year (ending 12/31/02).

It also has a last day of employers fiscal year employment requirement in order to share in the contribution allocation.

For deductibility purposes, when we look at eligible compensation for the fiscal year, do we look at everyone eligible to participate in the plan or only those participants eligible to share in the contribution allocation?

I am trying find out if there are specific, minimum funding requirements of private sector (public companies) DB plan sponsors that have underfunded plans. For example, if company XYZ is underfunded by greater than 20%, are they required to make a certain % contribution within a certain period of time? I understand that this is addressed within IRS code Title 26 Sec. 412, however, I am having a hard time understanding what is written there.

Also, are companies allowed to hold a certain % of their own debt or equity within a plan? If so, how much? For example, could company XYZ sell its stock to its plan in exchange for cash and then turn around and contribute that cash back to the plan?

You're help is greatly appreciately!

Last year, a 5500 was submitted with the box checked showing it was the final return for the plan. However, Schedule H showed $11 remaining as end of year plan assets (which is correct). Should I amend the return to uncheck that box or leave it? I am planning on continuing to file 5500's untill that money is distributed.

One other simple question... on the additional reporting for the SAR, are loan balances included in the asset value or is that just the amount invested?

Thanks,

Rachel

Is the Federal Maximum cap for Dependent care still $5,000? Can it be raised? Can insurance contributions increase if premiums increased during the year, or is there a cap as well? Can you make election changes at anytime during the plan year, if you want to increase your contribution due to increase in premiums? Are there restrictions to the plan documents? Help Help!!!

Can someone please clarify for me where I should report on the Form 5500 terminated participants from a 401(k) plan who have not yet taken distribution from the plan?

I have been including them in the active participants count, but each year I second guess myself.

Thanks

Can someone point me to the procedure to use the SSA to find missing participants?

I have a potential client who has an existing discretionary profit sharing plan (restated 03/2002) with 1 HC and 14 NHCs, and offering life insurance to participants. The plan's annuity contract is not a group annuity but a single annuity where the HC is the annuitant. The annuity is held in an SEP IRA in the PSP's custodial account.

Question 1: Shouldn't the annuity be a group annuity instead of a single?

Question 2: Shouldn't the PSP's custodial account not contain an SEP IRA?

I could really use any applicable citations if any are available.

Thank you.

Hi all.

We have a participant that is requesting a combination payment of his ESOP - rollover & direct pay.

Question is he has both pre-1987 and post 1986 shares. As you can image, the cost basis for the shares pre-1987 is lower.

Which shares should be used on the direct pay? Is there a standard way of issuing shares? FIFO, LIFO?

Thanks.

I converted 4 traditional IRA’s to Roth IRA’s in 1998. I would now like to consolidate the four into one Roth IRA. As far as I know this is not an issue.

Once the consolidation has been completed, though, I would like to begin making annual contributions. Can someone please explain to me the contributory rules for converted Roth IRA’s. I don’t plan to take any distributions from this IRA until retirement, which is 30 years in the future. Thanks for the reply!