We are thinking about bringing in a cross-tested PS plan for an employer that also has a DB pension plan. I know there are more complex rules regarding the min alloc gateway for DB/DB plans that depend on the highest HCE aggregage allocation rate, but my biggest concern is if we can actually do the cross-testing for the PS plan. Does the normalized value of the DB accrual always need to be included in the rate group test, or ONLY If the DB plan cannot pass coverage on it's own, so must be combined with the PS plan for 401(a)(4)? Also, what about the ABT portion of the cross-test. Do the DB benefits need to be included there? My concern is that we use the Datair DC testing module, and I was told I could not use this for DB/DC combos because the system does not calculate the most valuable accrual rate, only the normal accrual rate. Any help is very much appreciated. Many thanks!

If a sole proprietor has a SIMPLE IRA, makes "salary reduction contributions" throughout the year but dies prior to making the employer contribution, is an employer contribution still required? If so, who makes it (there are no other employees)?

Hello, I'm 22 and I opened up a Roth at my credit union about 2 months ago. I have heard lately that it is better to open your roth with an investment company rather than a bank? Can anybody shed any light on this and give me some recomendations or websites. Thanks.

when assets were distributed from a terminated ps plan, the loss was understated and participants were paid out more than they were supposed to be. what should be reported on the final 5500?

Can an Employer contribute to an HRA for Employees based on their bona fide wellness test results? Currently the Employer offers contribution discounts to employees who pass at certain levels. They want to move towards an HRA type of plan that will allow the Employer to contribute at different levels based on the wellness results.

What do you think?

There is a disagreement regarding the use of the ARA in funding.

Is it permissible to use the assets reduced by the ARA regardless of funding method (or even better - is it up to the discretion of the actuary whether or not to do so).

I recollect the IRS coming out and stating that the assets are NOT to be adjusted by the ARA. As a matter of fact, the 2002 Schedule B states on 9q - "Valuation assets should not be adjusted by the reconciliation account balance when computing the required minimum funding." (This actually seems to have gone beyond what I thought).

I thought it was only used for immediate gain funding methods (those creating bases and therefore requiring the equation of balance to work).

Any thoughts??

I HAVE A PLAN WITH MORE THAN 5% OF ITS ASSETS IN LAND (5MIL OUT OF 7MIL TOTAL). THIS IS WAY OVER 5% IN NON-QUALIFYING ASSETS. WHAT ARE THE BONDING REQUIREMENTS FOR SOMETHING LIKE THIS? THEIR SURETY BOND IS FOR 500,000 WHICH IS THE MAX THE IRS SAYS. DOES THE TRUSTEE HAVE TO BE BONDED FOR THE AMOUNT OF THE LAND OR DOES THE SURETY BOND COVER THAT ALSO?

THANKS FOR ANY HELP GIVEN

irs at 1999 aspa conference said it was ok to round down in determination of the top 20%.

is anyone using that method ?

We have a customer who has been approached by Deloitte & Touche regarding a KEYSOP which I have seen several threads on in this message board, the last significant one from 2000, however. I have two questions:

1. Since 2000 has there been any further clarification from any authority on the use of a leveraged or partially leveraged KEYSOP for a for-profit company, and

2. If company adopts this plan what does D&T provide? Do they provide plan design, plan docs, opinion letter AND administration and recordkeeping, or does company have to go find another company to handle admin and recordkeeping aspect? If they must find separate admin and recordkeeping, where do they find it?

Any help appreciated. Thanks.

11e(3) Number of employees excluded because they terminated employment with less than 501 hrs. of service & were not employed on last day of plan year......

Does this refer to permanent employees or all employees (permanent and temporary)? In other words, do you include employees for a company that has several people that work less than 90 days each year and are considered temporary help?

Can an employer adopt a Plan of a PEO and have their own individual company plan and what limits apply for contribution purposes?

Company A is a sole prop owned fully by Jane Doe

Jane Doe & John Doe also own Company B, a partnership 50% each.

With Stock Attribution, they both own 100% of both companies.

Company A has one additional employee not related.

Company A has earnings of $56,461

Company B has a loss of $19,478

How much of the net earnings and ownership % would you allocate to John vs. Jane Doe to calculate the contribution for the age weighted Profit Sharing plan ?

Any ideas??? It would seem that the partnership can NOT have anything due to the loss.

I have a client who is trying to claim reimbursement for his Sonicare Toothbrush that was purchased by his dentist. I was wondering since this isn't typically something that is covered by insurance companies, is it eligible for reimbursement? I just thought that I would get some input on the subject since it is a toothbrush and you can't normally claim reimbursement for an "over the counter" toothbrush, so I don't see why this would be covered too, but please provide some input for me, and correct me if I am wrong in thinking that this is not covered for reimbursement.

I use the otherwise excludible method to allocate only the 3% top heavy minimum ees and avoid the gateway. My ADP test is better without otherwise excludible.

Can I otherwise exclud. for gateway and test without otherwise excludible for ADP?

If you require participation in certain benefits, such as you must enroll in both medical and dental coverage, what language in the wrap around doc should be used to convey that, and in what section would it go?

What about if you require all employee premiums to be made pre-tax through the 125 plan?

Takeover plan (unit accrual) effective in 2000 defines compensation as three year average starting with date of participation. Two principals at the 401(a)(17) limit shown in 2/28/2002 (EOY) val with average comp of $170,000 which would be $166,666.67 if not for the pre-participation comp exclusion.

Another person (with 10 YOS) paid out based upon post-participation comp only after two years in the plan.

I think that this is not permitted for a safe harbor plan unless each participant has a compensation history at least equal to the number of years in the average. So, in other words, pre-participation comp can be excluded once a participant has three or more years of participation.

Cite is 1.401(a)(4)-3(e)(2)(i) "be no shorter than the averaging period"

This is less than 100% clear, however. Opinions? The plan has no FDL.

Any ideas on how a retiree that wants to do substantially equal payments to avoid 10% penalty can maximize monthly income. With the new 120% of fed mid term rate, in light of rates so low, monthly payouts are almost unliveable!

I posted previously regarding this topic and am following up with another question. In my prior post I described a situation where an employee pays $225 per week for daycare regardless of the number of days the child attends. The consensus was that even if the employee only worked one day in a week, the employee would be entitled to reimbursement for the entire $225 because that's what the employee had to pay to the daycare provider.

The employee is a teacher who gets one week off for spring break and two weeks off for Christmas. The daycare provider charges $225 for each of those weeks even if the child does not attend. Is the employee entitled to reimbursement for these three weeks?

If a company who is offering a SIMPLE IRA is having financial trouble, can they terminate the SIMPLE IRA in mid year? If yes, what steps must they take to shut the plan down?

They already have used the 1% contribution percentage in 2 of the last 5 years, so terming the plan is the only option. For 2003, they are supposed to make a 3% match.

I appreciate your help!!

I have a client that is a multiple employer plan. How is the ERISA audit requirement imposed on this kind of plan? By individual participating employer or by the whole plan?