Does any one know the definition of a financial institution as it would pertain to Rev Proc 2003-16? Wondering if the definition includes recordkeepers.

Can anyone here tell me what the regs say regarding the required time that dependent care expenses should be reimbursed? The situation I have is someone with weekly payroll who also submits the claims weekly. Can they be reimbursed monthly, bi-weekly, etc. And does it need to be spelled out in writing how often they need to be reimbursed?

thanks,

Tim

Can someone in layman's terms briefly tell me why a small business would be set up as a S-Corp versus a regular corp?

dang, you put one report out there and you get someone who wants another. Ha!

This is the ADP report.

Same rules as before, be careful, save a copy of Relius's version somewhere if you hate this one. Also note, be careful when you download an update or anything because this report will be overwritten and then you will lose it if you actully happen to like it.

This report is different from Relius in that it:

sorts alphabetically rather than by comp. heck, the old 1/3 2/3 rule for determining HCEs went away a long time ago. Well, ok, I have been using this report so long, maybe Relius' report sorts alphbetically now, I don't know.

It is hardcoded that if an NHCE's comp is greater than 90,000 there will be a note indicating ee is an HCE next year. Maybe I should make it say 'maybe'. I did not look at top paid group or possible termination status.

Age will print if ee is 49 or more to indicate possible catch-up availability, now or in the near future. Verify in census, as I don't know if age nearest or last logic is coded in specs.

An indication if ee is excluded from ACP test, and the reason.

There might be a few other totals that show up as well.

Assume a 401(k) Safe Harbor Profit sharing Plan that elects the 3% non-elective contribution (SHNEC) to satisfy ADP. Sponsor makes an 8.22% PS contribution integrated with social security.

1 of the 3 NHCE’s terminates with greater than 500 hours and is entitled to the 3% SHNEC, but not any additional profit sharing allocations due to 1000 hour and last day employment conditions. The 1 NHC's total plan allocation rate is 3%.

The only HCE receives a 14.50% allocation rate (11.50% 401(a) including integration and 3% SHNEC). All other NHCs receive a 11.22% allocation rate (8.22% 401(a) plus 3% SHNEC).

Since all 3 NHCE’s benefit with at least a 3% accrual rate, 410(B) coverage passes. However, since one NHC only received the 3% SHNEC vs 11.22% for the other 2 NHCs plus the HCE, it has been suggested to me that the allocation formula for the PS plan is no longer a designed-based safe harbor and would need to be tested for non-discrimination under the General Test. The rationale is that the SHNEC is considered a 401(a) contribution.

Your opinions are greatly appreciated.

Buying and holding real estate in a IRA. What are rules?

My client is a PEO. The PEO has a new client organization (CO) that is adopting the PEO's 401(k) plan. The CO has an existing 401(k) plan with another PEO. It is a safe harbor plan. They are merging the "prior" plan into the current PEO's (my client) plan.

Questions:

For purposes of safe harbor and the notice requirement, is there a notice requirement in the "new" plan?

assuming the notice requirement was satisfied in the "prior" plan, is this sufficient for purposes of the "new" plan?

if not, and there IS a notice requirement for the "new" plan, then what is it? i've read the ERISA Outline Book and it just doesn't hit home with me. something about by the effective date of the new plan? meaning the date the participation agreement was signed or the date deferrals begin?

I hope someone can offer some help!

I am in the process of developing a RFP for 401(k) recordkeeping services and Investment Vehicles. Any suggestions on resources providing free samples, preferably via the internet? To date SPARKS and some consultants have been helpful.

We have an employee who is requesting a hardship distribution to build a house. What kind of documentation do we need?

Business owner and spouse have been taking RMDs for several years. Owner's RMD for 2003 is $75,000. Owner took RMD of $10,000 in January 03. Owner died in March 03. Financial institution says spouse must take remainder of owner's 2003 RMD distribution by 12/31/03 ($65,000).

Financial institution says the balance of owner's IRA can be transferred to spouse, but spouse's RMD for 2003 must be recalculated including rollover value from owner. I thought 2003 RMD was based on 12/31/02 value. This looks like double dipping if spouse has to recalculate her 2003 RMD.

I need advice please.

My prior employer withheld my 401k contribution from my 2/14/03 paycheck and has not invested it yet. Before, we have always invested funds on the exact date of payroll, i.e. 2/14's would have been invested on 2/14.

I've contacted the HR Manager but she keeps saying it will be any day. Other employees are getting concerned too.

My question is: how long is it before they legally must invest that $? (I had thought it was to done as soon as administratively possible but no later than the 15th business day in the month following the month of deduction from payroll?)

What ramifications could they face if they do not invest by required dates?

Since I no longer work there, I'd like to move my $, but I can't do so until final $ is in there, so any input is appreciated very much.

A plan limits the circumstances under which participants may receive a loan. An error by the TPA allowed a participant who did not meet the loan requirements to receive a loan. What is the proper correction for this error?

The New York Times recently reported that Charles Schwab, Goodyear Tire and Rubber Great, Northern Paper, Tech Data, the El Paso Corporation and the CMS Energy Company plan to stop making matching contributions to employee 401(k) plans.

I'd be interested in your observations on whether you are seeing this among your clients?

Do you know of other major Fortune 1000 companies that have done so?

Anything of importance to report to us non-attendees?

Have a 401(k) safe harbor plan that uses a SHNEC. There is a former participant (terminated in mid-2001) that received a W-2 in 2002 for worked performed in early 2001. Is this person entitled to the SHNEC?

These are the only facts I currently have.

An employer pays a dividend in stock to a leveraged KSOP. The dividend attributable to allocated shares is allocated to the participant's account balances. What about the dividend attributable to the encumbered shares? I understand that if the dividend were paid in cash, it could be used to service the loan or pay expenses. Should this stock dividend be treated as a net gain to the trust and allocated to all participants based on total account balances?

How do you calculate the experience (gain) or loss for an immediate gain funding method if both the Expected Unfunded Accrued Liability and the Actual Unfunded Accrued Liability are negative?

For example:

EUAL = -500

AUAL = -250

Do you limit either or both UAL's to zero?

In doing year accounting I discover ineligible employee was allowed to make contributions. He was ineligible as he had not satisified a year of service.

I believe we can choose to give the money back or the employer can give a QNEC to each simularly situated employee. ( ie all with less than a year of service)

Here is my question: If we give the money back do we need to redo the employe's w-2 for 2002 and tell him to redo his tax return, or is there another alternative?

thanks for your input

Ed

Client needs 2001 5500 forms - ordered from IRS, never received, filing deadline next week. I sent him blank EFAST forms and am now wondering if they may be completed by hand (he does their 5500). If not, would the best approach be to complete the EFAST and wait for the DOL to reject it, thereby providing him with the forms for handwritten cases? Please advise...Thanks in advance.

You have to be careful with this one as it can only be used under the Relius reports and not custom.

Thus it will overwrite the landscape version of the correction report. so if you are going to try this make sure to save Relius' report if you don't care for this report.

This report will show the testing results under the pre-SBJPA Rules (thus the proof the plan passes) as well as the results under the new rules.

There is a Totals row at the bottom. It works fine as long as there is both an ADP refund and ACP refund. Otherwise if there is only an ADP refund it doubles the numbers. That doesn't effect anything else, but I haven't figured out how to control it. (Actually I added fields to divide by 2, but they are supressed)

But someone asked once how do you prove the plan passes with the refunds, so here it is.