An employee was allowed to make deferrals before he was eligible. He is still employed, and is now eligible and making deferals. Do we have to incorrect his incorrect deferrals and match?

I am looking for any information regarding a 105 medical plan.

Has anyone had any experience with the following type of situation:

Company A is spun off from Company B. Company B operates a 401(k) and leveraged ESOP in which Company A participates. Under consideration is whether Company A can or should move the Leveraged Stock its employees hold in Company B plan when the assets are spun off to a new unrelated plan for Company A's employees.

Company A is inclined not to retain the Employer Securities of Company B in its new plan but rather sell the stock of participants and maintain the new plan strictly with mutual fund offerings.

Any experience and feedback with this type of scenario would be appreciated.

Andmik

It is my understanding that if a participant has a term date of 12/31/2002 for a 12/31/2002 plan year end, they are looked at as being there on the last day of the plan year and would be entitled to any kind of employer allocation. That is assuming all other requirements are met and if the client has elected to exclude ee's due to the last day rulle.

Can someone please clarify this?

I believe there was change in the Regs. issued in the last year or so re taking J&S annuities out as a distribution option. Does that mean that the J&S option would no longer apply across the board even to benefits accrued prior to such an amendment? Or would that option need to be preserved for accrued benefits as in the case of a PSP that has MPPP assets from a plan merger?

I have been researching church plans and whether or not they can adopt a 401(k) Plan. It would seem they can (i.e. testing issues, reporting requirements and document submission, etc.). The client would like to see something in writing that specifically says a church plan can adopt a 401(k). Any suggestions?

Additionally, I have not been able to find the definition of non-electing church plan (have looked up the code sections, but am missing something).

Any suggestions are greatly appreciated!

My employer cancelled my health insurance policy after I made several attempts to call and could not get through. I mailed my payment in before the deadline and they sent it back on week after the deadline. I am disabled and was due to be eligible for COBRA. Can they do this. I have special circumstances that prevented me from being informed on any changes made to the health coverage, and was not informed. I called my boss and got no where.

A plan that is considered an "exclusively safe harbor" plan is deemed to not be top-heavy even if the key employee percentage exceeds 60%. What does "exclusively safe harbor" mean? Can a plan have a profit sharing provision and be considered "exclusively safe harbor" if the only contributions made to the plan were deferrals and the 3% non-elective safe harbor (the discretionary profit sharing provision was not used)? What if the plan has profit sharing funds in it from prior years but during 2002 the only contributions made were deferrals and the 3% non-elective safe harbor?

I would appreciate any help that you can provide. Thanks.

Jane

We have a take-over plan (those are always the fun ones....ha ha)..

The employer has as 401k provision.

For the one and only HCE the employer has always been coding the deferrals as after-tax. That is, the employee has never received a reduction in federal income due to deferrals. Also the deferrals have never shown up on the W-2.

The plan, however, has always treated them as pre-tax and does not allow after-tax contributions.

The HCE has just retired and needs paid out.

Any ideas on how to handle???

Thanks

Dee

In order to claim the waiver of audit for a profit sharing plan, does a plan need a bond in the amount of 10% of assets if the assets are 100% qualifying assets, or is this just a requirement of this question for if the plan had more than 5% non-qualifying assets?

Facts: 401k Plan has ability to allow profit sharing, match and deferral. 2002 contributions consist solely of deferrals. Profit sharing has last day rule restriction but match does not.

Interpretation: The instructions for Sch T Line 3 seem to indicate that box 3b (no HCE's benefit - profit sharing piece) and box 3d (all non excludables benefit - deferral and match pieces) should both be checked and then line 4 should be left completely blank.

Question: Is the interpretation correct? I'm being told by another practitioner that what I should do is leave line 3 blank and fill out line 4e (name the disaggregated part, leave the ratio percentage column blank, and fill in the appropriate exception code).

Either method is simple, but what does the DOL want? Thank you for any help!

IRC Section 413©(4) provides that each employer in a multiple employer plans is treated as maintaining a separate plan for purposes of the minimum funding requirements. Does anyone know if this means that if a multiple employer plan has unpaid minimum contributions, that each contributing employer (and controllled group members) will be liable only for its own unpaid contributions and not for the unpaid contributions of other contributing employers? Is IRC Section 413©(4) the primary authority for this or is there other authority? Does Prop. Reg. 1.413-2(e) contradict IRC 413©(4)?

Thank you for any assistance. I really appreciate it.

What can we do if you have a couple of participants who just refuse to get their distribution forms back to you so that you pay them out and be done with the plan termination. We have placed calls to them at home and at work and they want return our phone calls. We are talking about vested amounts over $25,000.

Could we force a distribution? Do a lump sum or roll it into an annuity account. This only being done after we send another letter and telling them of our intent.

Has anyone ever been faced with this? Help..

We were hit with a pretty significant ice storm, power has been out since Saturday evening an many areas. Who would Plan Sponsor's contact about requesting extensions for 3/15 deadlines? Since they can always extend a tax return, we are probably more concerned with the ADP/ACP deadline. We don't want to get with the 10% penalty.

Section 415(B)(2)(E)(ii) mentions benefits subject to section 417(e)(3).

Reg. 417(e)-1(d)(6) says: "This paragraph (d) (other than the provisions relating to section 411(d)(6) requirements in paragraph (d)(10) of this section) does NOT apply to the amount of a distribution paid in the form of an annual benefit that - (i) Does not decrease during the life of the participant, or, in the case of a QPSA, the life of the participant's spouse"

So just what benefits (besides a lump sum and an annuity certian without any life provision) are subject to 417(e)(3)?

Is 10C&C subject to 417(e)(3)?

What about 50% J&S with 120 monthly payments certain?

How does HIPAA affect an employer's drug testing policy?

Any thoughts would be greatly appreciated!

crs

If one is not eligible to make deductible IRA contributions due to 401(k) plan active participation rules, can one still make a $ 500 catch-up contribution to a deductible IRA? to a Roth IRA?

There was an article in the February 3, 2003 issue of Pensions & Investments (p. 1) about the SEC intending to challenge companies with DB plans that assume long term rates of return of 9% or higher. The story said SEC associate chief accountant Todd Hardiman said in a speech to accounting professionals that the action is prompted by investor concerns about companies using articifically high return assumptions on their pension assets.

Hardiman said in his speech that the SEC arrived at the 9% figure by examining historical returns on large cap comestic stocks and corporate bonds between 1926 and the first three quarters of 2002. In that period, stocks have earned avarge returns of 10% and bonds, 6%. The article says, as SEC officials review annual corporate filings over the next few months, they will check whether the rates of return companies assume on their pension assets are consistent with the historical compound average returns on portfolios with similar asset allocations. This reference to Hardiman's speech is all I have seen on this, haven't seen anything official from the SEC. Has anyone seen any further details on the SEC position or anything official from the SEC?

When Participant A died, her/his beneficiaries were his/her children, B and C, equally. However, the plan paid the full account balance, net of taxes to B. How should the plan correct this situation, especially if B refuses to communicate to plan representatives and refuses to repay one-half of the net amount distributed?

Anyone know if it is possible to make a report that shows participants over age XX and/or account balance greater than $XXX,XXX? I am wanting to do this at a global level.