As I understand it, to use EGTRA for the 2002 plan year you must amend for EGTRA by the last day of the plan year. The latest the document could be amended is Septmeber 30, 2003 for all plan years.

I have some questions:

A plan that does not amend in the 2002 plan year; does that mean a participant could not defer $11,000 in that plan year? Does it mean a participant could not receive contributions equal to 100% of compensation, or $40,000?

If not, what exactly does it mean to not have a signed amendment by the last day of the 2002 plan year?

Will there also be a restatement of all documents for EGTRA?

In reading the instructions to the Form 5500-EZ, they indicate that a Form 5500-EZ has to be filed in the year in which the plan liquidates, even if it has been under $100,000 for all prior years.

My question: Do you have to file a Form 5500-EZ for the initial plan year, if assets are less than $100,000? I think you don't, but I have a conflicting opinion.

Thanks for any responses.

I have tried to research this question, but have not been able to find anything definitive.

When a partially vested terminated participant is rehired, they must be given the "opportunity" to pay back the employer portion of the benefit they received so that the forfeiture account can be reinstated. The question is, what constitutes "opportunity"? Is the fact that the plan allows for the pay back sufficient "opportunity"? Is mention of the option in the SPD considered sufficient "opportunity"? Must the participant be given some sort of notice upon rehire to have the "opportunity"? Any help or cites would be greatly appreciated!

None of the TPAs I've worked for have ever done a notice about this but it seems to me that participants don't have the "opportunity" if they don't know about it?!?!?

Thanks!

Can I as a sole proprieter cotnribute fully to my SEP-IRA (25% of the net income) and draw salary for myself and spouse upto 12K and move most of it to the non-integrated 401(K) - assuming 11K 401K limit max for 2002.

Thanks

my employer is thinking about starting an FSA. I have little experience dealing with cafeteria plans. i know this will require a plan document, but what other concerns should I have? who handles the admin, recordkeeping of plan contributions? the employer? we are looking to include co-payments for office visits under the medical plan, dental, dependant care, vision, disability insurance, perscription costs...are all of these allowed? is there a maximum on claims? or a maximum on contributions to the plan?

anything else i am missing?

any help is much appreciated....thanks

I am brain-fried this week so I want to make sure my thinking is correct. I have a safe harbor plan that wants to change the eligibility for deferrals to immediate entry yet keep the year of service rule for the safe harbor match. I realize I have to perform the ADP test on the disaggregated portion for the otherwise excudables. My question involves the HCE. If I never have a newly hired person that is more than a 5% owner then I will never have an HCE for the disaggregated portion. Am I thinking right?

May a distribution from a qualified plan be rolled into a SEP IRA?

I have a question regarding the gateway test...first time using it this year...EBIA manual states, "the minimum allocation need not be provided to all NHCEs, just those eligible for the allocation under the plan." 1.401(a)(4)-8(B)(1)(iv)(A) is not clear to me.

Specifically, I have a plan that is looking to contribute a nonelective contribution on behalf of a group of employees that is losing a DB benefit. It will not pass on a contribution basis. Do only those NHCEs in this group need to have the "1/3 of highest HCE rate" allocation?

Aside from returning the money back to employees, what can an employer do with forfeitures that exceed admin expenses for the year?

I was told by our TPA that you can apply them to future anticipated admin expenses.

The problem is that I just received a call from our general accounting department and they have 4 years of forfeitures that exceed admin expenses. Of course, after 4 years, they want to clear them today.

Any help is appreciated!

An employee currently has health insurance coverage for herself and her spouse through her employer and pays the premiums through the cafeteria plan. The rate increases just came through and she finds that it will now be cheaper to have her spouse cover himself through his own employer's plan. The problem is that open enrollment for him to get into employers plan is not for a couple of months. He is not a new employee and has met eligibility in the past but declined participation. If employee chooses to keep coverage for both for the next couple of months, can she then drop coverage for her husband (and associated premiums) under a qualifying event.

Any help (quickly!) would be most appreciated.

Thanks

Client's PSP was terminated on September 30, 2002 and submitted to the IRS via Form 5310 shortly thereafter. IRS has now requested additional information including the "EGTRRA Amendment since the plan is terminating in 2002." Two questions: 1) Isn't the EGTRRA Amendment only required in order to take advantage of the new limits (annual addition, comp limit...)? 2) If no EGTRRA Amendment had been adopted prior to 12/31/02, will the fact that the IRS is requesting it pursuant to the plan termination have an effect on that deadline? No contribution will be made for the 2002 plan year. Also, I'm going to take a look at the current EGTRRA Amendment text to see if there are any changes that are required to be adopted..... Thanks for your help.

Client's PSP was terminated on September 30, 2002 and submitted to the IRS via Form 5310 shortly thereafter. IRS has now requested additional information including the "EGTRRA Amendment since the plan is terminating in 2002." Two questions: 1) Isn't the EGTRRA Amendment only required in order to take advantage of the new limits (annual addition, comp limit...)? 2) If no EGTRRA Amendment had been adopted prior to 12/31/02, will the fact that the IRS is requesting it pursuant to the plan termination have an effect on that deadline? No contribution will be made for the 2002 plan year. Also, I'm going to take a look at the current EGTRRA Amendment text to see if there are any changes that are required to be adopted..... Thanks for your help.

Is it possible to retroactively correct a situation where pick up contributions should have been withheld effective with a person's date of hire and the muncipality failed to do so? [Date of hire = 6/2002]. The town would like to correct the error and is looking for assistance. Participation in the pension plan is required as a condition of employment. Thanks.

I have used an attachment to make this small plan more readable. After distilling all the help on this board, see if I have come up with a way for a small doctor's plan to allow spouse 100% 401k deferral using restructuring.

Thanks!

I understand that you can withdraw up to $10,000 out of your Roth IRA to be used as the downpayment of your first home after we have opened the account for five years to be exempt from the penalty. Can both my husband and I do this and have $20,000 to use towards the downpayment or only one of us can?

And do we have to eventually pay this $10,000 back into the Roth IRA account?

Thanks!

Can someone comment on how a "Section 501©(2) corporation" (i.e., a corporation which is tax exempt under Code section 501©(2)) operates. I've recently run across a situation where the Plan apparently owns shares of a 501©(2) corporation, which in turn holds title to real property. As near as I can tell, the corporation collects rents, pay expenses, and remits the balance to the plan. The Plan is proposing to distribute the participant's interest (you guessed it, the participant is a doctor) in the form of a direct rollover to an IRA. I'm wondering should the Plan distribute the shares of the corporation to the IRA, or should the Plan dissolve the corporation, take title to the property, and distribute the property? Are there relative advantages to holding title to real property in this manner that I should consider? Any ideas?? Is there a "Section 501©(2)" expert out there?

Thanks.

Help anyone- If a person dies and states his beneficiary on his 401k, does a common law spouse have any right to the account if the common law spouse is not the named beneficiary?

Please advise as soon as possible. Thank you!

I added to a SIMPLE IRA for 2002 but should not have because a SEP is much more appropriate for my situation. Can I "undo" my $7,000 of employee SIMPLE contributions without penalties and taxes? The $7,000 is now worth about $6,500 and I haven't yet filed my 2002 tax return. If yes, how is this handled?

Currently my company uses our accounting software for performing ACH debits to some of our clients' accounts in order to fund reimbursements for Flex claims disbursements. Unfortunately, this software is limited in that I can only debit one client account a day. Is there another software program available specifically designed to handle debits to multiple accounts in a single 24 hour period? I believe there is an option available directly through our financial institution, but I'm looking for other alternatives. Any advice is greatly appreciated.

Thanks so much.

Does ERISA regulations provide for a minimum loan term of less than 1 year?