I have a potential client (doctors) that want to do a DB, but the younger doctors are not happy. Does anyone have any good design tips to satisfy the young doctors (qualified or non-qualified)? Thanks, I know this is a very general question but I wondered if there was an easy answer out there.

I had a client recently ask me if they could allow their "good" contractors to share in past service increases. It smells bad to me, but I can't put my finger on why.

For example:

Ted is a union member and participant for 15 years. Ted leaves the union and takes a job as a "general electrician" at the local hospital. A non-union position. Ted's benefit is frozen, based his YOS and the multiplier in effect when he left.

Damion is a union member and participant for 15 years. Damion leaves to become a contractor. Damion hires non-union guys and is therefore a "bad" contractor. Damion's benefit is also frozen, based his YOS and the multiplier in effect when he left.

Bill is a union member and participant for 15 years. Bill leaves to become a contractor. Bill hires union guys and is therefore a "good" contractor. Bill's benefit is also frozen, based his YOS and the multiplier in effect, but if the pension multiplier increases at some point in the future, Bill would get the increase on his 15 YOS.

Also note that Bill is also permitted to participate in the union plan as an active participate if he wants. He can make contributions for himself, as well as his other employees, but this would not be required.

My thoughts ranged from general labor issues to the fact that the contractors would be HCE (>5% owners) who would not be covered by the bargaining agreement who are the sole beneficiaries of the amendment. Doesn't this discriminate against other NHCE terminated vested participants? 1.401(a)(4)-5

I looking for a reasons other than "it doesn't smell right".

For some reason, my Crystal Report isn't showing my Relius data. I'm very new to Crystal and am not sure how to re-establish my link.

I am logged in and when I "browse field data" I see my info but when I "preview" there's no data.

What am I missing?

TIA

Heather

A COBRA participant is hired by a small employer who does not have health insurance but will pay the COBRA premiums. If the new employer puts in an health FSA or HRA would that terminate the COBRA elgibility because the participant is eligible for a "group health" plan?

This always confuses everyone!!

IRS Notice 89-32 and Form 1099-R instructions are clear that if you distribute a loss on a 402(g) excess deferral that the taxpayer may include the loss on Line 21 of Form 1040.

Example: $1000 excess deferral, $100 loss, check for $900. Tax report $1000 as taxable in 1099-R and inform the taxpayer about the loss in a letter or as an *in the blank box on the 1099-R.

How are you handling ADP/ACP excesses? Does the taxpayer eat the loss, as they would do with a regular distribution? I am having a problem with not allowing the loss reduction on ADP excess (K) contributions where the IRS allows it for excess (K) deferrals.

Example: $2,000 ADP excess contribution, $200 loss. Would you tax report like the excess deferral - $2,000 taxable or $1800??

I'm assuming the latter.

Thanks!:confused: :confused:

In the midst of amending and restating and ran across a recent new client who's current plan has a four-tier allocation formula. We use Corbel V-S language and a four-tier allocation formula is not provided for in their V-S language. I assume the super integrated formula in Corbel's V-S would be the closest I could get to the four-tier formula. Would it just be matter of working with the numbers in the super integrated formula to try to get them to the same place allocation-wise as the four tier formula? Also, from an allocation perspective, would there be any advantage to using Corbel's V-S document, but amending the allocation formula to provide for a four tier formula and submitting the plan to the IRS for a determination letter? Thanks for your help....

In the midst of amending and restating and ran across a recent new client who's current plan has a four-tier allocation formula. We use Corbel V-S language and a four-tier allocation formula is not provided for in their V-S language. I assume the super integrated formula in Corbel's V-S would be the closest I could get to the four-tier formula. Would it just be matter of working with the numbers in the super integrated formula to try to get them to the same place allocation-wise as the four tier formula? Also, from an allocation perspective, would there be any advantage to using Corbel's V-S document, but amending the allocation formula to provide for a four tier formula and submitting the plan to the IRS for a determination letter? Thanks for your help....

Client has a Safe Harbor plan, using the 3% comp formula. Plan participant terminated in October. Severance pay will be paid to him through 12/31 and be included in W-2 earnings. Is the employer responsible for making the 3% on the severance pay received from October-December? Thanks in advance!

We have a client who has a 20 employees. The company has done very well so they wish to adopt a floor-offset DB. They already have a salary deferral only 401(k) that has been active for all of 2002. Since the owner (only key employee) will have high benefits in the DB, all plans will be top heavy for 2002.

Under their current salary deferral only 401(k) employees are eligible after 3 months. Therefore they have 10 eligible participants.

Suppose they terminate the current 401(k) prior to year end and adopt a new 401(k) profit sharing plan effective for all of 2002. Furthermore, suppose only 5 of the 10 current participants will be eligible for the new plan (this because the new plan has a 1-yr elig requirement). Also, only 5 of the 10 will be eligible for the DB. A 5% top heavy minimum will be provided in the new 401(k) Profit Sharing Plan. Are we required to provide the top heavy minimum to just the 5 that are eligible for the new plans or all 10?

Thanks

Client has already set-up a salary reduction 403(B) plan for its employees. Client would like to add a component whereby it contributes a flat dollar amount on behalf of all employees (not just employees who elect to contribute). Is this permissible or does client have to contribute based on percentage of salary? Can employer retain discretion to determine contribution from year to year? Are there alternatives outside the 403(B) plan to consider?

If a BOLI provider was designing a defined benefit plan, is there any reason to recommend the use of a variable universal policy containing fixed income investments over universal?

(Other than the carrier's universal policy is not competitively priced)

Hi

I can't believe I've never had to think about this before, but here's my situation...

I have a participant with a 402(g) excess for the 2002 calendar year. The plan's year is 7/1 - 6/30. I am tryring to decide whether and when I might have a match for free problem.

I think the question comes down to whether the contributions which are to be refunded are determined on a FIFO basis as ADP excess amounts are. Obviously, my preference is to decide that the 402(g) excess amounts are from the contributions made after 7/1/02. I would prefer to avoid revising ADP/ACP tests that have already been completed for 6/30/02.

Anyone have any suggestions about the plan year that I need to look for match for free in?

Thanks

Can someone point me to some cites that say you can now eliminate joint and survivor annuities as a form of distribution in a Profit Sharing Plan? Thanks.

Does anyone know if a list of custodians exists that will set up IRA rollovers for missing participants without their signature? We have a company that is out of biz - all but 8 folks are paid out. Balances are over $5k so can't force pay. They have not responded to numerous mailings. Attorney for company wants to get all assets paid out by year-end & document allows for IRA rollover option. Thanks!

A participant's last day worked was December 31, 2001. The participant was age 73 and not a 5% owner. Did this person "retire" on December 31, 2001 with a required beginning date of April 1, 2002 or did she "retire" on January 1, 2002 with a required beginning date of April 1, 2003.

I think the former, but have found nothing in the regulations that specifies either way. The regulations generally say "retired during 1999" or some such. I'm about to research private letter rulings, but I would be very grateful if anyone can provide an answer.

We have an employee whose wife quit work over a year ago. He elects the "non-payroll" preium option and includes the payment of her COBRA insurance premiums on his cafeteria plan. She will no longer be qualified for COBRA some time during 2003, and he wants to add spouse coverage to our company's insurance plan. Can he make that mid-year change in his cafeteria plan due to his spouse becoming ineligible for COBRA?

I have primarily worked with DB plan terminations, so I am having some difficulty understanding how DC plans terminate. Once the plan says no more accruals, how do they go from there to actually being able to shut dwon the plan -- I guess I am asking how they get everything distributed. Or do they? Without PBGC involved, I am unclear how the accounts are closed out. Can participant accounts be distributed without consent, and if so, in what form?

Any reason why a single plan sponser with no ee's can't receive the tax credit for starting a new plan in 2002?

I am a self employed real estate agent with a Net Schedule C income of $500,000. I have a SEP IRA plan and hire my employees though Kelly Staffing. My employees have a 401k plan available to them through Kelly and I have matched them up to $5000 of deferrals. I know I have to cover them under my SEP plan but can I reduce the amount I have to contribute for them based on what I matched them in the 401k? I want to make a 40k contribution for myself (20%X200k). I have given an employee a 10% match so a 20% contribution would overcontribute them. What should I do?

I'm sure this analysis and discussin is out there somewhere, but I'm too busy at the moment to locate it. Can anyone direct me to a succinct discussion of what changes, if any, must be made to plain vanilla Section 125 plans (with DCAP/FSA and Premium-Pay Components) by year end.

Thanks!!