I have a 401(k) plan with a custom plan document effective 1/1/2001 (signed 12/13/2000). It has not used the snap-on amendments for MRDs. What amendments (if any) are required for 2002 and 2003?

Are MERP's required to file 5500's? I don't think so (can't find anything in the instructions that indicate that they do), but I haven't worked with them enough to know for sure.

Thanks

Since most of my clients own doctor offices, manufacturing firms, and other small businesses, I'm a little unsure if anything is different for this new case I'm looking at.

A 6 member rock group want to start a 401(k) plan for the group, as well as for the record company that they own. In addition to the 6 band members, there are a few office people, as well as some truck drivers, roadies, ticket agents, and so on. I don't see a problem setting a plan up for this group, but as far as counting hours for eligibility, years of service for vesting, etc., is there a right way to do this? Would elapsed time work best in these situations? I also usually deal with W-2 wages for plan purposes, and I'm curious as to what gets reported as income in a situation like this.

Any thoughts or antedotes are appreciated. Thanks

I have an employee that is asking for specific IRS code language that states that an employer who makes a match, HAS TO PROVIDE THAT MATCH ON A PER PAYPERIOD BASIS. The employee thinks that the company can't choose to make a year-end contribution and require the participant to be employed on the last day of the plan year. Any ideas on where I can find this so-called "code"??

I know that the employer can require hours and last-day rules when it comes to a discretionary match, however, the employee will not take my word for it.

Any help would be appreciated!! Thanks!

Each spouse has different AE periods at their respective employers. Would an election under the later AE qualify as an event to allow the 2003 elections made during the first AE to be dropped? For example, if the later turns out to have better benefits and the couple decides that it would benefit them to be enrolled under the AE of the later plan. Thanks!

:confused:

I have a safe harbor 401(k) plan which is effective 01-01-2002. The first year is a short plan year ending September 30, 2002.

My document dictates the limitation year is the plan year.

For the initial short plan year I have to prorate the 401(a)(17) compensation, but do I prorate $170,000 or $200,000? Do I prorate $35000 or $40,000 for the 415 limit?

When I file the 5500 do I file a 2001 5500 or will I end up filing 2 2002 form 5500's?

I've got a handful of SIMPLE-IRA documents to update. It is my understanding this has to be done by the end of the year. My only real question is the effective date in Article VII; do I back date that to 01/01/02?

I've done a few cash balance proposals, but it's been a little while and i'm still not totally fluent with regards to testing and such. I am working on a proposal for a two owner and 50 or so common law employees to possibly set up a Cash Balance with a PS plan. I have two groups, owners and others, would like opinions as to the best way to test for discrimination regarding the DC and Cash Balance contributions, whether cross testing is best or not. Thanks.

It is my feeling that rate banding should almost never be used with small plans but rather with plans with a minimum of around 20 HCEs and minimum of around 100 employees. I can't find much support for this so I am turning to you for some guidance and/or feedback.

Is their a way to track deceased participants? I recently learned of a large DB plan where the participant died and the son failed to notify the plan of the death. The son continued to receive payments on behalf of the father totalling $25,000. In the same plan, a daughter received $12,000 after her father died and she failed to report the death to the plan. Both were caught by chance. The plan administrator stated that he relies on the honesty of the descendants in reporting their death. This doesn't seem like a prudent practice.

Any comments?

This is a small company with 7 employees. They do not have a group health plan. They want to offer to pay the premium for any employee that has an individual plan. They would pay the premium directly to the insurer upon proof of enrollment.

My question is, in order for this benefit to be non-taxable to the employee (and deductible to the employer), does this company have to have a Section 125 plan in place?

How do the provisions of the Sarbanes-Oxley Act of 2002 affect nonqualified plans? Primarily, I'm concerned about the new reporting requirements under section 16. I have a client who sponsor a nonqualified deferred compensation plan (holds deferrals in excess of 401(k) plan and matching contributions) that allows participants to "suggest" investments in employer stock.

I cannot find clear language helping me determine which reporting rules apply to this plan. Can anyone help?

If a loan was tax reported as a "deemed distribtion", do you need to tax report it again when a distributable event occurs.

Example: Participant defaulted on a loan in 2000, there was no distributable event and the defaulted loan was tax reported as a "deemed distribtion."

The participant did not make any repayments on the loan after the default date.

The participant terminated in 2002 and has left the cash in his account. The loan note can now be foreclosed and the note assets are offset by the distributable event. Do you need to tax report the "actual distribution" of the note? If yes, the 1099-R Box 1 would show the loan default amount and Box 2a would be left blank.

Thanks!

small dental practice

husband is "primary owner" dentist (sole owner currently)

wife is hygenist

new, associate dentist is young & will be buying into the practice over the next few years

staff

how can i get husband and wife in one class so that they each get max $40,000 contribution, associate dentist in his own class

& staff in their own class?

my dilemma is how to get husband and wife into same class & be able to give lower allocation to associate dentist until he has significant ownership.

if i have an "owner" class, it will automatically include wife due to family attribution? can i further distinguish ownership in classifications such as "ownership in excess of X%" or something like that?

staff will always just be "staff" or perhaps "full time staff' and "part time staff".

how does everyone feel about multiple classes, other than just HCE & NHCE, which is what you typically hear about or read about in seminars or publications?

I am trying to discern what the new "core earnings" standard (being promoted by S&P) means with regard to market losses. An article states, "The S&P will exclude from income any gains from a company's pension plan, asset sales or hedging activity." Other similar references also refers to gains but not "gains & losses." Are losses also excluded or are they considered real costs that must be included because the company has to fund shortfalls with cash?

I have just taken over the administration of a 401(k) Plan from a reputable TPA firm. In looking back at last year's work I noticed that the employer was late in remitting some of their 401(k) deferrals. The 5330 was prepared and the excise tax was calculated based on the amount of the late deferrals. I have always calculated the excise tax on the 'use of the money', as if it is a prohibited loan.

I thought it was accepted practice to base the excise tax on the loan theory. Am I missing something?

Thanks in advance.

I am a beneficiary of my father's Roth IRA...can I roll it over into my Roth IRA without a tax consequence, or do I have to pay tax on his money??

Please email me at wgassner@bigfoot.com

Thank you...

Walter:confused:

I understand that submitting prototype plans, either standardized or nonstandardized, for an IRS determination letter is no longer recommended or suggested. But is submitting still the recommended course of action for volume submitter plans?

Company A was a member of a PEO plan since 01-01-2000. They moved out of the PEO in 2002 and started their own plan effective 01-01-2002.

Assuming the PEO operated the plan as a multiple ER plan (although I'm not sure) and for ADP / ACP testing purposes the employer chose prior testing, what NHCE ratio would they use for 2002 - 3% default for new plan or the actual NHCE percents for their 2001 plan year while they were with the PEO?

For top-heavy I assume the new plan is a successor plan and the balances which transfer are in included in the determination of the account balances - correct?

Have you ever seen a benefit structure in which the 401k plan was part of a larger cafeteria plan? The participants can elect to have contributions to go to either. They could have the money go to the 401k plan or to the cafeteria plan. I think there are CODA issues with such a structure. It seems that unless the employee could elect cash, the contribution to the 401k would be an employer non-elective. This, I would think, could cause discrimination issues- as those who elected the 401k would have be considered benefiting and those that elected the cafeteria contribution or cash would be considered as not benefiting. It seems to me the Plan could have coverage issues.

Any insight? Sources? Have you seen anything like this?