I am looking for information about effectivity of IRS imposed changes for pension plans. My 401 k program is not on a calendar year, but begins on Nov 1 and ends on Oct 31. I just received a letter from my benefits department stating I crossed the HCE threshold for the plan year Nov 2001-Oct 2002, and as a result my contributions are limited for the plan year Nov 2002-Oct 2003. I did some searching, and found IRS document IR-2001-115. This document announces an increase in the contribution limit to $11,000 and an increase in the definition of an HCE to $90,000, both effective for the tax year 2002. My plan allowed a maximum contribution of $11,000 for the plan year Nov 2001-Oct 2002. However, my administrator says that the $90,000 limit for HCE will not become effective until the Nov 2002-Oct 2003 plan year, and I cannot resume making full contributions until plan year Nov 2003-Oct 2004 (I barely exceeded $85,000 this year due to a 53 week pay period, and will be below $90,000 for next year). I do not understand how changes with the same IRS effectivity date can be invoked on different years in the company plan. My questions are: (1) is this normal? (2) if so, is this an IRS mandate or a plan administrator's choice? and (3) are there specific IRS documents providing a definitive effectivity?

Thanks in advance.

In a safe harbor 401(k) plan you can allow for hardship distributions from employee deferrals. Are the employer safe harbor contributions restricted from being taken as a hardship WD (similar to QNEC's and QMAC's)?

I have been asked to draft a charter for an administrative committee for a Section 125 Plan. Does anyone have a sample of such a charter they would be willing to share, that I could use as a starting point?

Thanks in advance!

I have a tax-exempt employer setting up a qualified plan. Does the fact that they are a non-profit organization exempt them from the fidelity bond requirement?

We are merging Money Purchase Pension plans with the Profit Sharing plans during 2002 with proper resolutions and adoption agreements to stop accruing benefits. My question is on some the employer will have to make a small 2002 contribution on some since the 60 notice was not processed until early in this year. Since the contribution does not have to be deposited until 2003 can we consider the contribution as transferring with the other assets in 2002 since the MPP plan is closed and do a final 2002 return? Should we have them go on a deposit the funds in 2002 and then transfer? We are trying to avoid having to do returns for 2 years versus one. HELP!

The Scenario:

ER pays 100% of premiums for core benefits for EEs. Benefits are non-taxable medical, dental, vision benefits. Whatever is not used by an employee is put into an FSA for the employee (employees do not receive cash back).

However, each EE has the option of up-grading the core requirements with salary reduction dollars.

Question:

I know that this is not a Section 125 plan if an EE has no option of upgrading the coverage and the unused allocated portion is put into an FSA.

BUT, The question is whether it remains a non-Code Section 125 FSA if EEs can pay premiums to upgrade coverage.

Any assistance will be appreciated.

Does the GUST remedial amendment period extension in Rev. Proc. 2002-73 that was released today have any effect on the EGTRRA good faith and/or Required Minimum Distribution amendment due dates?

http://benefitslink.com/IRS/revproc2002-73.shtml

I just ran my first gateway testing on Relius. Can someone verify for me exactly what the results are telling me. My report says reflectsthe following

Highest HCe Ben 6.50%

1/3 of Highese HC Ben % 2.167

NHCE with Ben % < 2.167 Failed the NHCE Ben % - 0

Test Passed

NHCE Ben % Failing part pof Gateway Test

REquired Min NHCE Ben % - 5.00

NHCE with Ben % < 5.00 - 186

Test Failed

Must pass Min. Allocation Gateway Test or Safe Harbor Minimum Allocation Gateway Tst or both to pass Gateway Test.

Last Line says - PASSED Gateway Test Requirments.

Can someone tell me Did I or Did I Not Pass?

Thanks

One man plan, assets never >$100,000. Plan is terminating end of the year - does a final 5500EZ need to be filed even though a 5500EZ has never been filed?

An employee has medical coverage on herself and her husband.

The husband has just been approved for VA medical care. Would this be considered a qualifying event under Section 125 to allow the employee to drop her husband from current coverage, or must she wait until Open Enrollment (01/01/03)?

I'm preparing a new 457(B) plan for a tax-exempt entity (it qualifies for the top-hat exemption). Should I include the provisions in the new IRS model amendment for the 401(a)(9) regulations regarding minimum required distributions, or do you think it is ok to incorporate the rules by reference? The plan will have only one participant, but I'm thinking that I may need to specifically include the basic provisions of the model amendment (although I may include it as an appendix so it doesn't "junk" up the main plan document). Does anyone else simply incorporate the rules by reference?

Does anyone have any information or websites on "wasting trusts"?

Thanks.

I have a plan that is currently a 2/28 plan year-end.

They will be switching to a 12/31 year-end effective immediately.

What notification, if any, does the plan have to provide to the participants regarding this switch?

Time-frames involved?

Thank you in advance!

I understand that the new regs require the use of 415 compensation for determining the gateway test.

A Plan uses 3401(a) comp in its document, without any adjustments to the definition. Am I correct that that definition satisfies the new regs?

Also, are severance payments part of the definition?

Employees who are part of the Employer's control group but not employed by one of the Plan's participating employers were enrolled in the Plan in error. The employees should have been enrolled in their employer's plan held by a different recordkeeper.What is the best way to move these participant account balances out of the Plan and into the correct plan? This situation seems too far removed from the inclusion of ineligibles based on age and service requirements contemplated by EPCRS so I am wary of applying those principles to this situation.

Can a SEP allow participants to purchase life insurance with either seasoned monies and/or rollover assets?

First, is pre-school fees still reimburseable under Dependent Care Reimbursement Plan?

Second, are fees paid to a school for "kindercare", which is when a child attends kindergarten 1/2 days and then "kindercare" for the other 1/2, reimburseable under Dependent Care Reimbursement Plan?

Thanks.:confused:

My online broker said I could transfer my shares to a non-retirement account. Is this true? If so, can I deduct the loss if I sell the shares from the non - ret acct. Thanks.

I'm concerned. An employee in my company applied for a hardship withdrawal due to eviction reasons and the HR Manager approved it without getting any paperwork from him that proved this hardship. (HRM says the paperwork is "coming" in a few days.)

Aren't we required to have the proof up front before allowing the withdrawal? Can anyone tell me where to find this info?

say an individual is an S corp. no other employees.

if on the individual's 1040 he shows S corp income of say 50,000 and no other compensation.

can the 1120S make a ret plan contribution for that individual (to either a DC plan or a DB plan) and can the individual make a 401-k salary deferral?

thanks ,

gary