Three siblings (brother, sister1 & sister2) each own 33.33% of corp A, brother also owns 100% of corp B. Because attribution does not apply to siblings, I read the brother-sister control group rules to say that A & B are not in the same control group (brother does not have effective control). Any thoughts?

Is an ex-spouse of an over 5% owner who has a balance in the plan considered to be a Key employee?

How are other administrators calculating the minimum required distributions under the new regulations for DB plans that allow for single sum distributions? In the past we have treated the benefit as an account balance and divided the PV by the life expectancy. The new regulations do not allow for this option. In addition, I read something that indicates a single sum is not available to the individual after he retires (i.e. individual reaches 70-1/2, continues to work, continues to accrue, retires at age 75). I wanted to use the new rules for those attaining 70-1/2 in 2002 so that there is not a change next year. Also, I question the transition from the old rules where we used the account balance to the new rules where we cannot use the account balance.

I have 2 companies each with their own 401(k) plan that are a considered to be part of a controlled group of corps. One company in the group has had a significant reduction in force. Do the participants in that compnaies 401(k) plan need to be fully vested even if the controlled group of corporations when combined do NOT have a significant reduction in force?

top heavy 401k plan(12/31/01 pye). the hce/key defers and withdraws the $ before the end of the plan year to avoid the top heavy min requirement to the 3 nhce's/nonkeys. does the plan avoid the top heavy min contrib? is the amount that was deferred included in adp test? --no other amounts were contributed

Facts:

A controlled group of employers...from one group participant A is terminated on 10/1. He is rehired on 10/30 into another member of the controlled group. Since he originally terminated, can he take a distribution, now that he is rehired ? Or since he is rehired and an active employee again, has he lost his right to a distribution?

I have two insurance agents that want to adopt a defined benefit plan. One agent works in a management postion for the agency and participates in the agencies 401(k) plan. In addition, he receives 1099 income, pays social security and medicare, and files a schedule "C". The other agent receives only 1099 income. Can either one of them adopt a defined benefit plan?

Can a partnership with two partners and no employees sponsor a 401(k) Plan?

Our service provider issued a hardship distribution in error from our 401(k) plan. The dollar amount was less than $10,000, and taxes were withheld. The proposed solution is for us to write a letter to the individual requesting return of the funds. The letter will inform the individual that he will need to pay the penalty for early distribution as well as the usual tax if he is unable to return the funds. We do not expect the individual to be able to return the funds.

In addition to the letter to the participant, we are receiving from the service provider a document describing the results of research as to why this mistake occurred and and providing procedures that are being put in place to insure that this mistake does not occur again.

Is this the common practice in the industry?

Where in the prototypedo you specify that a plan is to be cross-tested?

Can hardship withdrawals come out of all sources, including match? If so, is it just from the vested balance?

Is a 204(h) notice necessary (& if so, 15 or 45 days prior?) if a company which is a participating employer of a pension plan sponsored by a controlled group is sold through a stock sale, and the buyer does not have and will not establish a pension plan? The company will be removed as a participating employer through a board vote.

:confused:

Company had an ESOP and 401(k) Plan. The ESOP was "merged" with the 401(k) Plan. All assets of the ESOP are now in the 401(k). However, participants assets coming from the ESOP were not fully vested upon this merger of the Plans. I know that if a Plan is terminated participants become fully vested. Should the company have fully vested paricipant assets that were once in the ESOP but now in the 401(k) Plan?

We have a client who has provided his staff with an array of mutual funds for their PS/401k contributions. The owner of the business wants to invest his share of the contributions in stocks, bonds, etc, but doesn't want to give this option to the staff. In my mind this is discrimatory. Could someone provide me with a cite that will prove this is frowned upon by the IRS? Thanks.

The employer's tax year is the calendar year, the plan year ends 9/30.

I know the EGTRRA provisions increasing the deduction limit to 25% are for tax years beginning after 12/31/01. In this case, the TAX year is 2002.

Can I allocate 25% of compensation for the plan year ending 9/30/02 on compensation from 10/1/01-9/30/02? I'm thinking I can deduct 25% in 2002 but it might have to be on 2002 compensation.

Or do I have to wait until 9/30/03 plan year to increase to 25%?

Thanks.

Michele

I have a calendar year Profit Sharing Plan that added a Safe Harbor 401(k) feature with a 3% nonelective contribution on 7/21/02. The employer was provided with the Safe Harbor notice, but I'm not sure that the employees ever got a copy. I am sure that they were never given election forms to defer, and no deferrals have been deducted to date. What happens now? Neither myself nor any of my colleagues have come across this situation!

Where is a good source to get the Uniform table for RMD's?

Thanks.

Pls help...I am in default of a 401k loan because of an employer/sponsor administrative error. What are my options? I have been making payments since 9/17/97 and am still making payments on a 54 month loan. I don't know where my money has gone nor do they.

I have a new client who has had his Qualified Plan Trust take loans against policies owned by the Trust. The loan proceeds were then invested by the Trustee in other assets. It seems to me there may be two problems: First, is there an excise tax for the income generated from this leveraged asset of the plan, and Secondly is there a prohibited transaction associated with this borrowing? Any Thoughts?

IRA holder names his son as the beneficiary under his IRA and dies after his RBD. Now it's an inherited IRA and the son elects to take distributions over his own life expectancy. The son names his wife as his beneficiary. He dies. His spouse thinks she can roll the IRA over to her own name, which can't be done unless I'm way off base.

However, she does need to continue distributions.

Does she continue to take them over her deceased husband's life expectancy?

Does she take them over her own life expectancy?

Does the 5 year rule come into play? Or none of the above.