We have a textbook case of an ASG between a Doctor and a medical organization with a calendar year plan. For this situation, if the Doctor gives up all ownership in the medical organization the ASG will cease to exist. My question is if the Doctor no longer has ownership, say as of October 1st, does the Doctor have to wait until January 1st to set up his own plan, or can it be done right away? If right away, can the plan encompass the entire year, or only the period subsequent to the ownership change?

In information published by the DOL, it seems that the payment of investment advisory fees with plan assets is o.k. However, what if a participant goes out on his own, hires an investment advisor to assist with his investments in his 401(k)? This plan is a participant directed 401(k) where all employees use the same 21 funds. The employee feels overwhelmed and has hired a personal investment advisor to review his 401(k) account and provide investment advice for a fee. All plan participants have this same opportunity to use an outside investment advisor. Can the participant ask that the fees associated with this be paid from his account balance? In other words, could the investment advisor fees be paid from his account when this is done on an individual basis, and not an employer initiated/plan basis?

A profit sharing plan's assets are in investments that are not easily convertible into cash. The plan must distribute a former participant's $25,000 vested benefit to him within the next 30 days. The plan's regular discretionary PSP contribution for the current year will be $100,000.

My Question:

Can the employer (rather than the plan), directly pay the former participant the $ 25,000 ? .... Or must the $25,000 be paid directly from plan assets?

I would think that the employer could give the former participant an employer check for $25,000 and then the employer could deposit $75,000 to the plan (but employer would get credit for a $100,000 contribution, rather than just $75,000).

1) Has anyone found an IRA custodian that is willing to enter into an agreement that meets Rev-Rul 92-76.

2) If so, has you felt comfortable using an IRA as a vehicle without getting a PLR that this does not "blow up" the IRA because it is posted as security. Or, have the prior PLRs given you the requisite level of comfort.?

This client would like to set-up a SEP for his business, except that he has leased employees. The leased employees are covered under a retirement plan. He believes it is a 401K.

The IRS code says that he can't exclude all employees and meet the eligibilty test.

What options does he have? Did I miss something?:confused:

I have a situation where a controlled group member is going out of business ("A") and another member ("B") must provide continuation coverage for the terminated employees of A. How do you handle the situation when the insurance company of B will not (or says they will not) provide the continuation coverage for the employees of A stating that the A employees are not covered under B's plan, therefore the carrier does not have to provide A's employees with coverage? What legal authority states that the insurance company must offer this coverage for the employees of A?

If the nondiscrimination requirements are violated and correction is not an option because it would be too expensive, what happens to the one EE who has been making contributions to a TDA for five years? Do we terminate the plan? How?

We have a client who has deposited the profit sharing contributions after the filing deadline of the corporate return (including extensions) for the past 3 years. CPA is reluctant to file amended corporate returns. It does not seem clear if a 5330 is necessary for the late deposits since the deposits are not required. If a 5330 is required, what type of tax/penalty would this be classified as? Do we amend the last 3 valuations to show the actual deposits made and let the CPA worry about his audit liability? Any help is appreciated.

A db plan pays lump sums calculated on the greater of the plan's actuarial equivalence factors and the 417e interest and mortality. Is this the proper way to calculate most valuable benefit accrual rate:

Acc Ben = 1000 at 12/31/02

AE lump sum = 50,000

417e lump sum = 55,000

AB as subsidized by 417e = 1100

Substitute the 1100 subsidized accrued benefit for the normal accrued in the usual calculation of the mvar.

It is my understanding that employees meeting the eligibility requirements in SIMPLE-IRA plan do not actually enter the Plan until January 1 (assuming IRS 5304-SIMPLE document). For example, if eligiblity requirements are $5,000 in a prior year, Employee hired 12/01/01 earns $1,000 during 2001, from 01/01/02 thru 05/31/02 earns $5,000. Employee would enter 01/01/03, not any earlier. Is this a correct understanding?

Only possible mid-year entries I see (again assuming IRS 5304-SIMPLE) are rehires, union to nonunion or if there are no eligibility requirements new hires could pick up deferrals as provided in the document. Am I missing anything?

Thanks in advance for any guidance.

Employees who participate in a NQDCP get the benefit of the "special timing" rule in Code Section 3121. My reading of the rules for non-employees/directors is that they do not get the benefit of the "special timing rule" and Social Security/SECA taxes are due at the time payments are made from the plan, regardless of when services are performed. Does anyone agree/disagree?

Thanks.

This client is a non-profit entity funded by private donations and government grants,so money is always tight. They would like to freeze benefits in order to minimize funding requirements. They are also concerned with needing an audit once they cross the 100 participant threshold. The DREC will be a concern too.

Can the plan be amended to freeze both benefits and participation?

How do you modify your funding method to take into account mandatory employee contributions? It's been so long since I worked on a contributory DB plan that I can't remember how to handle it.

Thanks for any help you may provide.

I am trying to understand the computation involved in a regular cross-tested plan versus a cross-tested plan that is imputing disparity. Can anyone explain this to me? I can get the computer to do it but I want to understand this additional concept.

Basically I want to know how the EBAR is calculated differently with imputed disparity.

Our office has recently had quite a few second requests from the DOL on 2000 tax form inquiries.

We received most of the initial inquiries in early summer (which we answered) and are now receiving second requests on the very same questions again!

Is anyone else experiencing this? It is very frustrating and it wastes time!

can someone tell me where in the code it tells the timing of correcting (in this case, removing) excess annual additions (415 violations)?

Pursuant to an asset purchase agreement, seller agreed to amend its plan to provide that for purposes of the early retirement benefit (which requires 55/10), and the early retirement subsidy (if retire on or after 55) it will count service with the buyer. In the purchase agreement buyer agreed to pay for the incremental cost of counting such service. Buyer is now reneging on its promise to pay for these benefits and therefore seller wants to amend its plan so that it no longer will count service with the buyer. Is this permissible? I don't think it would work with respect to any transferred employee who has been receiving service credit since the time of the transaction and now has 10 years. Could it apply to someone who as of now does not have 10 years? Any argument for mistake of fact or ancillary benefits? Thanks!

How long is a spousal consent valid?

Does the spouse's signature on a distribution become stale after 90 days as does a participant's signature?

Sorry for the basic nature of this question. I did a search and did not find anything about it....

Guy is having a down year and his DB contribution will exceed his Schedule C income.

Is his deduction limited to his Schedule C income?

Is the balance deductible next year in addition to whatever is calculated as the required amount for next year?

Is this in 412 somewhere that I can't find?

Thank you

Can a 501©(3) entity violate 403(B)(12)(A)(ii) nondiscrimination where only elective deferrals are available through the plan? If so, would offering only one election (whereby only one HCE elected to contribute) in five plan years violate nondiscrimination? What would be the consequences?