Does anyone know the authority that permits a profit sharing allocation for a plan's initial plan year to be based on the full year of compensation (including compensation before the effective date of the plan)? Thank you.

Does anyone know what criteria must be met, or what steps have to be taken, if any, for a company to be set up as a trustee for retirement plans? There doesn't seem to be much, if any, in naming an individual as a trustee. Does the same apply to another company being named trustee?

The situation is that the owner of a small financial company handles most of the investments for the retirement plans that they are involved with. All of the plans currently have individual trustees. I'm not sure where the financial is going with this, but they seem interested in being names as the plan trustee. I'm assuming it will free them up to manage the assets more freely, and possibly be able to charge a trustee fee in doing so. Can you think of any other motives here?

If an employer starts a 2002 401(k) plan and plans on taking advantage of the tax credit that is available for admin costs, can the employer also take a tax deduction for these same fees on the company tax return? This sounds fishy to me, but I wasn't sure how the company tax side of things work. Even before the tax credit, could companies take a deduction for plan expenses paid by the company?

Employer terminated 401(k) Plan, distributed deferrals in November 2000, now employer is distributing profit sharing contributions 2 years later.....is there any legal time frame pertaining to when distributions should be completed??

I've heard alot of good things about roth IRAs, so I recently set on up. However, was confused as to where?? Does one place that offer a Roth IRA differ from another (Am. Express vs. MBNA vs. a Credit Union)?? Also, every piece of literature that mentions a Roth IRA never mentions Add-On Roth IRAs.. Is it to be assumed that every Roth IRA is in fact an Add-on??? Is so, what are so sites about the rates for IRAs.. any help would be appreciated...

Can a participant with a non-spouse beneficiary who is more than 10 years younger elect the 100% joint and survivor annuity? If not, why not?

Will amending a MPPP to a 0% of compensation allocation formula cause participants to be 100% vested? 411(d)(3) discontinuance of contributions appears to only apply to PSP's and not MPPP's. Also, Rev Rul 2002-42 holds that 100% vesting is not required where MPPP merges into a PSP. Big picture seems to be the same...... going from a required contribution to a discretionary contribution. Client has both a MPPP and a PSP. Client wants to freeze the MPPP and just utilize the PSP going forward.

A client decides to change their NQDCP vendor as well as their informal funding arrangement. Client plans to surrender all of their COLI policies put into place by their former NQDCP vendor and use a different funding methodology with their new vendor. Former vendor is trying to incorporate COLI chargebacks into this client's "exit fees". Any guidance on whether former vendor is making a legal violation (of either NASD or California State Insurance Law) or is this action just unprofessional? Assume that no service agreement can be located between client and former vendor.

What is the deadline for adopting a GUST amendment for a terminated plan? I have a situation where the plan's termination date was 2/1/02, the GUST amendment was not done until May '02 and the 5310 filed sometime after that. The plan is a prototype plan that would have had an extended RAP but for the termination. The IRS is saying that the GUST amendment should have been adopted by 2/28/02 and that it is now a non-amender.

Looking at Rev. Proc. 2002-6 (sec. 12.06), it seems to say that a plan can be amended after its termination date in order to get a determination letter. Wouldn't this apply with respect to GUST amendments?

Any help would be appreciated.

Does anyone have any knowledge about qualification of a Puerto Rican plan sponsored by a US Company - ie. IRS determination letter?

Do you have to be a 401(a) qualified plan to take the US deduction for contributions to a PR plan?

We have a situation where a participant is seeking a distribution from his retirement plan. He owes money to another company which is related to the company maintaining the plan. The company would like the check made out to both the man and the company. I think this would violate the antialienation provision... any thoughts or support for my thoughts?

Any guidance on whether or not the freezing of a MPPP (e.g., contribution formula amended to 0% of compensation) triggers full vesting? Despite the forfeitures issue, I had always thought that it would not cause full vesting. I don't know if there's anything in Rev Rul 2002-42 that helps or not......

We are trying to do a checklist for a non-prototype 401(k) profit sharing new comparability plan. Where Corbel's document refers to New Comparability formula. It asks for the disignation of groups: i.e, Group A, Group B, and so on.

Does anyone know what it is that Corbel wants on the Line beside each Group? I am assuming it is the percentage that each group would receive, but not sure if that is right.

Thanks

Marybeth

We have an employer with a new Profit Sharing 401k plan who recently closed out their DB plan. $25,000 in surplus DB assets have been transferred to a holding account in the PS 401k plan to be used towards the PS Employer Match. Does this $25,000 have to remain in a Money Market, or can it be invested in various securities - subject to the market's ups and downs.

A client has a participant who fled the country with a child to avoid prosecution for a crime (child committed, not the partcipant). Obviously the family isn't going to disclose his whereabouts or give an address to send the distribution paperwork. Nor will they even forward the paperwork to the participant themselves as they are distrustful of everybody....

Can a power of attorney be used in these circumstances to obtain the distribution? The balance is over 5k so we can't just pay it out without authorization.

First the controlled group question, now this...I should have stayed in bed today!

Does anyone know if the IRS has issued any further guidance on how they want assets distributed for missing participants? I understand that the 3 main methods are

1) forfeit the balance (my client's document says that can be done for balances under $5,000.)

2) open an IRA (if you can find a bank to take it).

3) Send it to the govenment as 100% withholding.

My client is leaning toward the 100% withholding option, but before I say go ahead, I'm wondering if there's been anything new issued within the past few months.

Company B is 100% owned by Company A and has an employee that left the employ of B and went to work for A. Is that a distributable event? Does it matter if Company A is a foreign based company? Obviously we are not talking about same-desk rule since it's a new job in a different country...But, does the controlled group situation impact this?

Hi,

I dont' recall that the July 2000 proposed loan regs on multiple loans were ever finalized. I seem to recall that until the regs are finalized, employers are supposed to make a good faith effort at compliance (presumubly by operating under the proposed regs).

We have a participant who has already received two loans within the calendar year (which is designated as the 12-month period) but wants a third loan. The client believes that since the regs were never finalized, it is okay to give him the loan.

I just wanted to get an idea of what others out their in the professsion are doing. Are you requiring employers to operate under the proposed regs? And what if the client says, just issue the loan and then 1099-R the participant. This seems like circumventing the regs and almost a prohibited transactions if the loan was never intended to be repaid.

Any thoughts?

Thanks for contributing.

Lori

we have a large medical practice with about 250 employees and 25 physicians. The company currently contributes 8% of pay for all employees. The 8% of pay will support a 20% of pay for the Doctors as a separate class.

However, some Doctors would want to contribute the max for themselves and some will not. Can we structure the HCE groups in single age increments to accomodate this? i.e Groups as follows:

Group 1 All NHCEs 8%

Group 2 HCEs age 35 8%

Group 3 HCEs age 36 20%

Group 4 HCEs age 37 15% etc. etc.

I have an employee who is eligible to participate in the Flexible Spending Plan, but will retire at the end of June. Can this employee participate this year? If yes how would I handle the deductions from the payroll? Would the employee be limited to the amount they can deduct to half the allowable limit of the plan?