We have a takeover plan where the previous admin. did some pojections for 2002. I assume plan has been updated for Gust/Egtrra.

Integrated profit sharing plan with two employees. 200K for one and 20k for the other. 25% would be 55,000. They allocated 40k to the 200k emloyee and the rest went to the other. This would represent 75% allocation. Is this right? My feeling is the deductibility is correct, but not sure if you can get away with the allocation if it is an intrgrated plan. The 2 ee's are husband and wife.

Thanks

We have a company handling our 401K for our business. A little over a year ago they informed us that two of the employees (owners and employees of the corporation) fit the category of highly compensated and shouldn't have been putting in as much money as they did for the past three years. Money was refunded and penalities were paid. Now another situation has arisen that they never made us aware of. We have several employees who no longer work for us but they are still appearing on our 401K with small amounts of money in their accounts. We don't have any addresses on these past employees but the 401k company is telling us we need to be mailing them reports which include everyone's current salary. Obviously after the first mistake we are leery at accepting at face value what they tell us. I'm hoping someone can give us a second opinon. What do we need to send 401K participants?

I have an interesting scenario someone presented me. Can anyone confirm the finding below and what Code site they came from?

If a participant terminates and the actuarial equivalent vested accrued benefit calculated as of the date of termination does not exceed $5,000, the plan administrator will automatically distribute such amount to the terminated participant in a lump sum. Note that it does not look at the "small annuity rule".

If a terminated participant elects to withdraw employee contributions plus interest, participant and spousal consent is required if the present value of the TOTAL benefit (employer and employee) is greater than $5,000.

[Okay so far.]

After the terminated participant withdraws employee contributions, if the amount remaining is less than $100 per month a lump sum payment will be made in accordance with the small annuity rule. Note that before you get to the small annuity rule, the remaining benefit must be less than $100 per month. Thus, if it is greater than $100 per month, but the present value is less than $5,000, you DO NOT go to the small annuity rule. If the remaining benefit is less than $100, the small annuity rule provides that the plan administrator will pay the amount in a lump sum PROVIDED that participant and spousal consent is required if the present value is greater than $5,000. Thus, if you are in the small annuity rule (i.e. less than $100 per month) but the present value is more than $5,000 and the participant and spouse will not consent, the lump sum value cannot be paid out.

[Do you concur? What is the Code site? Couldn't find anything in 1.411(a) or 1.417(e).]

Thanks!

We're using the Corbel/Relius volume submitter plans for our GUST restaements.Corbel includes 94GAR adoption language in their EGTRRA amendment. The Corbel RAP expires 4/30/03, but in reading Rev. Rul. 2001-62 it looks like our db plans must adopt 94GAR by 12/31/02. This means that we either have to get our db GUST/EGTRRA amendments done by 12/31/02, or have our db plans adopt the appropriate 2001-62 model amendment by 12/31/02. Am I reading this correctly?

An employee was employed by one company (Co. A) in a control group. Co. A sponsored a 401(k) plan into which the employee made contributions.

The employee terminated employment at Co. A, moved far away and began working for Co. B, another company in the control group. Co. B had its own employer-sponsored 401(k) plan, separate and apart from the plan sponsored by Co. A.

Employee wants to roll his 401(k) assets from the Co. A sponsored plan into the 401(k) plan sponsored by Co. B. Employee is doing the same type of work.

I believe that the employee may roll his 401(k) assets from the Co. A plan into the Co. B plan. Co. A's plan administrator says "no".

Therefore:

1) I would appreciate learning the truth. If I'm wrong, I can take it.

2)Does anyone have an appropriate cite?

Thank you

Do Florida Constitutional Provisons or State Statue forbid the reduction of future defined benefit plan benefits. For example (1)reducing future benefit accruals rates from a current 2.25% to a 2.00% per year of service or (2) increasing the early retirement reduction from 3% to 6%?

We currently have a SARSEP at my business. We would like to allow the HCEs to defer more money into their accounts. What type of plan should we be considering? We currently are 50% owner in another company and total # of employees is 20 with approx $1 million in payroll.

Thanks

Does anyone have an opinion as to whether each participating member/employer in a MEWA has to become fully HIPAA privacy compliant with a privacy officer, etc.? Assume that the MEWA becomes fully HIPAA privacy compliant. Assume that the participating employers do not have access to PHI unless they get it from the MEWA. Assume that the employers won't do that unless they are trying to help an employee or beneficiary pursue a claim, and in that instance, a consent will be obtained from the person whose claim is at issue. Does each employer have to adopt a privacy policy, appoint a privacy officer, etc., etc. under these circumstances?

Do loan fees have to be included on an SPD?

Thank you.

If Buyer and Seller contractually agree that Buyer will assume the COBRA obligation in an asset deal (and Seller continues to maintain a group health plan), is Buyer obligated to provide the COBRA beneficiaries the EXACT coverage offered under Seller's plan or does Buyer satisfy the COBRA obligation by providing the same coverage Buyer offers its active employees? Also, does Buyer have to provide credit for deductibles and other limits?

This is short and sweet (I think).

What is the deadline for restating a standardized prototype document with a prototype document of the same organization (brokerage house) when the opinion letter (dated 10/25/01)says 'since you did not submit by 12/31/00, the remedial amendment extension period is not applicable.

The date of the opinion letter is 10/25/01. We just now received the restatement package from the broker.

I am confused and very worried.

:confused:

Is it discrimination, if an employer pays 100% of the premium for dependent spouses who are not eligible for coverage under their employer and pay nothing for dependent spouses who are eligible for coverage under their employer but choose not to enroll.

Thanks, Cindy

As a 401(k) plan record keeper we have been asked to design and implement "true-up contribution" functionality to a 401(k) plan. The true-up contributions are intended to ensure that all participants in the 401(k) plan get the most of their company match by determining if the average percentage that an associate contributed to the plan would have resulted in earning a larger company match. If that is the case, the employer will make up the difference in the form of a "true-up contribution."

I would like to know what other recordkeepers are doing in terms of applying negative and positive adjustments (i.e. hours and deferral adjustments) sent in by the employer to make a participant either match eligible or match ineligible for true-up contributions. For example, the plan makes participants eligible for company match with the completion of 1,000 hours in a consecutive 12 month period (determined at anniversary date or at the end of the year). If a participant was determined to be match eligible on their anniversary date with 1000 hours of service, and a negative adjustment comes in after the anniversary date with a pay period end date prior to the one year anniversary, and the end result of that adjustment is that the participant really did not have 1000 hours on their anniversary date, the employer wants to make that participant made ineligible for match and remove the money contributed in error. It would also work in the opposite direction for someone who was not match eligible on their anniversary date if they did not have 1000 hours, but a positive adjustment with a pay period end date prior to their anniversary date will make them match eligible. In this scenario the employer would submit make up match contributions.

We are looking for industry trends with regard to applying negative/positive adjustments and determining match eligibility. Do most plan sponsors go by the "once eligible always eligible rule"? Do plan sponsors implement a timeframe for dealing with payroll adjustments (i.e. 6 - 12 months) and after that timeframe they will not rerun true up / match calculations?

I would greatly appreciate any information anyone can provide.

The company I work for needed an audit for the first time this year, and a lot of problems seem to have cropped up here at the last minute. We have "old assets" with an insurance company that appear to be invested in variable annuity contracts. The rest of the assets are with TransAmerica and invested in pooled separate accounts. TransAmerica prepares the 5500. The numbers on the Schedule H reflect the old assets, but they are never mentioned anywhere else in the 5500. Shouldn't I have a Schedule A for these assets? Is the insurance company required to provide me with one? These assets are also not included on the supplementary schedule "Assets Held at Year-end." I was thinking of just typing a line at the bottom of the schedule they did give me. Any thoughts or advice is appreciated.

Is it necessary to file a Schedule A if there were no premiums or commissions paid during a particular year?

We are submitting a Volume Submitter plan for a small profit sharing plan with a 401(k) feature. The profit sharing piece is always a straight percentage across the board. We have always used and passed the Ratio Percentage Test? Am I correct in stating that I do not have to submit the Demos?

I am a single 27 year old who invested $2000 in a Roth IRA last year thru Chase Bank. I opted for an aggressive portfolio of about 8 on a scale of 1 -10.

I just received a recent statement, and it has dropped to $1,563 dollars. I'd like to contribute the max of $3000 this year, but seeing my recent statement is making me think twice. Any advice would be greatly appreciated. Thanks...

I converted my IRA to a Roth in 1998, spreading the distribution over 4 years. However, I did not exclude IRA contributions prior to moving to CA. Here are my questions:

1. Do I just exclude IRA contributions made in another state, and divide by 4?

2. What about 401K contributions that were rolled over into an IRA while working in another state?

3. Do I need to file amended tax returns for 1998, 1999, and 2000? My 2001 CA tax return is due 10/15/02. Can I just deduct the out of state IRA contributions on my 2001 CA tax return instead of filing amended returns?

Thank you

For the plan year 2003, we are going to make two attorneys partners. They will each own exactly 5% and compensation will be al least $150,000. They will not be officers. I needed some clarification on whether they will be considered key employees for 2003 top-heavy testing. Is it 5% or more than 5% ownership that makes them key. If they own at least 1% but make more than a certain amount are they still considered key. Any other clarificaition will be greatly appreciated. Thanks

Scenario a) two participants inadvertently did not receive an allocation of the employer's profit sharing contribution, and it is now well past the extended due date of the employer's tax return.

I used to think this was a deemed loan to the Plan. Now I'm reading that employer contributions are not plan assets until contributed. Rather, the Plan document is enforceable as a contract, so the employer can be forced to contribute, but the foregone contributions are not plan assets. If the foregone contribution is not a plan asset, then no prohibitted transaction can exist, right? Therefore, in this scenario the excluded participants would definitely get the foregone contribution plus earnings, but there would not be a prohibitted transaction. Am I right on this?

Scenario b) Same as above, except the entire profit sharing contribution was remitted three months after the extended due date of the employer's tax return. Prohibitted transaction? Based on above I'd say no...

There appears to be no guidance whatever on this published! Please provide references if possible!!