I have a MPP plan that has a fiscal year end. Currently the plan does not have employment on the last day - 1,000 hours provision in order to receive a contribution. If I amend the plan before the end of the fiscal year to add this provision, can I reduce the funding in the MPP to zero so that their is no funding requirement for the MPP for the 2002 plan year, and then merge the MPP into the PSP for the new plan year?

I have a situation where a plan covered by the PBGC is terminating. All along the two 50% owners have deposited their "share" of the contribution each year into an account that they direct as trustees separately.

Upon termination the assets of the plan will be less than the benefit liabilities, so the two majority owners will waive benefits. My question is would it be permissible to have them agree to waive benefits so that each owner ends up with the value in his respective account?

A client works for Company A. The client also is 100% owner of Company B, which owns 2.5% of Company A. The client receives W2 comp from both companies. The W2 comp from Company B originally comes from Company A. Neither of the two companies are service organizations. Is this a Controlled Group or ASG??? If so, why and what would need to be done to make it not a CG or ASG?? Thanks.

Under teh new bonding rules, if non-qualifying assets exceed 5% of the Trust and are in excess of $500,000 (actually over $1,000,000) does the maximum bonding requirement of $500,000 cap the bond or is a $1,000,000 bond required?

Is there a problem getting this issued by a carrier since there was/is this statutory maximum.

Thanks -

I have a cross tested plan that has two active participants and two inactive participants. The inactives are still employed with less than l,000 hours. They get a 3% top heavy minimum benefit only. Do I include them in the cross testing.

does anyone know whether there is a chance that the service will extend the deadline for prototype plans to beyond 12/31/02.

A profit sharing plan is deemed to be top heavy for 2001. The plan is strictly profit sharing - no deferral provisions.

Two employees who had met eligibility requirements in 2000 (1,000 hours, age 21), worked fewer than 1,000 hours in 2001. They are not terminated.

Because they had met eligibility requirements in a prior plan year, must they receive a top heavy minimum for 2001?

My confusion lies in the wording I memorized a few years back for the C2-DC: "Those non-key employees who are participants in a 401(k) plan and who are employed on the last day of the plan year must receive a top heavy minimum."

This plan has no 401(k) provisions, so, naturally, I am probably reading too much into the rule, but I want to make sure I do right.

By the way, if these employees must receive the top heavy minimum, I am assuming the money must be deposited at the trust by September 15?

I am preparing to take the DB exam this fall.

I am waiting until the last minute to prepare, and will probably be overwhelmed because I am not giving myself enough time to really absorb the information. Is this column still being moderated? I would like to dig up as many cramming resources as I can.

Thanks.

Is the wife of a sole prop. eligible to participate in a Section 125 Plan? She receives a W-2 each year.

Thanks, Joe

I have a situation where a client contributed more than the amount deductible last year and deducted that contribution on the tax return. My question is for 404 purposes is the excess considered a nondeductible contribution for the next year?

When I think of a nondeductible contribution, I think of a contribution that is in the trust but not yet deducted. In this case the contribution is in the trust and is deducted, although it should not have been.

I think the answer is that the tax return should be amended, or as the actuary I should assume it will be amended, to revise the deduction, and that I should indeed treat the excess as a nondeductble. Any thoughts?

The instructions to question 6 of form 5307 [concerning control or affiliated service groups] say to attach a list of the "type(s) of plan(s) each member has". We read this to apply to qualified plans and any IRA type also, such as SEPs. Do you agree, or do you think the question is limited to qualified plans? Thanks for your input.

How is the discrimination test under Section 125(B)(1) and the key employee percentage test under Section 125(B)(2) applied in a setting where an employer has five employees, all of whom are 5% owners?

A client who is an LLC has several adopting employers. There is K-1 income from one of the employers of over $200,000. The K-1s from the other employers all show losses. Do the losses net out of the $200,000 or can i use $0 if there is a negative earned income on the K-1?? Thanks.

Please explain the differences in the following Pensionable

remuneration

> formulas :

>

> 1. Gross equivalent of net base remuneration

> 2. Gross equivalent of regular net-of tax salary

> 3. " " (tax supplement paid by plan)

> 4. regular net compensation( how is this diff from 1 and 2?)

>

> I'm reviewing the current practice/policy of adding a % grossup to

theemployee pension contribution to based upon salary to assist in

reducing theimpact of taxation when the benefit is paid at retirement.

The orgainizational is international with tax exempt status.

:confused:

I have an employee that made $93K last year so he was clasified as an HCE when conducting payroll bi-weekly ADP testing. This July we received a letter saying that our ADP tesing failed becuase they are putting this employee under the NHCE classification since although a participant, he did not make any contribution to the plan.

Are they correct in making this $93k/yr employee a NHCE?

Does anyone know if compensation as defined in 3121(a) includes a per diem paid as taxable wages?

PSP with pooled assets converts to 401(k); all assets liquidated and reinvested per participant direction, with one exception -- promissory note/deed of trust in name of plan.

Investment provider/TPA for 401(k) plan recommends that note be allocated (and reissued in name of) 401(k) account for one of the owners of the plan sponsor.

Five years of repayments remain on the note. Is this kosher? Can the note not be held in a suspense account? Seeking any comments.

I hope this is an easy question:

If someone qualifies under the HIPAA special enrollment periods, to what "health plans" would the enrollment apply?

We offer the following electable plans to employees: Medical, dental, vision, FSA, and voluntary life insurance.

Would the eligible employee/dependent be allowed to enroll in all of these?

Thanks,

Mark

Is the failure to make a money purchase contribution by the required deadline considered to be an extension of credit to the employer and therefore a prohibited transaction?

Notice 2001-56 states that a plan is permitted to provided that the $200,000 compensation limit effective for plan years beginning on or after January 1, 2002 applies to annual compensation for such prior periods used in determining accruals.

The Notice is silent, though, on pre-1994 compensation (pre $150,000 limitation). So the question is, may an employer use a higher pre-94 compensation limit (e.g. 222,000) where the benefit formula would otherwise pick up such a year for inclusion in the average comp, and where the plan is amended to permit retroactive application of the higher 401(a)(17) limits? Thoughts?