We have recently determined that their are approx 100 illegal aliens in our 401k plan. I know that their pre-tax contributions are theirs, but how about any matching contributions? Can these now be forfeited to the plan.

Do you ever include (as a 0) non-excludable people not benefitting in the 401a4 test? It seems to me that they are taken into account in the 410b test, instead.

Does it make any difference whether you are running the annual method or the accrued to date? (Even someone not benefitting could have a non-zero answer on accrued to date). I think datair just changed their logic on this.

Does it make any difference if they are not benefitting because of a waiver, as opposed to being excluded via the document?

Any advice w/b appreciated,

thx!

David

QUESTION:

Calendar year 5500.

Bank A is Trustee from Jan 1 thru Jun 30.

Bank B is successor Trustee from Jul 1 on.

Are two schedule P's required?

I am looking for documentation that describes a REBA Plan.

What is the age 65, immediate annuity to lump sum conversion factor assuming 83 GAM (unisex) and 8 1/2% interest?

I have been told both 9.6156 and 9.4903

In the future, how would I combine interest and mortality assumptions to verify the correct conversion factor?

An employer has received a bill from Medicare because Medicare paid as primary payer with respect to an employee. First, is the employer the appropriate party or should Medicare have sent the bill to the insurance carrier? My reading of the statute/regulations leads me to the conclusion that Medicare does not care what entity pays, so long as it gets paid... is this correct? If so, must the employer pay the bill then try and recover from its insurance carrier? Has anybody had any experience with this?

I have a DB plan that has sufficient assets to pay PBGC guaranteed benefits but not enough to pay all benefits. I will file a distress termination with the PBGC. I can follow the allocation of assets under 4044; however, there is the reference to IRC 401(a)(4) under 4044(B)(4) that adds a twist. Assets are sufficient to pay benefits through level 4B. If I allocate the remaining assets at level 5 and then review the distributable benefits as a % of earned benefits, the HCEs are receiving a higher allocation than most NHCEs because the NHCEs are not all fully vested before plan termination. Should I reallocate the remaning assets after level 4A based on the combination of additional benefits payable to all participants under levels 4B, 5, and 6?

How does the IRS look at the allocation of assets?

Before this case, I had only filed distress terminations that required the PBGC to completely take over as trustee.

Thanks in advance for your help!

An employee's loan was recently defaulted and they received a statement in the mail stating the tax implications. The employee is now telling us that he never received any notification that this was going to happen and would like the opportunity to pay it back in full.

Besides the fact that the loan promissory note and the SPD state that the loan will default if no payment is made for 90 days after termination, is it ok to reverse the defaulted transaction and allow the employee to repay it? If so, what will happen if it comes up in a DOL audit?

Our 401(k) plan converted to a new recordkeeper in November, 2001. As a result of our ADP testing, we have to refund some employees' pre-tax contributions to the plan. What is the best method to determine any earnings that may apply to the excess contributions since the new recordkeeper would not have that history?

Have three DB plans merging effective 1/1/02.

Question regarding the SSA for Plans A, B and C for 2001 - do I show term vested/paid out as code A/D for the final 5500 SSA ? Then for new plan, on 2002 filing show all the code A's from three plans previous years as code C's.

Just confused on the timing - want to make sure I do this right.

We were a wholly-owned subisidiary of Corporation X. We were purchased by Company Y effective July 2, 2002. Until July 2, we were a participing employer in the 401(k) plan sponsored by Corporation X. Effective July 2, 2002, we became a participating employer in the 401(k) plan sponsored by Company Y. The plans are not merging.

Corporation X's plan allowed for safe-harbor hardship withdrawals. A participant took a hardship withdrawal last November, and her contributions were suspended for 12 months.

Can the participant enroll in Company Y's 401(k) immediately? In other words, was she only suspended from contributing to Corporation X's plan? Or is she suspended from contributing to any 401(k) plan for a 12-month period?

Thanks in advance.

Can a money purchase plan be used to invest or repurchase a stock for an ESOP? What authority?

Aside from possible cost issues, which I have found to be minimal, are there any valid arguments against using a corporate trustee?

I am trying to determine the meaning of the instructions to Line 4b of Schedule H - particularly the section that reads "Do not include participant loans made under an individual account plan with invesmtent experience segregated for each account that were made in accordance with 29CFR2550.408b-1 and secured solely by a portion of the participant's vested accrued benefit"

I have a client with a loan in a 401k plan that is technically in default (the participant stopped making repayments). The loan is for around $6,000 out of her total 401k vested balance of $14,000. Because the loan balance is effectively secured by the vested balance, does this mean that I do not have to report the delinquent loan as per the instructions? That somehow does not seem right to me, but it also seems to be what the instructions are telling me!

Thanks in advance

Rod

Is there anything preventing employer with a DB Plan from adopting a SEP? I am fairly certain they couldn't use the IRS model form or a prototype, but I don't see why they couldn't have an individually designed SEP.

Assuming employer can adopt a SEP, then would the maximum contrib. to the SEP be the 25% of comp. minus the DB minimum funding requirement? (Just assume all participants in both Plans would be the same.)

Thanks for any guidance.

May a plan document that requires 1,000 hours for vesting service provide that an active employee will be credited with a year of vesting service as of the end of the vesting computation period while a terminated employee will be credited with a year of vesting service as of the employment termination date (in each case provide 1,000 hours of service were credited during the eligibility computation period)?

For example, an employee is hired January 1, 2000 in a plan with a calendar year plan year. A year of vesting service is defined as 1,000 hours in the vesting computation period. The plan has a 3-year cliff vesting schedule.

The employee worked 1,000 hours in 2000 and 2001. The employee has worked 1,000 hours from January 1, 2002 to May 31, 2002 and would like to take a loan of 50% of the vested balance of their account.

Can a plan provide that this employee is 0% vested (and thus not eligible for a loan) until December 31, 2002, provided the plan also says that the employee will get credit for the 2002 year of vesting service (and so be 100% vested) if the employee terminates employment on or after May 31, 2002?

The closest previous thread I found to this question is below, but it is not exactly the same question.

http://benefitslink.com/boards/index.php?showtopic=8608

Has anyone heard anything lately about when the new Form 5310 will be ready?

Owner will turn 70 1/2 on Decembr 27, 2002. May she take the first required minimum distribution in 2002 before December 27?

What is the "Fidelity Bond to comply with ERISA Section 412"?

Is it different from Fiduciary Liability Insurance?

Thanks.

Any opinions about using a 412 i to handle the overfunding in a defined benefit plan?