I am under the impression that a MP plan terminating as of 12/31/01 that distributes plan assets prior to that date can satisfy GUST restatement requirements by being covered under the surviving PS plan restatement, provided that there is sufficient language in the document and corporate minutes. Is there any difference if the assets were not merged into the surviving PS until after 12/31/01.

Further, if a MP or PS plan terminates effective 12/31/01 but doesn't distribute assets until 2002, does the plan need to be restated?

Two employees are each exactly fifty percent owners of a professional service corporation, which maintains a 401(k) profit sharing plan. Each employee will receive a contribution equal to the 415© maximum for 2002, $40,000. None of this amount is attributable to a 401(k) elective deferral. Both individuals are also employed by a non-profit organization, which provides a voluntary 403(B) Retirement Plan for the benefit of its employees. Under this particular plan, employees may elect to defer all or some portion of a yearly bonus of $16,000 into the 403(B) Plan. Neither employee has an ownership interest in the not-for-profit. However, both employees are highly compensated in 2002.

Question: Is it possible for each employee to receive contributions of $40,000 under the professional service corporation's 401(k) Profit Sharing Plan and defer $12,000 (remaining $4,000 in cash) under the 403(B) Retirement Plan of the not-for-profit or does Section 415 or some other limitation prohibit this?

Treas. Reg. Section 1.415-8(d)(2) provides that if the employee owns or controls more than 50% of another business that maintains another plan, the contributions to the Section 403(B) Plan must be "aggregated" with the contributions to the outside plan or the 403(B) employer's other plans. Given that neither employee owns more than 50% of the professional corporation, I conclude that aggregation under Section 415 will not be an issue under these circumstances or otherwise. Please advise.

Can a 401(k) non-electing church plan use a prototype document? The plan has no unusual provisions. The primary problem I see is the inclusion of ERISA language in the document. Can anyone cite a private letter ruling that addressed a similar situation?

Does a church plan still have to submit a request for ruling on church plan status to both the IRS and DOL?

Is their a requirement that the employer of a non-electing church plan NOT serve as Plan Administrator? The IRS ruling regarding church plan status my client has seems to suggest that a committee, "operating independent of the corporation", must be appointed as Plan Administrator. I don't know why. Nor do I know how to interpret "operating independent of the corporation," - does this mean the committee cannot be employees of the corporation? This corporation is a hospital.

Thanks to anyone who replies.

I have a new client that is a hospital that maintains a 401(k) plan. This is a non-electing church plan. Where can I find something in the IRS code that indicates they are required to perform discrimination testing? Is both ADP and ACP testing required? Thanks for your help!:confused:

I have an individual who is over age 70.5. The question I have is that she is an ascendant of a 5% owner. Although still an active employee, is she required to take a RMD for the year? The client has elected the new regs, so since she is active, she does have the option to defer, unless the fact that she is an ascendant to a 5% requires her to take the RMD.

The Thrift Plan of a company allows 4 types of periodic payment distributions (sometimes called installment payments) of which 2 avoid the 10% pentaly for early receipt of before-tax (BT) money. A participant terminates from the company (good-faith) and begins to receive periodic payments which may include BT and after-tax (AT) money. Two years later, for example, he returns to the employment of the company (re-hire). In such situations, the Plan allows the choice of either continuing the payments and not contributing to the Plan for this period of employment or discontinuing the payments and contributing to the Plan via employee contributions. Is it consistent with legislation/regulation that he may continue the periodic payments (to include BT contributions) during this second period of employment?

The above Plan is later amended to allow rehired retirees to both continue receiving periodic payments and make BT and AT employee contributions to the Plan? Is this consistent with legislation/regulation?

Any general guidance on these matters is appreciated.

Can anyone help me understand how net gain/loss for SChedule H Part II 4a,b,c are calculated. I have outside brokerage accounts that I have calculated realized and unrealized gains and losses for. Is that the number they are looking for? The instructions say something about the beginning, the value sold and the ending. I use a spreadsheet to calculate these individually and only have a total number for realized and unrealized gains. Unrealized I have reported on (5)(B). This is my first time doing a 5500 for this plan with o/s brokerage accounts and I am really confused. I posted before about this and received a response, but I am still confused.

Thanks

Client, was a sole proprietor from 01-01- through 10-10-01 then PSC for the remainder of the year. Both have profits, both with same employees.

How do we allocate the SEP. Does it get a prorata allocation between both entities during the year. Or do we allocate the SEP contribution based upon actual earnings until the wage base is used up from the beginnning of the year.

I dont believe we had SE income to the extent of 170,000 and I know that he didn't pay himself wages in the PSC during the remainder of the year. He will need to fund either by 09-15-02 or 10-15-02. Thank you

As the Enron pension hearings progressed, we became concerned about whether plan sponsors are sufficiently prepared for the challenges of the "post-Enron" environment. We have created a series of master classes designed to address fiduciary responsibilities and how today’s ERISA plan fiduciaries can best manage the changing landscape of liability and litigation.

http://plansponsorevents.com

As the Enron pension hearings progressed, we became concerned about whether plan sponsors are sufficiently prepared for the challenges of the "post-Enron" environment. We have created a series of master classes designed to address fiduciary responsibilities and how today’s ERISA plan fiduciaries can best manage the changing landscape of liability and litigation.

http://plansponsorevents.com

As the Enron pension hearings progressed, we became concerned about whether plan sponsors are sufficiently prepared for the challenges of the "post-Enron" environment. We have created a series of master classes designed to address fiduciary responsibilities and how today’s ERISA plan fiduciaries can best manage the changing landscape of liability and litigation.

http://plansponsorevents.com

I have a company in a multiple employer plan that failed last year's top heavy test. Now, in September of the following year, this company has terminated services with this PEO and the participants are going to be taking distributions from the plan. Does the company still need to make the top heavy minimum contribution? Does anyone have any documentation regarding this? The top heavy employees have deferred more than 3%. Also, what compensation would you use (compensation up to the time of termination of services or compensation for the full year)? Any info that you have would be great. Thank you in advance.

Is there a requirement in the code, regs or any other authority that requires a plan sponsor to actually perform a top heavy test when they know from prior years the plan is far from top heavy?

Company A is a wholly owned subsidiary of B, and has been for several years. On July 1, the employees of A are no longer paid directly by A (using A's EIN), but are paid directly by B (using B's EIN). Should B recognize the year-to-date Social Security earnings and tax already paid by A's employees?

A plan's funding method is changed as per Rev. Proc. 2000-40. Is it sufficient to answer "yes" to item 7 on Schedule R,along with his signature on the return itself, to signify the sponsor's agreement to the change? Or must there be a separate signed statement attached to Sch. B as well?

Are pre-K costs covered by an Education Savings Account (formerly known as an Education IRA)?

I think this will be a fairly simple question for you experts.

When coordinating benefits, insurance companies will not "double" coverage. What other reason would someone have coverage from two insurance policies?

It makes sense if one insurance policy has a higher level of coverage in one area but the the secondary might be higher in another (IE better coverage in dr. visits but secondary having better coverage for hospital). I didn't know if there may be other reasons to do this.

Thanks for your help.

I have a takeover client whose 5500 was due 7/31. We didn't get her until August and previously her plan was "handled' by the broker,who didn't realize that the first two employees entered the plan in 01,so she was no longer exempt under the "one participant plan with assets

Thank you for any help.

I'm interested in purchasing or merging with pension consulting and administration firms. Does anyone have a resource for finding such firms?

Company A is a member of a controlled group with 3 other affiliated employers (B,C,D) all of who have adopted Company A's plan. B has both union and non-union employees. The non-union employees participate in A's plan. The union employees are covered under a separate plan sponsored by B.

Company A has recently unionized. The union contract states that A must provide retirement benefits for union employees. Must company A set up a separate plan for the union employees?

If so, is the union plan for company A and union plan for Company B tested separately or must they be aggregated?