Employer overfunded SIMPLE IRA match for calendar year 2001 in 2001. Overfunding found out after employees filed 2001 income tax returns. I know excess must be withdrawn but not clear on several issues, specifically:

1. When excess returned who gets the money employee or employer?

2. Does the employee have to include excess contribution returned as income? If so what year 2001 or 2002? What form should this be reported on 1099R or W-2?

3. What are penalties for employee & employer?

Employer X maintains a qualified defined benefit plan and a qualified defined contribution plan. As part of the defined benefit plan, Employer X provides a voluntary deductible employee contributions ("VDEC") arrangement, under which up to $2,000 could be contributed on a tax-deductible basis between 1982 and 1986. In order to modernize the administrationv of the VDEC, Employer X proposes to transfer the VDEC from the defined benefit to the defined contribution plan. Are there any required filings or disclosures to the IRS, DOL or PBGC or participants with respect to the transfer of the VDEC from the defined benefit plan to the defined contribution plan?

We're evaluating our subscriptions and services and were curious about other TPAs' favorite ways to access the code and regs. It is available in lots of places, I know, some costly, some free, some easy to use, some hard. We want to find one great resource for this information and hopefully that will allow us to cull out some of our subscription services. We wondered which is the favorite out there in TV land. 99% of our work is 401(k) recordkeeping.

Does anyone have experience using the Delinquent Filer Volunary Compliance Program in the following situation:

A 403(B) plan recently discovered that it has a Form 5500 filing obligation because the employer makes contributions in addition to the employee deferrals. The plan administrator wants to bring the plan into compliance. It is contemplating using the DFVCP but the plan requires a complete return including all schedules and attachments for each year that relief is requested. The plan does not have the necessary information to make complete returns for all outstanding years.

Any idea how to approach this in a DFVCP? Any other ideas?

Good afternoon. I have a question...

This question concerns the new contribution limit of $40,000 and the compensation limit of $200,000.

We have a coupled MP and PS plan with a plan year ending 4/30/02. They both are single participant plans with the MP plan contribuition being 10% and the PS being 15%. The participant's compensation is $229,000.

Under the assumptions of the new EGTRRA changes that would leave his contribution for the plan year ending 4/30/02 as being limited to $200,000 of compensation and making his contribution $20,000 to each plan for a total of $40,000. Does this seem correct?

We did get some guidance last year from the IRS concerning whether for the plan year ending 4/30/01 on if his contribution would be limited to $30,000 (the 2000 limit) or $35,000 (the 2001 limit). We were told that the limit that applies is the year in which the plan ends.

Would this apply the same with the EGTRRA changes mentioned above?

Thanks for all your help,

Ronnie Wasel

Is an insured or self-funded death benefit that a union provides its members an ERISA plan for which a Form 5500 needs to be filed? (There are more than 100 members.)

Few questions regarding what may be permissible for fixing failed ADP test from 12/31/2000 currently.

1) Is correction using reverse QNEC method available under SCP?

2) If so, does document have to specifically provide for reverse QNECs, and if so when does that provison need to be in the plan?

Old document (in the basic document) provides for QNECs to NHCEs based on Comp to any NHCEs that met allocation requirements. (1000 and EOY)

GUST document (in the basic document) provides that the ER may operationally elect to allocate QNECs prorata on comp, flat dollar, or reverse method. Again only to particiapnts that met any allocation requirements (1000 and EOY). There is no special effective date for this provision, and we have used a restated date for GUST docufment of 1/1/1997.

Can we use this reverse method to fix the 2000 test since that is the document in place when fix is being done, and that is the method provided in the document?

3) If reverse QNEC can not be done under SCP, does filing under VCO need to be done for reverse QNEC? Are there any issues wtih the above topic (which plan document can be effective) if we file?

Any other thoughts on this topic? We are obviously trying to minimize cost through use of reverse QNECs rather than full QNEC. I realize that the IRS has stated they will be coming up with documentation limiting use due to new 415 limits under EGTRRA. The reverse QNEC in this case is not quite as severe due to the fact the particiapants that receive it must work 1000 hours and be employed on last day of plan year, so it is not the least cost reverse QNEC that could exist.

Any experiences recently on the IRS correction programs apreciated. I also understand a new Rev Proc is expected in 2002, possibly as soon as June. Does that change any actions suggested?

Thanks.

Dawn

We have taken over administration of a defined benefit plan for which the documents provide 411 actuarial equivalence using the 1983 Individual Annuity Mortality Female Table Projected to 2000 using Scale G.

Does anyone have access to that table, preferably the Lx values? Is it available on the internet anywhere? It doesn't seem to be one of the SOA tables.

I assume that the Central States Teamsters plan is underfunded. Does anyone know how we can confirm that quickly? They won't reply over the phone.

I know that MRDs are not required for non-owners (who are still employed). However, I have not been able to find any specifics on what should be contained in a waiver signed by the non-owners (stating they do not wish to start MRDs). I have not even found if a written waiver is required.

Any comments or suggested reading is appreciated.

The premise of having a 401(a) plan for superintendents or say "valued" math/science teachers is to have them sign a contract whereby a portion of their pay is irrevocably elected into a 401(a) arrangement. The deferral is not deemed an employee CODA, but an employer contribution, ergo not subject to the 402(g) rules.

Does anyone have contractual language that they've seen that satisfies the one-time irrevocable election requirement? Should the language cite the Code exception?

Has anyone seen this work when the superintendent's contract is either renegotiated (during the current contractual terms) or is it just something that occurs at the original date of hire, or when the contract has expired and a new contract is being signed?

With the changes introduced by EGTRRA, has anyone seen any "new" plan designs worth investigating?

Replies welcomed!

We have an employee that has had an illness and will probably be out for an undetermined amount of time....any leave she had accumulated is now used up and she is not generating a paycheck but we are holding her position. My question is what to do about pre tax deductions...mainly health insurance premiums, and some other Sec 125 items. When there is no paycheck to deduct from how do you obtain this money from the employee? Is it legal to just keep record of what is owed and then re start deductions when the employee resumes work? Thank you.

Is it possible to use Deferred Compensation (457) monies to buy back past service in a new defined benefit plan? Any specific limitations or requirements?

Although Notice 2001-56 allows the $200,000 pay cap to be fully retroactive, can all service be taken into account if the benefit formula is ALSO changed without worrying about the amendment timing issues of 1.401(a)(4)-5?

It seems to me that if a plan that had turnover of NHCEs but not HCEs, an amendment to just reflect the new pay cap retroactively would not present any (a)(4) timing issues (but the resulting modified benefits would still need to be nondiscriminatory). However, if the benefit formula was also changed, then the timing issues would have to be taken into account.

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For example, consider if a participant's benefit for 2001 was capped at $90,994 (415 Limit for Retirement Age 60, SSRA 66), based on the formula $170,000 x 3.35% x 16.

If $200,000 was used instead, the benefit would increase to $107,200. If we assume the 2002 415 limit for retirement age 60 is $138,658, there is $31,458 worth of benefit still available.

Due to turnover, I don't think it is acceptable to just amend the plan to use a formula of $200,000 x 4.33% x 16.

However, since I haven't had a chance to think about this in great detail, I would appeciate hearing what others think.

Is there a font size requirement to be used in preparing enrollment forms for a health plan?

I have a plan which has a controlled group of companies which participate in the plan(all tested as one plan not disaggregated) all particpants are eligible for 401(k)(date of hire) and match(year of service, semi annual) if they meet the requitements under the plan, however the profit sharing(year of service, semi annual) contribution is by company, with only one company contributing a profit sharing contribution to the eligible employees of that company only (integrated allocation), this plan cannot pass 401(a)4 on an allocation basis so we convert to a benefits basis and test. My question is does the 5% gateway apply and if so who needs to get the 5% gateway? Everyone eligible in the plan or everyone eligible to receive the profit sharing contribution which would be the eligible employees of the one employer making the contribution.

I am completely new to Roth IRA's and I need help in deciding which of the three funds are best for me. If possible, I'd rather not read through all the dense online material available, because none of it really makes sense to me. All I know is that I need an account that will fund my retirement, since our ever so kind government has imposed yet another heavy TAX on me and the American People, and then gave it a warm and fuzzy name called "Social Security" ( aka wealth redistribution ). Fact is, if I could put what money i'm forking over to politicians with socialist agendas, into my own Roth IRA, i'd be so much better off, but that's another issue I guess.

I'm going through Vanguard.com because it was recommended by Clark Howard. Here are the three stock funds they ( VanGuard ) has narrowed me down to.

Average Annual Total Returns as of 04/30/2002

Name Yield1 Year 5 Year 10 Year

500 Index Fund Inv 1.30% B -12.77% 7.52% 12.13%

Stock Mkt Idx Inv 1.17% B -9.91% 7.76% 11.67%

Growth and Income Inv 0.95% B -11.67% 8.70% 12.71%

Can anyone help ?

Adam

Curious as to how M&P sponsors are complying with the recordkeeping requirement to maintain a list of all employers adopting plan. What are you getting back from your clients? New service agreement, signed adoption agreement, etc. Do you require originals back, are you accepting faxes?

We have a controlled group of corporations. Two of the Companies have a Simple IRA and one has a 401(k). We would like to terminate the Simples and have all three Companies under the 401(k). However, there are a few participants in the Simples that have not been participants for two years. It is our understanding that any one who has been in the Simple for more than two years can rollover their balance to the 401(k) plan tax free, but the other individuals cannot rollover into the 401(k). Nor can they rollover into a traditional IRA without the 25% penalty. IS this correct? Is there anything we can do to make all rollovers tax free?

Has anyone heard anything about the April GATT rate? I though once they released the March rate that they had established a procedure to get the rate out on time.

Any word as to when we can expect the April rate?