Maybe a stupid question, but the more I do this stuff, the more I forget. Plan has 1 YOS for PS and immediate for 401(k). Plan is top heavy so employees with less than 1 YOS receive minimum 3% top heavy only.

Please confirm that when running the cross-test, I do not include the less than 1 YOS people, because they are not benefitting under the PSP portion of the Plan. However, they are included in the ABT, so that the ABT may have 500 NHCEs and the cross-test may only have 350. Is that correct?

Thanks for anyone and everyone's help.

When are they going to be ready? My software provider keeps telling me that the DOL has not approved them yet. The DOL told me they were going to be ready by mid April.. anyone knows what's going on?

Thanks

I have a Dr. who is a participant in the Medical Spending Account Plan. He wrote prescriptions for his self and for his wife. Is this eligible for reimbursement? If not can someone tell me where I can find information stating that it is not reimbursable?

Under PLR 200135045, minister's housing allowance is not includible for the 415 annual addition limit testing. Does this mean that a minister can defer from his total compensation, including the housing allowance, as long as the total deferred, matched and contributed as an employer profit sharing contribution is less than 25% of his salary (excluding the housing allowance) in 2001? In other words, the contribution amounts are based on total compensation including the housing allowance, but the test is run without the housing allowance amount.

An actor,writer,director,etc. participates in a qualified plan sponsored by his corporation.Contributions are also made on his behalf to the retirement plans sponsored by the Screen Actors Guild, Writers Guild, Directors Guild. A few years ago the IRS seemed to be very concerned about the application of multiple plan limitsto these arrangements,but the concern seeme to die down with the repeal of 415(e). Is it still a concern with respect to excess dc annual additions?

EGTRRA Nonconforming States-- does anyone disagree that we're down to eight: Arizona, Arkansas, Georgia, Hawaii, Kentucky, Massachusetts, North Carolina, and Wisconsin.

As I understand it, in year of termination, a school teacher ina 403(B) can make a 1-time election to contribute a special make-up contribution. The amount is equal to the difference between what they could have contribtued vs what they did contribute during the previous 10 yrs. This amount is capped at $30000. Was this provision effected by EGTRRA? If yes how? If no.... great. Does anyone have a worksheet to help calculate this amount? Also, is this provision coordinated or integrated with the catch-up provision available to those participants with 15 or more yrs of service with an organization?

If a government agency is the employer, and they have a cafeteria plan. What is the definition of a highly compensated employee and key employee for discrimination testing?

Are these plans subject to discrimination testing for key and highly compensated employees ?

In 1974 when erisa become law, and the oil crisis started, i worked for the auto insdurity that had a defined pension plan and a 10 year vesting period. they was over 30% layoff. would this be called a partial termination, and the remaining workers become 100% vested. Thanks for any and all help

Our 401(k) plan provides 100% vesting and distribution options if a plan participant is disabled. Does the plan need to be amended in any way, so it complies with DOL Reg 2560.503-1?

A friend is telling me that ..........

When I retire, if I am over age 55 (under age 59 1/2) I can take a partial distribution from my pension cashout (prior to rollover to IRA) and the distribution would not qualify for the 10% IRS penalty (just income taxes).

Is this true and if so, what IRC code refers to this?

Thanks guys.

Facts:

Compensation defined in plan exludes bonus, commissions and overtime.

In section of document regarding ADP testing, it refers only to "compensation". It doesn't say 414(s) or compensation defined in a particular § of the document. I have assumed it means use compensation as defined above.

414(s) compensation testing passes.

ADP passes using gross compensation

ADP fails using comp. defined in doc.

Does anybody know if I have to use the comp net of bonuses, etc.? Is it possible to use gross?

Thanks in advance

As a follow-up to my previous post, does anyone have experience with American Express Mutual Funds family, concerning performance, expenses, etc.? My financial advisor is with AMEX, and I will be rolling over my 401K to him shortly. I would like to stay within the AMEX family so that distribution dates for each fund can be more easily avoided since my advisor will be more in-tune with each funds dates.

:confused:

Here is the question:

I have a client who owns two companies, we will call them company A and company B. He has wanted to start a retirement plan for some time now, however, he has a thin operating margin relative to the size of the company and he has a huge employee turnover ratio. Given the situation he wants to setup two plans- a Simple IRA for company A and a SEP for company B. He then wants to make management and middle-management employees of company B while keeping all other employees at company A. This would allow him to do three things:

1.) He will be able to use a Simple and a SEP and avoid the

prohibitive costs of a 401(k).

2.) He would hopefully be able to reduce his employee

turnover.

3.) He would be able to provide management (company b) with a

higher (and discretionary) company contribution and only do

a 2% - 3% match for the other employees (company A).

Can anyone tell me if this (all or part) can be done? I know that both companies are under the same control group, however, it is my understanding that both companies must offer retirement plans and that IRS guidelines do not mandate that the plans be exactly the same. Any help would be appreciated.

Thank You!!

Here is the question:

I have a client who owns two companies, we will call them company A and company B. He has wanted to start a retirement plan for some time now, however, he has a thin operating margin relative to the size of the company and he has a huge employee turnover ratio. Given the situation he wants to setup two plans- a Simple IRA for company A and a SEP for company B. He then wants to make management and middle-management employees of company B while keeping all other employees at company A. This would allow him to do three things:

1.) He will be able to use a Simple and a SEP and avoid the

prohibitive costs of a 401(k).

2.) He would hopefully be able to reduce his employee

turnover.

3.) He would be able to provide management (company b) with a

higher (and discretionary) company contribution and only do

a 2% - 3% match for the other employees (company A).

Can anyone tell me if this (all or part) can be done? I know that both companies are under the same control group, however, it is my understanding that both companies must offer retirement plans and that IRS guidelines do not mandate that the plans be exactly the same. Any help would be appreciated.

Thank You!!

:confused:

Here is the question:

I have a client who owns two companies, we will call them company A and company B. He has been trying to start a retirement plan for some time now, however, he has a thin operating margin relative to the size of the company and he has a huge employee turnover ratio. Given the situation he wants to setup two plans- a Simple IRA for company A and a SEP for company B. He then wants to make management and middle-management employees of company B while keeping all other employees at company A. This would allow him to do three things:

1.) He will be able to use a Simple and a SEP and avoid the

prohibitive costs of a 401(k).

2.) He would hopefully be able to reduce his employee

turnover.

3.) He would be able to provide management (company b) with a

higher (and discretionary) company contribution and only do

a 2% - 3% match for the other employees (company A).

Management (company b) would consist of 10-15 people and everyone else (company A) would consist of 85-90 people. A straight Simple IRS can not be done for company A as it currently exists since there are 105 employees.

Can anyone tell me if this (all or part) can be done? I know that both companies are under the same control group, however, it is my understanding that both companies must offer retirement plans and that IRS guidelines do not mandate that the plans be exactly the same. Any help would be appreciated.

Thank You!!

I understand that the 2002 contribution limit to a PSP is now the lesser of $40,000 or 25% of compensation. This is now equal to a MPP.

I also read that the contribution limit to a defined contribution plan is $40,000 or 100% of compensation.

If I am self-employed with no other employees (I am the the employer and employee) and I have $40,000 of self-employment income, can I make a $40,000 deductible contribution to my PSP Keogh? Or am I limited to a $8,000 deductible contribution (20% of $40,000 since I am self-employed)?

If I am limited to 20% of compensation, should I be using a SEP-IRA instead of a PSP Keogh?

Any advice would be greatly appreciated.

My client has a small 401k PSP, 12 participants.

They are currently a sub-s corp. They are changing their name (very minorly) and will be a P.A. type business, hence they will get a new EIN. Their current 401k DOES NOT have a separate tax i.d. number, they've always used their EIN. There will be no change to ownership or employees - just new name and i.d.

what should be done with plan? should we look at this as a termination and new plan? a merger? I presume the EIN for the sub-s will become defunct after the 7-1-02 effective date of the new P.A. and it's new i.d.

To make matters worse, they told us this after they planned to move all assets to another provider, schedule for June. I'm concerned I may not get assets transferred from one provider to another if the name of the trust is at all different.

A company has just realized that they left someone out of the census for the 2000 plan year thus that participant did not receive a contribution for 2000. The contribution was just recently made for this participant. Besides filing an amended 5500 are there any other steps that need to be taken to correct this?

Can an employee that had elected Medical, Rx, and Dental coverage prior to their Cobra event then switch to just Medical and Rx (dental dropped) for their Cobra election? It is my understanding that the QB cannot drop/add coverage elements unless it was an open enrollment period-which this is not.