I have a 401(k) plan with deferrals only, no match, no P/S contributions. The company owns a number of different entities and we recently established that a control group exists with 3 other companies. 2 of the companies have employees and offer a Simple Plan to approximately 30 participants. What will need to happen as far as including these companies with the 401(k) qualified plan? Do they have to be included under the plan, what about testing?

We have a participant in our 401(k) plan that is trading large sums of money between an international equity fund and an investment contract fund, creating a need for idle cash in both funds to meet his liquidity needs.

Has anyone had to deal with a participant or group of participants on this issue?

The investment contract fund is only available to our participants which makes it easy for us to modify the trading priviledges, but how have you dealt with the investment funds that fail to enforce their own market timing trading restrictions?

Thanks,

Mike

we have a plan that allows insurance to be purchased. 1 person in this profit sharing plan took advantage of this a few years ago. 2 years ago the insurance company where the policy was purchased demutualized and the policyholder received shares of the insurance company. should these shares now be included in the value of the participants assets (in addition to the value of the policy)? or does he own them individually?

any comments are appreciated. thanks.

NQDC "account" plan informally funded with life insurance and mutual funds through a rabbi trust. Death benefit includes a 4-year payout to named beneficiary equal to a declining percentage of then base pay, plus the then theoretical CV of insurance at executive's death, so long as the insurance DB does not exceed sum of aforementioned.

Query on taxation to beneficiary, as Medicare has been withheld annually by employer. What is taxable to the beneficiary as to the four annual death benefit payments? Ordinary income only or income reduced by both FICA and Medicare taxes?

How does taxation issue change if beneficiary is the participant's revocable (now irrevocable) trust?

I'm a TPA and I get requests for determination letters from terminated participants of the plans that I administer that wish to rollover their money to a new employer's qualified plan. It is my understanding that this is no longer required by law but I can't find the exact law that changed this. We deal with a lot of prototype plans and the determination letter doesn't have the name of the client on it so I hate doing this because it never satisfies the new employer. I then have to give them a copy of the Adoption Agreement.

Any help on where I can find the law so I can show these people that I don't have to give them anything.

I would greatly appreciate it if someone could explain why all existing IRAs are considered in the tax formula, when a conversion of one IRA, which contains only after-tax contributions, is converted to a ROTH. And, also what exactly is pro-rata? I just doesn't seem correct that existing IRAs should enter into the tax formula on form 8606. Maybe I am wrong.

:confused:

I have two IRAs, a traditional (rollover on the basis of a QDRO), and a Roth. I'm currently trying to assemble the down payment for a first time house purchase.

What are the rules governing borrowing from IRAs under the "First-time Homebuyer Affordability Act"? Would I owe interest, or just the principal? Are there any timeframes within which the funds need to be replaced?

I believe that for Roths it's a qualified distribution rather than a loan, but I need confirmation of this.

And which would be more advantageous to withdraw funds from, the rollover IRA, or the Roth?

Thank you for your assistance.

Are there reasons why an employer cannot terminate a 457(B) plan and distribute account balances to participants? The plan in question is not a governmental plan. I know that benefits under a 457(B) may not be distributed earlier than age 70-1/2, separation from service or unforeseeable emergency. But, it would seem that the employer ought to be able to terminate the plan and distribute benefits despite these restrictions. What am I missing here? Thanks.:confused:

Vanguard charges a .005% fee when investing in their Small Company Growth Index Fund (VISGX). They purport that it is not a load, but to investors, it is in substance the same thing. In making my 2003 contribution, I added the .005% to my contribution. In actuality I contributed to a few different funds, but for illustrative purposes, had I put it all in this fund, I would have sent $3015, which would have purchased $3000 in shares, and paid Vanguard the remaining $15 (.005% of 3000). I did only get $3000 in shares and Vanguard got the $15, but Vanguard treated the entire $3015 as a 2002 contribution on my statement. What are the ramifications of this? How should I address it? Obviously it is not a significant $ amount, but I would like to treat it appropriately for legal and tax purposes. Thanks.

Gpohl

Public school district will set up a 457(B) plan in 2002. Terminated employees receive accrued vacation and sick pay in a lump sum within days or possibly weeks after termination, not in final paycheck.

Question: Can 457(B) participant defer out of the termination pay? (Assume all other requirements and limitations of 457(B) will be met.)

Note that as a result of the Job Creation and Worker Assistance Act of 2002 technical corrections, the definition of "includible compensation" for purposes of Section 457(B) is the Section 415©(3) definition. Severance/termination pay clearly qualifies as 415©(3) compensation.

I am aware of the IRS' generally negative views about deferring into a 401(k) plan out of post-termination severance pay, but I don't see "active employment" as a requirement for 457(B) deferrals.

One difficulty may be that 457(B)(1) says that "only individuals who perform service for the employer may be participant." However, I don't see why this would preclude a deferral out of severance/termination pay, as long as the deferral election is made prior to termination date.

Any thoughts?

What is the difference between 403(B) and 401(a) accounts?

I am interested in reading a specific section of the EGTRRA. Does anyone know if an online version is available someplace?

It seems clear that an ESOP cannot be cross tested for 401(a)(4) purposes, but if you are testing a profit sharing plan and must go to the average benefits test, and an ESOP is included, does anything prohibit determining the employee benefit percentages for the combined allocations on a benefits basis?

I don't see anything prohibiting it, but it seems like a contradiction.

Is it possible that a 50 year old employee, in 2002, could take advantage of the 22K limit in 457(B)(3) and the 15K limit in 403(B) when working for the same employer the last 15 years and not fully funding the 403(B) and 457?

Can an employee, over 50 years old, working for two unrelated employers use the catch-up on both plans? For example, defer $7,500 with company A and defer $4,500 with compnay B.

Does a plan participant in a non-governmental 457 plan who continues to work beyond age 70-1/2 have to start taking minimum required distributions before employment terminates? If so does this constitute a one-time irrevocable election on distributions?

How are others handling employers who failed, for whatever reason, to sign a GUST certification by the February 28, 2002 deadline? Has anyone heard any rumblings from the IRS as to whether they have set a fee for GUST non-amenders for VCP correction?

Rev. Proc. 2000-20 is somewhat vague. One reading seems to support a position that an employer who currently has an old M&P or VS plan can rely upon the extension of the remedial amendment period if the sponsor filed for a GUST letter, and can adopt any sort of plan within the extended period. Does anyone else read this the same way I am?

We are leaping into the 1990's and actually administering new comparability plans. The document I am looking at has only 2 classes of employees. Each class shares in a different Pool of money. How do I allocate each Pool to the right group in Relius?

Thanks for any guidance.

Situation: 1 HCE, 1 NHCE, uses a standardized prototype document. On 12/31/01 the plan is top heavy.

Effective 1/1/02 plan restated on a non-std safe harbor 401(k) document.

If only deferrals and safe harbor match go into the plan from now on, is the plan top heavy?

The NHCE will not defer, so she will not receive a contribution.

We talked about top heavy safe harbor plans at Corbel's 401(k) update last week, and I'm more confused now than I was before.

Side issue: On restatement, could the NHCE sign one of those irrevocable waivers, and if so, would top heavy contributions (if the plan is top heavy) have to be made?

Thanks. Maverick