I am really struggling with the new comparability regulations. I have a medium size plan with 21 HC & 128 NHC. The plan is a top heavy integrated 401(k) plan with a 3% match.

The trustee would like to use a $125,000 profit sharing contribution and maximize it for the HC's. Being this is a 2002 plan scenario, the match is being utilized to help satisfy top heavy and then the remaining part of the 125,000 is allocated.

I have used the spread sheet provided by Fred Payne to calcualte the Gateway and it appears to pass, I am just real concerned that I am not satisfying top heavy.

At it stands now the highest HC is receiving a contribution of 2.34% overall and the lowest NHC percentage is .77%. A participant who made no deferral is receiviing a 3.11% contribution. the 2.34% + .77%.

This just doesn't seem to make sense in my brain. Any advice would be appreciated. Hope I don't totally confuse everyone with my lack of knowledge.

Thanks

Employer sponsors a 401(k) plan with a calendar year plan year and individually designed plan document. Hence, the GUST remedial amendment period ended 2/28 and the 2001 plan year ended 12/31/2001. The plan document provides for 2001 and future plan years that the prior year testing method is used for ADP testing. We'd like for the employer to amend the document now (April 2002) to change for 2001 and future plan years to the calendar year testing method. Is this permitted?

They have been several threads on this question in the past, the most useful of which is

http://benefitslink.com/boards/index.php?showtopic=13800

in my opinion, but now that the GUST remedial amendment period has ended, it becomes a tougher issue to resolve.

Recently Indiana made it a requirement that insurers etc must make detailed claims experience info available even for small groups.

Are there any other states with similar laws?

Who inherits in the following case:

John is the secondary beneficiary of his father's IRA. His mother was listed as primary beneficiary when the IRA was opened 12 years ago. His parents divorced 6 years ago and haven't spoken since. The beneficiary designation on the IRA was never changed. The divorce decree was issued in the state of Tennessee and specifically states: "Each party hereby waives any and all interest or claim to the retirement account, etc. of the other party, and by execution hereof each party expressly waives such interest or claim." Unfortunately John's father is recently deceased. Does the divorce decree negate the mother's (ex-spouse) status as primary beneficiary which means John inherits the IRA as secondary beneficiary?

Please see link:

http://benefitslink.com/boards/index.php?showtopic=49788

1.411(B)-2 sets forth a method for computing and applying an actuarial increase for retirement after age 65, as a minimum accrual, if no suspension of benefits notice is provided.

my question is s/ this act increase include a mortality assumption during the deferral period?

i.e if a person retires at say age 70 (simplified for purposes of this discussion) s/ the act increase look like which one below?

a) N65/N70 (with mortality)

or

b) (1+i)^5 * a65/a70. (without mortality)

any comments?

gary

I'd appreciate any information or thoughts anyone might have on the following issue.

I have a 403b account that I need to consider as I prepare my will and do some estate planning. My picture has been that a 403b account could be left to an individual or to a trust. Each approach had benefits and weaknesses. Leaving the account to an individual allowed the funds to be withdrawn over the life expectancy of the recipient, allowing for long protection from taxes; however, a young recipient might make poor withdrawal and investment decisions. Leaving the account to a trust could protect against poor decision making; however, the funds would have to be completely withdrawn within roughly 5 years after my death.

I've recently read that a trust mechanism is now available for Roth IRAs that gets around this problem. Specifically, I understand that Roth IRAs can now be left to a trust, but that the money only has to be withdrawn at a rate based on the life expectancy of the eldest beneficiary of the trust. This mechanism seems to have all the benefits I'd be interested in.

My question: does such a trust mechanism also exist for 403b accounts? If so, I'd appreciate learning about any books/magazine articles/webpages that contain relevant information.

Thank you much for taking your time to read about my question. I appreciate it very much.

The attached document suggests that an IRA owner may use his IRA money to purchase shares of his own LLC. This seems to be a prohibited transaction- is it not?

Just want to confirm this with anyone:

Plan year ends 3/31/02. Limitation year is the plan year. We are using the following.

Annual addition = 40,000

Compensation = 170,000

Salary Deferral = N/A

Now for EGTRRA, the company has not signed off on any amendment yet. Does the new EGTRRA laws still go into effect starting after 12/31/01. For example can the new 415 limits go into effect for the 3/31/02 PYE? What others are effected? Any other insight would be appreciated

I originally posted this message on the 403(B) board, but got no response. I am hoping since this board is frequented more, someone here might be able to help.

I am new to the retirement plan market. Is there any online resources like serch401k.com but for 403(B) plans?? It would be nice to be able to put together an RFP and see which companies would be the best fit without having to call 30 different providers.

Any help would be appreciated.

__________________

TLZ

:confused:

Individual received W-2 wages of $5,000.

Individual is also a sole-proprietor. His tax filing shows self –employment loss.

Can he still make an IRA contribution even tough his tax return shows a loss?

A private sports club with a "no tip" policy for guests collects contributions from guests towards a Christmas fund and distributes to service personnel who are employed on the last day of the plan year?

ERISA plan, or no?

I have a plan with the following:

412 Traditional FFL = 4,442,637

RPA FFL = 0

Normal Cost + Amortization of Bases + Interest = 944,838

FSA Credit Balance = 0

Is my minimum required contribution $944,838 ?

Hello everyone!

I need some help. I currently have a traditional IRA that I have already contributed $2K for 2001. The balance is around $7,000 and I'm 32 yrs old.

I have already sent in my tax return for 2001 to the irs.

I'm interested in opening a Roth IRA before April 15th (I know I'm cutting it close . If I open a Roth for year 2001 will I need to pay tax on that for 2001. If so is there an irs tax form for this?

OR Is it better to wait until after April 15th and open it for 2002?

Also, I was thinking since the market is down I might want to convert the traditional IRA to a Roth. I would do this conversion after April 15th. What is the penalty for this and is this a good idea?

Or should I just keep the traditional IRA .. let it accrue and start a Roth IRA also.

Is there an advantage to having both besides being able to save more? or disadvantage if any.

thanks for your help!

Please comment on these facts:

1.) Full time employee quits job at Corporation A (no ownership of Corp A and no retirement fund contribution for 2001 from A and no salary deferrals during time at A in 2001.)

2.) She sets up LLC and is the sole member and worker. Not an employee and doesn't receive W-2 wages or salary. No payroll is running. Takes draws from the LLC account.

3.) She sets up SIMPLE IRA prior to year end and gives self notice of rights under the SIMPLE.

4.) Total income received prior to 12/31/01 before deductions is $10,000. Business expenses for December will be about $3,000 to $3,500. (Net taxable income should be close to $6,500 before SIMPLE contribution.)

5.) She wants to fund $6,500 max to SIMPLE IRA.

Two questions:

A. Can the contribution be made prior to filing of federal tax return plus extensions? (no regular pay periods)

B. Can she also fund a matching 3%? If so, how do you calculate the amount? 3% of $6,500? 3% of zero (the net after the SIMPLE contribution?

Any insight would be appreciated

Thank you,

Please comment on these facts:

1.) Full time employee quits job at Corporation A (no ownership of Corp A and no retirement fund contribution for 2001 from A and no salary deferrals during time at A in 2001.)

2.) She sets up LLC and is the sole member and worker. Not an employee and doesn't receive W-2 wages or salary. No payroll is running. Takes draws from the LLC account.

3.) She sets up SIMPLE IRA prior to year end and gives self notice of rights under the SIMPLE.

4.) Total income received prior to 12/31/01 before deductions is $10,000. Business expenses for December will be about $3,000 to $3,500. (Net taxable income should be close to $6,500 before SIMPLE contribution.)

5.) She wants to fund $6,500 max to SIMPLE IRA.

Two questions:

A. Can the contribution be made prior to filing of federal tax return plus extensions? (no regular pay periods)

B. Can she also fund a matching 3%? If so, how do you calculate the amount? 3% of $6,500? 3% of zero (the net after the SIMPLE contribution?

Any insight would be appreciated

Thank you,

Does anyone have a sample QMSCO Procedure they would share?

Thanks

You have a 401(k) Plan which also includes a match and profit sharing feature. The company matched in excess of the

402(g) limit for several plan years.

My question is, does the excess match get placed into a suspense account to be used to offset future match contributions (as described under the self-correction program) or, do you reallocate the excess match now as a profit sharing contribution.

Is the answer clear-cut? If so, where can I find it?

Our vendor has prepared a draft of the 2001 Form 5500 and has recommended that distributed loan balances be reported under Schedule H Part II, 5(B) - Unrealized appreciation. Is this an acceptable treatment?

Through a recent acquistion, bank trust department inherited a custodial IRA containing a bunch of loans (none of which are party-in-interest). About 35 loans with outstanding principal on the books at approximate $300,000. Maturity dates range from 2000 to 2010. Under the former arrangement, IRA owner forwarded money & detailed payment information to previous custodian. No payments have been received on the loans for about 13 months, even after several communications with the IRA owner.

Custodial agreement allows trust department to resign after 60-day written notice, distributing assets to new custodian, or if IRA owner refuses to name another custodian, to distribute assets to the IRA owner.

Problem is the distribution value. Would loans be distributed at outstanding value or $1 each?