I have a plan that just came to us. Previously it had a PYE of 8/31 and we took it to a 12/31 with a short plan year in 2001. The document calls for match forfeitures to be used offset match in the next plan year. Due to extreme delays in getting information from the prior recordkeeper, we were unable to complete the 8/31/01 valuation until after the 12/31/01 PYE. When that valuation was completed, we discovered we had match forfeitures that should have been used in the short plan year. My question is does anyone see a problem if we just use them in the 2002 plan year? Do you think there is an issue with overfunding that would require filing a 5330?

I asked this question before here but did not get any responses, so I'm hoping that this time I will.

Situation is inherited business and inherited (50 life) DB plan which was continued for employees. They also have an employee deferral-only K plan.

The owners want to make up for not having compensation ($375k-$200k) covered in plan. I've determined that this could be done through a QSERP, but don't want to increase DB obligations with interest rates so low and market so bad.

Instead of QSERP, want to consider DC plan covering just the two owners, with annual contributions for each of maybe $25,000. Plan would be aggregated with DB for testing. I've determined that the (a)(4) test would pass.

Anybody see problems or complications with this? Seems to be exempt from gateways; BRF seems to not be a problem. Comments please. Thanks.

Is there any requirement for an ERISA governed fund to hold a specific amount of cash reserves based upon amount/value of company stock the fund holds?

thank you.

enjoy the weekend!

I am performing an ACP test for a safe harbor plan (safe harbor contribution is the basic safe harbor match) with after-tax contributions (I know, what's the point in being safe harbor with after-tax). I would like to include the safe harbor match in the ACP test to improve test results which I beleive is permissibe under IRS Notice 98-52. Section VIII.F.3. (Special Rules for ACP Test) provides that if the safe harbor plan has after-tax contributions, an employer MAY ELECT to disregard all matching contributions in performing the ACP test. I read that as saying an employer by default would include safe harbor matching contributions in the ACP test. Can someone confirm this understanding??

Tonight I went to my bank to make my contribution for 2002/2003 to my Roth IRA which I established in 1999. The bank manger said I couldn't. The bank's policy is I have to create a new Roth IRA account with a new number every year. I responded that she had processed a contribution to the account last year, and showed her two statements which the bank sent me reflecting the same. She said it was an error and shouldn't have happened. I went to another branch, and I got the same info. I didn't make the contribution tonight because I think the bank is wrong.

Anybody aware of info. on such a policy?

Thanks,

Bob

Other than Hartford, Nationwide, Pacific Life, and VALIC, what are some other vendors out there that offer VAs with the 457 plan option?

Also, who are the good ones?

Any help at all is appreciated. THanks.

Chris

I am a self-employed individual who is setting up a Sec. 105 account for myself and my spouse. I know that with less than 100 employees, the 5500 is not required; exactly what form is? It appears that the 5500EZ is only for retirment benefit plans. What form should I be filing? Also, when I hire a couple employees and offer them this plan, is there a different form to file for a group less than 100 but greater than the owner and spouse?

Is there an interpretation out there as to whether a NQDC plan should be offered to a select group of HCE's or just to HCE's. the issue here is my client wants to offer the plan to all HCE's and I dont want them to run afoul of the exemption from having to comply with ERISA.

Are Split Dollar plans considered ERISA funded plans simply because the SD policy promises to deliver retirement income?

How does a corporation reconcile proxy reporting for a Split Dollar arrangement that was not disclosed in the previous years?

- Restate past compensation figures in the next proxy, or

- Disclose past proxy amounts in a lump sum amount this year.

A 401k Participant is continuing to see loan repayment deducted from bi-weekly paycheck. The Employer changed payroll systems mid-loan and although the new system continued to withhold loan payments on schedule, the system did not report the loan information on the remittance data sent to the recordkeeper; therefore loan payments were not ACH'd from Employer account for this participant.

The TPA and employer eventually discovered where the error occured. The employer sent in a lump sum check to cover the missed payments (unfortunately after the official cure period). The participant was still sent a 1099-R for deemed distribution.

If the participant was completely under the impression that he was meeting his loan obligation and the mistake of fact actually occured due to an HR system problem, is the loan really in default? Shouldn't the TPA be able to use this information to issue a corrected 1099? At this point, the TPA refuses to issue because they do not recognize that a mistake of fact occured and stress that the payments were not applied...the loan is defaulted no matter what the reason.

One other point to mention: when the ER lump sum was remitted last year, the TPA led the ER to believe that (because of the particular circumstances) they would take the lump sum and apply to amort. as if the payments had arrived on their due dates - this obviously did not happen.

Your expert opinion is greatly appreciated!

A defined contribution plan had a full plan year from 7/1/00-6/30/01 and a short plan year from 7/1/01-12/31/01.

Employee A worked 400 hours each 6 months - 7/1/00-12/31/00, 1/1/01-6/30/01, and 7/1/01-12/31/01, but terminated employment 12/21/01 and did not receive a contribution allocation for the short plan year due to a last day requirement.

For coverage testing purposes, is Employee A an excludable employee for the short plan year due to being a terminated participant with 500 or fewer hours of service? or does the 500 hour level have to be prorated (to 250 in this case), so that Employee A would not be an excludable employee?

Mind has suddenly gone blank - when is the GUST amendment deadline for a non-calendar year prototype plan? EX: Plan anniversary 3/1 - is (or was!) the GUST amendment deadline 3-1 or can it be done effective 1-1-02 allowing for the extension to 12/31? Thanks.

Are there any regulations against allowing a terminated employee to continue to make loan repayments if no distribution is taken from the plan.

A plan provides that matching contributions are discretionary and are made to a maximum % of pay. The plan makes matching contributions on a pay period basis and has always done so. However, neither the plan nor the SPD states that the match will be made on a pay period basis. Given how the plan is operated, a participant whose elective deferrals cease before the end of the year because of the 402(g) limit does not receive the full match they are eligible to receive under the plan--there is no true-up. Is there a problem with operating the plan in this manner when the plan document states that matches will be based on pay? Could the way the plan is written require a true-up, or is a true-up only required when the plan document includes one?

I have a Governmental Hospital which maintains dual status as a 501©3. They currently offer a 403(B) as their supplemental retirement option. They now desire to offer a 457(B) as a governmental (not top hat plan) in additon to the 403(B) for all of their employees. Is this OK?

Can anyone give some basics for a TPA in administrating a Non-qualified Deferred Comp. Plan.

We currently recordkeep an existing plan and calculate the figures for which the participants are entitled. The Company makes contributions to the trust to meet its obligations. There are two types of contributions. One from the Participants, to have cash compensation from bonus or commission etc. and the other is tied to the 415 limits and comp. limits in their DC plan.

What do most TPAs provide as a service. Thanks

I have a new 401(k) plan with an effective date of 1/1/2001. The first date that participants could actually defer into the plan was September 2001. When calculating the ADR's for the participants, do I include only their compensation paid from September through December or the enitre plan year?

I was curious if anybody knew of a cite or reference on how to properly handle this. I would lean to the more conservative approach and use the full year compensation, but this seems unfair to the two HCE's in the plan. Particularly considering there were a few employees that would have been eligible to defer if they hadn't terminated before September 1st.

Thanks

Steve

I have a DB plan with three participants, who are also the only three employees (husband, wife, and 22-year-old daughter). The husband owns 90% of the business, and his wife owns 10%. The business is not a "professional service employer."

Under section 1563(e), the daughter is not attributed any ownership since she is 21 or older. However, the "substantial owner rules" in ERISA 1322(B)(5), it states that an individual will be treated as a substantial owner w/r/t a plan if he or she was a substantial owner within the 60 months preceding the determination date.

Since the daughter only turned 21 in late 2000 and would have been attributed her parents' ownership before then, does this mean that the plan is exempt from PBGC coverage until late 2005? I think yes, but I've never needed to use this rule before, and I'd appreciate an expert opinion.

Thanks.

Employer has an ineligible 457 plan for an employee. Plan provides for installment payments (monthly for 60 months)following termination of employment for any reason at any age. Plan has a no-compete clause (assume for argument sakes that this works) that runs for 36 months. No other risk of forfeiture clause following that. Is employee taxed on the balance (remaining 24 months) at the end of the 36 months?

Thanks.