A sole proprietor has average compensation for 3 years of 200K and in the fourth year has comp of 50K. The funding obligation for a DB Plan is 80K. I believe that Code Section 404(a)(8) provides a deduction limit of 50K in this situation, but what happens to the extra 30K? Does the deduction carry forward or is it a non-deductible contribution that won't be taxed upon retirement?

An employee is promoted to and becomes an equity partner on June 1. The company's cafeteria plan is on a calendar year. The employee has participated in the 125 plan, and has made YTD salary deferral contributions in excess of claims submitted for the DCAP and Medical FSA portions of the plan. Can this person, after promotion, submit claims that pertain to child care and medical services after June 1 in order to use up the remaining funds in his spending accounts, or can he only submit claims for pre-June 1 medical and child care?

Can someone tell me if a defaulted loan which has been treated as a deemed distribution with applicable taxes withheld at actual distribution to the participant of account balance be reported on Schedule I Question 2 g.

I DEAL WITH LABOR UNIONS THAT SPONSOR FRINGE BENEFIT PLANS FOR IT'S MEMBERS.

CAN ANYONE TELL ME WHAT IS THE MOST COMMON TYPES OF 501c PLANS THESE FRINGE BENEFIT PLANS WILL FALL UNDER AD WHAT TYPE OF FORM THE LABOR UNION GENERAL FUND WILL HAVE TO FILE.

SOME OF MY CLIENTS ARE MULTIEMPLOYER BENEFIT PLANS WHO SPONSOR POLITICAL ACTION COMMITTEES.

CAN ANYONE GIVE ME AN IDEA WHAT FORM I WOULD HAVE TO FILE FOR THESE TYPE OF COMMITTEES?

THANK YOU.

Did anyone else out there in ERISA land laugh at PwC? They are changing their name to "Monday". I don't know if I want to work with a consultant who is always "Monday".

Here it is June . . . I am modifying the statement design for a plan, and in testing the statement I come across a participant who deferred $10,710 during 2001! How could I have missed this! Fortunately, about $220 came in at the beginning of the 2002 plan year.

At least I hope that's fortunate . . . can deferrals be recharacterized for the new plan year?

Hi-

I have a plan that had to put in a top-heavy contribution for the plan year ended 12/31/01. The company put only the 3% top- heavy contribution in - no other employer money was given. To receive the top-heavy contribution participants had to be there on the last day of the plan year.

For schedule T can I check off d one questions 3 or do I need to run the ratio on question 4?

Thank You!!!

Plan sponsor has filed for bankruptcy and has no money to fund the money purchase plan contribution for 9/30/01 PYE. Too late to file for minimum funding waiver. Corporate tax return has not been filed yet. Would the trustee (owner) ultimately be responsible for the contribution? Any options available to plan sponsor?

Reg. section 1.415-2(B) states that the limitation year is the calendar year, unless an election is made to change the limitation year. Section 1.415-2(B)(2) states that the method of election is by the "adoption of a written resolution by the employer".

In my case, my client, a local government, adopted a plan with a non-calendar year limitation year. The board of supervisors adopted the plan (which defines the limitation year as a fiscal year) but did not specifically "elect" a non-calendar year limitation year.

Does anyone know if a resolution which generally adopts the plan will qualify as an election to change the limitation year? I have not been able to find any additional guidance on this issue. Any insights would be appreciated.

One of the owners of an S-Corp is thinking about donating some of his stock to a public charity. Public charity would then sell the stock back to the ESOP that is sponsored by the S-Corp. Can this be done?

I have a plan sponsor that has asked whether or not it is permissible to allow for post tax contributions under his qualified retirement plan. The plan is a 401(k) with employee and match contributions. The document allows for post tax contributions. The custodian will accept these contributions as a money source. I am unfamiliar with the non-discrimination testing as it pertains to the post tax contributions. Coud somebody please highlight for me those tests that are required and possibly point me to a good resource?

Thanks in Advance...

It appears that Relius can not calculate mid year entry dates when processing an annual valuation (i.e. a 07/01/01 entry date when processing a 12/31/01 eligibility transaction)

If this is so, then this is a problem.

The work around appears to be removing the hours requirement from plan specs and then running eligibility OR hand calculating mid year entry dates and then manually entering them.

Any other ideas and/or comments.

Does anyone know if you can piggyback reports within Crystal Reports?

We just terminated a 401k plan and received a favorable determination letter. Is there a time frame during which we have to distribute participant accounts? (e.g. 120 days). Thanks.

Since it is a DC plan, I'm thinking yes, but I've never seen a target be participant-directed.

Any reasons why it shouldn't be?

In light of the fact that the IRS now considers Health Care FSA's with 100+ participants to be a welfare benefit plan, and should file a Form 5500, but has suspended the requirement to file Schedule F, does anyone know if there is another Schedule that should be filed?

Sorry about the structure of that question, it's the equivalent of a grammatical train wreck.

Any help would be greatly appreciated. Thanks

If we have a plan that has a 401(k) feature with a 3% safe harbor contribution, can we use that contribution to satisfy the minimum allocation gateway under either of the following examples:

1. Employer contributes the 3% safe harbor contribution and an additional 1% discretionary contribution to the NHCEs. Can the HCEs receive a 12% (4% X 3) contribution assuming the equivalent benefit accrual rate test is met.

2. Employer contributes the 3% safe harbor contribution and an additional 2% discretionary contribution to the NHCEs. Can the HCEs receive the maximum contribution which allows them to satisfy the equivalent benefit accrual rate test?

Does the vesting requirements of the additional discretionary contribution affect the answer?

Thank you.

When a 401(k) plan is amended to add SIMPLE provisions, would prior profit sharing or match contributions have to be vested 100%? Would you be able to keep the prior contributions under the plan's vesting schedule and use any forfeitures that may occur to reduce the contribution deposit to be made for the SIMPLE match or SIMPLE ps contributions?

We have a leveraged ESOP where the original bank debt and ESOP debt are the same. Both have variable interest rates and different payment terms. What would be the tax deduction, based on the following facts:

Bank loan:

principle payments - 750,000

interest payments- 365,000

ESOP loan (15 yr loan):

principle payments - 126,000

interest payments - 390,000

Compensation expense (based on P&I method of amortization for calculation of release of shares):

FMV basis of shares released - 250,000

cost basis of shares released - 270,000

-David