What are the potential consequences for a plan that terminates without the plan sponsor having made some Match contributions that were accrued in prior years?

Specifically, the client accrued Match contributions for 2000 and 2001. The client is now bankrupt and the plan administrator will not fund those amounts.

Is the 2000 5500 considered incorrect, and if so should it be amended? Is there an issue with participants who were paid based on account balances that included the never-to-be deposited receivables? Multiple Use testing would change.

Any other problem areas to be aware of?

Thanks.

My client wanted its employees to become eligible to make 401k deferrals immediately upon date of hire; but only to be eligible to receive an allocation of the discretionary profit sharing contribution upon satisfying 1-year of service and reaching entry date. In other words, the plan provides for different eligibility and entry dates for the P/S and 401k features.

The plan became top-heavy for the 2002 plan year. Do those employees who entered the 401k portion of the plan, but not the P/S portion, have to be provided the top heavy minimum?

Are 401k catchup contributions taken into account in the cross-tested calculations?

It appears that many governmental plans permit an annuitant to withhold a flat dollar amount for income tax withholding from his or her annuity. However, Form W-4P and its instructions require that if the annuitant wants income tax to be withheld that he or she must designate withholding allowances on the W-4P and may have an additional flat amount withheld. The instructions say that "current law" does not permit you to only specify a flat amount.

Any theories as to why a flat withholding amount is apparently not permitted except as an additional amount? Are plan adminstrators familar with this provision and have they decided not to offer a flat dollar amount for withhholding?

I got a request for help from the former COO of a former client.

(The company was merged into another)

Are there any regs. to point to to fix this problem.

The Company switched carriers for Medical and Dental, which were both with the same carrier. The COBRA participant (who had both medical and dental) was never given the choice on the new Dental plan only on the Medical. He is getting no where with the benefit office of the employer to get him into the new dental plan any suggestions, short of an attorney

Thank You EJCII

I was wondering if anyone out there would mind sharing the spreadsheet they use for a plan's account summary/income statement. I don't care for the one I am currently using and I am hoping to save a little time this way. Thanks!

Client would like to establish a SEP for 2001, but......

Client had a calendar year DB plan that was terminated in 2000. There was a contribution due for 2000 that was not put into the plan until after September 15, 2001. That contribution is being taken as a deduction on the client's 2001 personal return.

The instructions to Form 5305-SEP say you may not use the 5305-SEP if you currently maintain any other qualified retirement plan.

Is the above client considered to be 'maintaining'

a qualified plan for 2001 and therefore unable to set up the SEP?

Thanks in advance.

It is my understanding that the substantial risk of forfeiture associated with NQDCP is tied to the Plan Sponsor even if that Plan Sponsor is a subsidiary of a larger parent.

1. So, does this mean that if the Sub goes bankrupt and the Parent remains solvent, that participants risk forfeiture?

2. If the Parent goes bankrupt, does this mean that the Sub has de facto gone bankrupt also and that participants risk forfeiture?

Anybody know anything about these? I briefly skimmed the 1099 instructions and nothing jumped out at me, but I could have easily zipped right by. Basically, I wanted to find out if these can be filed electronically by the payor, and if so, what documentation still has to be sent to the participant. Thanks!

In 1999 a participant terminated and defaulted on his loan. A 1999 1099-R was issued to him reporting the loan default. In 2000 the participant was paid out and two 1099's were issued to him. One for the Rollover and one for the loan default (again).

The participant filed their 2000 tax return based on this information. How is the incorrect 1099-R corrected for the loan default that got 1099ed twice?? Does he need to refile his 2000 tax return???

Are after-tax contributions to a 401(k) plan subject to 402(g) limitations? Can someone provide me with a reference because I can't seem to find a specific notation?

Thanks!

Does a former plan participant have the same right to view the SPD and 5500 as a current participant? This person has taken a total distribution and is out of the plan.

HELP!!!!!!!!!

I have a situation whereI need to coordinate payout of vested 457(f) funds to a terminated participant.

What I need to know is... who pays the plan Trustee or the employer?

Basically, is it up to the employer's desgression or must it be one way or the other?

Need an answer yesterday

I am looking for the formula to calculate half self employment tax for a sole prop by hand. I haven't had any luck on the web as of yet. The only thing I have found was some hand scribbled notes that showed the following:

Net Schedule C income = 152397.00

76200*.0765=5829.30

76197*.0145=1104.86

5829.30+1104.86=6934.16=1/2 SE

I am hoping some one could verify its correct before I used it. I assume the 76200 is used because its the taxable wage base for 2000, it is just coincidental that it is nearly half of the total net schedule C and not some sort of 1/2 calculation. So if the above example was 65000.00 of net Schedule C, the calculation would of been 65000*.0765=4972.50

I have a client that maintains three separate holding companies. Each holding company operates a single business. Each separate business maintains a qualified plan. Each qualified plan holds stock in each of the three holding companies. The fiduciary is an individual shareholder in each of the three holding companies. A U.S. government agency is requiring the three holding companies to merge into a single holding company. An independent appraisal will be conducted, after which the new holding company stock will be exchanged for the current holding companies' stock.

The fiduciary will be asked to vote on the merger of the current holding companies into the surviving holding company.

While this sounds terribly confusing, I wanted to know if there were PT issues. I have already spoken to the DOL (Exemptions) and National IRS and they informally indicated that so long as an independent valuation was performed, the fiduciary could vote for the merger.

Any thoughts? Thanks. Ed

Can a controlled group of employers adopt a SIMPLE IRA plan solely for its union employees? The model IRS form allows exclusion of union but not non-union. any thoughts?

Are there any specific laws on whether an employer can deduct employee's work clothes (professional business attire specifically relating to the job)? I have found rules from the employees perspective, but not vice versa. If so, how would this apply to a non-proft organization?

I am new to the retirement plan market. Is there any online resources like serch401k.com only 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.

Am I correct in assuming that with the new regs a 401k profit sharing plan that previously had a joint and survivor annuity clause, can now amend the plan to provide only for a lump sum distribution thereby making it possible to avoid the need to have spousal consent for a distribution? The plan does require that the spouse must be the beneficiary in case of death unless the spouse waives that beneficiary right.

We have Non-US citizens enrolled in non-qualified savings & retirement plans that hold investments in funds that are domiciled offshore. The investments are not registered by the SEC in the US, nor by the Canadian counter-part to the SEC.

Our current problem: When we transfer these Non-US citizens to the US for a short year or two they come with exisiting balances in these savings & retirement plans. Our offshore administrator, will not allow the employees to move or change their investment mix on these prior balances, nor will distribute any fund information to them while they are in the US or Canada.

Any ideas of what other companies are doing would be helpful.

Ann