We are having problem with importing plans back on to our network. 2 of us work remotely and must import our plans back on to the network after they are complete. The first 2 problems we had were with census notes for a participant in plan ABC getting imported into plan spec notes for plan XYZ. Not a critical problem but annoying.

Now we have an incident were employer 123 was eliminated from the employer list and the plan for employer 123 was assigned to employer 789. Employer 789's employer information is now in the plan specs for plan 123. This is a big problem!! :eek:

Is anyone else having problems with corruption of data after importing plans?????? Please respond and also please let Relius Support know.

I know this plan import thing is tricky and we try to carefully review all the conflict messages we get when importing.

How do you handle a situation when an employer either withholds to much or not enough from an employees annual pay (for health or dependent care FSA) with respect to what the employee actually elected?

If the employer withheld to much from an employees pay, would you issue a 1099-R for the prior year or include it in the employees current year pay. What do you do if the employer did not withhold enough of their pay in the prior year?

Thanks,

Joe

It seems intuitive that you need to proivde a Notice to Interested Parties for a Form 6406 filing, and the forms asks if you have, but I cannot seem to find the reference for the requirement. Can someone help me out with a reference?

When doing a top-heavy test, to determine the officer limit, do you count employees that were employed at any time during the plan year, or only those that were employed on the determination date? For example:

Say there are 10 officers (with $130,000 in comp.) in a plan with a determination date of 12/31/01.

The employer has 50 active employees on 12/31/01.

The employer has 10 employees that terminated on 1/15/01.

Those 60 are the only employees employed at any time during 2001.

How many key employees are counted due to being officers, 5 or 6?

For this purpose, assume that all 60 worked the full year in 2000.

Also, change the above so that, after 10 employees terminate on 1/15/01, 10 new employees are hired 1/31/01. Then 10 more employees who worked in 2000 terminate employment on 2/28/01.

Would this increase the number of officers counted to 7 (since 70 employees worked at some time during the 2001 calendar year, even though the employer never had more than 60 employees at any one time)?

Participant elected a direct rollover of his entire account, which included employer securities (publicly traded). The plan transferred the cash and stock directly to his designated IRA. The IRA accepted the cash but refused the stock and mailed the certificates back to the employer.

Total account balance exceeded $5000. Stock that was returned is less than $5000.

What can the employer do to fully distribute this account?

Thanks.

For a sole proprietor who wants to discontinue his Keogh Plan and start a 401(k) Plan, are there any restrictions to rolling the Keogh IRA assets into the 401(k) plan once it is established?

Specifically, does the Keogh have to be officially terminated? Or can the 401(k) plan be set up and then once established, simply complete an IRA rollover into the plan?

Thanks.

Ok, it's not as exciting as waiting for the 2003 car models, but the new 2001 forms are now available at www.dol.gov/dol/pwba

Click on Forms/Documents then Annual Form 5500 Series.

Can a 52 year old owner who is only allowed to put in 7% due to testing still put in an extra $1,000 with the catch up provision? I would have to say yes, but would like some confirmation! Thanks!

An ESOP is invested in employer securities which although traded on the OTCBB are not considered "readily tradable on an established securites market". The stock is currently valued by an independent appraiser as of 1/1 and this value has been used for the purchase price on the put obligation (distribution dates are not tied to the valuation date) and all other transaction pursuant to IRC 401(a)(28). Apparently, there is an accounting issue in using the 1/1 appraised value because of the OTCBB trading activity. Has anyone encountered this issue before? Will an appraiser approve a valuation bring-down based on a formula incorporating trading activity?

Is a Form 5500 required for 457 plans?

Basic question I know, but I'm not familar with govt. plans at all and I can't find any specific guidance. :confused:

Hey,

I've always been interested in investing, and i have been investing for a while.

Where do i start a Roth IRA?

Please email me with a response or post it here.

I've read that starting a Roth very early, at my age, can lead to a millionaire....

Brett

Under Code section 409(e), voting rights must be passed thru to participants with respect to a sale of "substantially all assets of a trade or business". What constitutes "substantially all"? Is it 85% of the assets? What if corporation has four divisions; each division makes up 25% of corporation's assets. Corporation sells entire business of one division. Is this the sale of "substantially all of the assets of a trade or business" of the corporation?

If a plan were disqualified. That is all plan assets were to be distributed, no further contributions could be made; I assume all participants are fully vested but what happens to plan assets.

Are they distributed directly to the participants or are they rolled over into IRAs?

If they are distributed to participants is their a time period where they must either roll over or pay tax.

Are they allowed to roll over.

I'm getting involved with a take-over 401(k) Plan. One thing bothering me, which I've never seen, is the following match:

25% on the first 3%

50% on the next 3%

The prototype we use says the matching percentage must decrease as the % of comp increases.

Can't find any regs which make the above formula "illegal", though I bet it makes passing ACP more difficult.

Anyone?

Chip Brown

For all those who have asked, the Governmental Plans Answer Book is here at last! In deference to this board's policy against commercial messages, I'll avoid further description (wouldn't do to have my own post reported to me as moderator! ), but given all the questions I've gotten, I thought I'd respond in one central location.

A client of ours has an employee who became a member of an eligible class of employees during the plan year. The plan document says he is immediately eligible to participate if he meets the age and service requirements, which he does. During the time he was a member of the eligible class he only worked 875 hours, but if you count his prior hours, he would be well over the 1,000 hours. Do his hours prior to him becoming part of the eligible count toward his eligibility for a current year contribution and allocation of forfeitures? Also does his salary before his eligibility count?

For 401(a)(4) testing, the plan will be restructured into component plans A and B. The plan has 3 HCEs and 5 NHCEs. One of the HCEs is excluded from participation by the plan document. Component plan A will have 1 HCE and 2 NHCEs. Component plan B will have 1 HCE and 2 NHCEs. I assume that the excluded HCE may be assigned to either of the component plans. Is this correct?

Both component plans must pass 410(B) coverage on their own. In testing component plan A for coverage I assume that I include participants in both component plans in the test, but with only the participants in component plan A as benefiting. Is this correct? Also, in testing the component plan for coverage, are all options available (70% and ABT)? In performing the ABT for a component plan, is the ABT test preformed as if the component plan was the only plan, or are all component plans aggregated for the ABT.

When performing rate group testing on a component plan, are there any special rules that I should be aware of? When testing component plans, each employee is cherry-picked for one component plan or the other. Does this make the classification not "reasonable", therefore the rate group must pass 70% and not the mid-point %?

Also, in performing rate group testing for component plan A, I assume that I include all participants (including component plan (B) in the rate group test, but with all participants in component plan B as a 0% benefit. Is this correct?

Thanks.

I wonder if the SSLI factor and the ERF created by our adminstrative system is are both actually ERFs (Ns over Ns). Could someone take a look at this and tell me what you think?

First of all, I have noticed that the administrative factors system creates "Social Security Level Income Option" (SSLI factor) from the same screen as actuarial "Early Retirement Factors" (ERFs).

If I calculate ERFs for unreduced benefits at age 62 using 5.78% and GAM83U, the age 60 ERF = .84475, whereas the age 60 SSLI factor = .83887 (so they are very close). For ERFs with unreduced benefits at age 62, the ERF at 62 is obviously = 1. The SSLI factor (for age 62 level income option) at age 62 = .99304, and at 62 and 1 month = 1. This makes me wonder if the SSLI factor is actually an actuarial ERF with unreduced benefits at age 62 and 1 month.

I believe the use of the SSLI factor we produce is as follows: The estimated age 62 PIA amount is $1300 and the early retirement benefit for a participant is $600 as a single life annuity at age 60. The Social Security Level Income Option at age 62 would produce an amount payable at age 62 of $1300 x .83887 +$600 - $1300 = $390.53. The amount payable from age 60 to age 62 = $1300 + $390.53 = $1690.53.

Thanks for any comments.

If a employer appears to have gone bankrupt due to

insufficient funds, there has been no formal termination of the plan, there is nobody to contact as their phone number is disconnected AND

participants are wanting their money, what should you do? It is our understanding that distributions do not automatically occur. Thanks for any input on the issue.

We employ the safe harbor rules regarding 401(k) hardship withdrawals. A participant has requested a withdrawal for the purchase of a primary residence, which is an existing house in need of repairs. In addition to requesting the cash needed at closing, he is also asking for an amount necessary for roof repairs and painting. Under our past procedures we would not approve a withdrawal for household repairs - for a home already owned by the participant. We would, however, approve a withdrawal for building a home - including roofing and painting. And, certainly, if the participant could structure the deal so that the repairs would be paid by the seller and and added to the sales price, then they would be eligible for hardship withdrawal. My question: Are we permitted to treat home repairs (at the time of purchase) as part of the purchase price, making their cost eligible for hardship withdrawal?