unfortunately, not a 401k issue but don't know where i would otherwise post this:

March 19th, 2002 the client calls and says he sold all assets of the biz to another unrelated company (12/21/01). Now he wants to make a pension contribution. All employees either terminated or went to work for new co. on that date. (Begs the question as to where the money would come from now that company has no assets.)

MP & PS both contained a last day rule. Can last day rule be amended out now? Was 3/15/02 the deadline for the MP Plan with effect on min funding standards? Could PS be amended now (till 9/15) or is that only for disqualifying defects, which this is not....

any thoughts would be appreciated. thanks

Let's say we have a start-up 2001 calendar year Plan. Assume we have an officer that is earning around $90,000. I believe he would be a key employee for determining if they are top-heavy for the start-up year 2001. Wouldn't he then be a former key employee in determining if the Plan is top-heavy for 2002 under EGGTRA? The strange part is that we are looking at the same determination date, 12/31/01, and the same 2001 census data in determining his key employee status for both Plan year's top-heavy tests.

A partner withdrew more money in 2000 than was eventually allocated to him as income for 2000. His 2000 K-1 shows a negative capital account of $7000. He quit in December 2000.

For 2001, the CPA prepared him a K-1, showing earned income equal to the $7000 negative capital account. He did not work at all in 2001. The doc says that a terminated participant gets a contribution if they work even 1 hour. He worked "0" in 2001. Will they have to make a contribution for him, if this $7000 shows on the earned income line of his K-1. Is this like the severance issue????? Thanks

The highly compensated in this plan only puts in after tax money, I've been told that no adp/acp testing has to be done. Is that right? Based on the ACP test the highly compensated have refunds coming.

3 Safe harbor questions -

1. Notice 2000-3 allows a plan using the safe harbor matching contribution to reduce or eliminate the matching contributions provided the proper notification is met and then test under ADP/ACP.

What if a plan is using an enhanced s-h match but wants to reduce it to the basic s-h match? Seems like if they can do the above, they could do this, provided proper notification is given?

2. S-H match can be made annually or on a payroll basis. Using a payroll basis can avoid the true-up situations as long as that basis is at least quarterly and the match made by the end of the following quarter.

What about a plan that makes the s-h match semi-annually? Is this O.K but they need to take into consideration true-ups at the end of the year?

3. Anyone seen any additional guidance re- corporate or plan mergers and s-h? For example an employer has a MPP and 401(k) and they use the MPP to satisfy s-h but want to merge the 2 plans mid-plan year and have the 401(k) provide the s-h contribution. Doesn't seem like participants would be harmed but the s-h Notice that was given for the plan year wouldn't be correct and would this invalidate s-h?

I have an ADP test failure, which the employer wants to correct using a QNEC. According to the document, "the Employer may contribute into the Plan, on behalf of each Non-Highly Compensated Participant, who elects to defer a portion of his Compensation into the Plan for the Plan Year, as provided in Section 3.02 of the Plan, a discretionary Qualified Non-Elective Contribution equal to a uniform percentage of each such eligible inidividual's Compensation, the exact percentage of which, if any, shall be determined by the Employer." In this particular plan year, 7 participants can be placed in the separate "non-statutory" test, which passes (of course since no HCE's). Three of these participants have deferrals. Do I have to allocate the same percentage QNEC to these participants? Of course it is not helping my test by doing so, but adding the 7 participants and doing one complete ADP test makes it fail worse. Help!

How does one find out what a payer's state no. (line 11 of form 1099-R) is? The 1099-R instructions say, "The state number is the payer's identification number assigned by the individual state." What is the process by which an individual state assigns the number? Does the payer apply for a number (similar to applying for a federal EIN)?

One of my clients called me with this question. He has an employee who has been divorced for 10+ years. The trustee has never seen DRO papers and isn't aware that there are any. The employee has decided to quit, cash out and wants to leave the state. The employer thinks that the employee's ex-spouse is going to try to get more money from the employee & so he wants to leave the state before she can. If the trustee has never seen a DRO, does he have any legal reason not to let the employee cash out his account balance?

Are there any not for profit health insurance companies in Texas?

Blue Cross Bs is a mutual company not a non profit if I understand correctly?

For vesting, my Profit Sharing program requires 5 yrs of employment with the company.

I recently heard there is automatic vesting in Profit Sharing programs if the employee is 55 yrs of age or over, regardless of years of employment. Is that correct?

Thank you!

Please provide some feedback on this topic.

I reviewed the previous post on billable hours and I too am in an environment that has billable and non-billable hours.

My previous experience from other TPA shops involved a fee schedule and a stack of work to complete by applicable deadlines.

I am really struggling with the concept of a fee schedule, a stack of work, deadlines, and a billable hours goal.

I am curious to know how many others are out there with hours goals. Are there a standard number of hours per plan? How many billable hours should a person have? I really need some help on this issue! Thanks!

Please provide some feedback on this post. I reviewed the previous post on billable hours and I too am in an environment that has billable and non-billable hours.

My previous experience from other TPA shops involved a fee schedule and a stack of work to complete by applicable deadlines.

I am really struggling with the concept of a fee schedule, a stack of work, deadlines, and a billable hours goal.

I am curious to know how many others are out there with hours goals. Are there a standard number of hours per plan? How many billable hours should a person have? I really need some help on this issue! Thanks!

I am told that some states allow people to convert IRA's to Roth IRA's

without paying a state income tax on the conversion?

Which State allow you to convert an IRA to Roth IRA state income tax Free?

Can someone provide a list of those states?

I realize that these conversions would be subject to a Federal income tax.

Thanks

Larry

Do any states tax pre-tax 125 amounts?

Hello,

Can somebody explain how the owner of an LLC who does not draw W-2 wages participate in a SIMPLE? Is it based on net self-employment earnings similar to what a sole prop can do. Also since there is no "salary" is there a requirement for any type of written documenation similar to a salary reduction agreement.

Thank You.

Brian

A partner of a law firm was a 5% owner on his RBD. However, as he has continued to work into his mid 70s, his ownership interest in the law firm has dropped below 5%. Is he able to stop receiving MRDs until the time that he terminates employment with the law firm? My guess is he can't, but I would appreciate your thoughts. Thanks. Ed

I would like anyone willing to share to inform me on how many days their church gives to lay staff for paid time off (vacation, personal/sick) and how many holiday days they receive in a year. We are in the process of updating our personnel policy and I would like to get an idea of what the average is to fair to all employees. Thanks

I am looking for a sample of a Statement of Compliance to have our DC plans vendor certify to each quarter that they have been administering the plans in accordance with plan and trust documents.

Has anyone done anything similar?

Thanks

Can a former owner of a company make salary deferrals based on compensation received under a non-compete agreement, after his active employment terminates.

Presuming the answer is a resounding "no" is there any specific authority for that answer.

A sole-proprietor (with no employees) set up (I think) a SIMPLE plan during 2001, in which they deferred $250, and nothing else. A call today asks if they can make additional deferrals before April 15 and deduct them on their 2001 Form 1040, as well as making the 3% matching contribution on a higher level of contributions.

I can't find the answer in the SIMPLE answer book, but my feeling is that the elective contributions must be made before the end of the calendar year. Am I right?

Thanks for any answers.

[see below; also see, SIMPLE, SEP, and SARSEP Answer Book Q 4:26 (7th Ed), Q 4:32 (6th Ed). I will add a cross reference or another question in chapter 14. Thank you.)