What are the current differences between an Age Weighted DC plan --and-- a New Comparability DC plan ?

I realize that new comparability plans will be subject to new rules in year 2002 ... but that's not my concern at the moment.

I thought that for years prior to 2002, an age weighted plan and a new comparability plan were exactly the same thing. But a year 2001 adoption agreement (which I just saw) gives a choice of either an age-weighted allocation OR a new comparability allocation.

Please don't laugh at my ignorance (I'm just confused ... very confused!)

THANKS

Has anybody focused on states that have income tax codes that are not automatically updated for changes in the federal income tax code -- specifically, what steps a retirement plan sponsor might need to take if the plan uses the higher EGTRRA contribution limits but thereby causes some participants to have taxable income?

An article with details is here:

http://www.benefitslink.com/articles/egtrrastate.shtml

I'm particularly interested to know whether anybody has seen a state income tax authority threaten a plan with "disqualification" for state income tax purposes due to a mismatch between the plan's current operation or terms and the terms of the federal income tax code as of the earlier snapshot date used by the state for incorporating federal income tax rules. Fidelity raised this possibility in a report I saw. It would seem to be a draconian penalty but in theory the argument seems to hold up.

Did anyone take the exam on 12/5?

What did you think?

Has anyone done a self correction for an employer who mistakenly made 401(k) contributions (deferrals and match) for non-union employees to a union plan? The employer would want to move the accounts from the union plan to the non-union plan. Is anyone comfortable with this approach? The mistakes have been made for about 18 months (so under 2 year self correction period).

Could anybody recommend a company for producing plan documents for self-funded health plans? I know of Corbel, and am wondering if there are any other companies that produce plan documents, amendments, etc.

If an employee is terminated, can the employer, with the acceptance of the employee, take on his/her last paycheck the remaining FSA benefits for the full plan year? This would allow the terminated employee to use FSA benefits through the plan year. If so, can you furnish an IRS ruling or court case to back this up.

In prior legislation it was not possible to rollover SAR-SEP money into a 401(k) Plan. Has that changed under EGTRRA? Can a SAR-SEP now open a new 401(k) document and transfer their SAR-SEP balances to the 401(k) Plan?

Is it true that some states will not recognize, as deductions from state income taxes, the full amount of the new EGTRRA contribution limits?

Wouldn't ERISA preempt any contrary state income tax laws??

My question regards the new Section 404 rules that will go into effect 2002 and their application for a company with a taxable year-end other than December 31.

Under the old law, employee deferrals + employer contributions could not exceed 15% of gross pay, gross pay for this purpose being gross pay after the employee deferral. In 2002, the limit is increased to 25% and will no longer include employee deferrals.

Our company's taxable year end is June 30 and I have always applied the 404 test to this fiscal year. When will my company be able to take advantage of the 2002 change?

(1) Do I have to wait until July 1, 2002 for the beginning of the company's new tax year? (2) Can I use the beginning of the new Plan year, which is January 1, 2002? (3) Do I do some type of weighted average between the taxable year of the company and the Plan year?

I have read somewhere that timing your good faith EGTRRA amendment may raise cutback issues with regard to top-heavy contributions, if the amendment allowing use of matching contributions to satisfy top-heavy rules takes effect prior to the last day of the 2002 plan year.

Can anyone clarify?

2 part qeustion

is 407 the correct ERISA section that covers 10% concentration levels at time of purchase of employer securities held in a plan trust fund.

what is required of a fiduciary/investment manager if the concentration levels go above 10% because of market fluctuations. must you sell the amount necessary to return to the 10% limit, what if selling in a down market would be imprudent?

Can a one person employer (whether PC, Sub S or Sole Proprietor)-- with no employees -- establish a Safe Harbor 401(k) for himself in order to max out on contributions?

It seems that the new legislation may have removed the reduction in contribution limit in the year following the year of the withdrawal. Much of the background discussion seems to lend itself to the 6 month suspension as an adequate remedy. Does anyone have a thought on this matter? Do you feel the reduction in contributions has been repealed? If not, is the reduction based on pre and post hardship participation within the same limitation year, i.e., participate until 3/1, suspend until 9/1 having taken the hardship 3/1, and participate again until the end of the year.... your thoughts or places this is addressed would be appreciated.

In the year following a merger, do you look back to the income of the individuals at the acquired company. Or, do you only look at current year's income and don not consider the income earned at the acquired

In determining who is a HCE in the first year after a M&A, do you use the compensation the individual earned at the prior company or can you ignor that year's income and use this year's income.

Is there a cite (rather than the related employer references in IRC 1.415-2(d)(6)) that expounds on the use of compensation from a prior employer?

Specifically, what ownership percentage of a prior employer must a 100% shareholder of a current employer own in order to count the compensation from the prior employer for 415?

These corporations never existed together on the same day, and therefore never constituted a controlled group, or affiliated service group.

CAN YOU IMPOSE "LAST DAY OF THE PLAN YEAR " FOR A CONTRIBUTION TO A SAFE HARBOR PLAN? ALSO, IS THERE AN ISSUE IF THE PLAN DOCUMENT IS STAND. OR NON-STAND.?

THANKS!!!

What is the deadline to amend and restate a 403(B) to comply with GUST? Is it the same as the deadline for other prototype and volume submitter documents. p.s. we will be using a prototype document.

A per diem employee took a loan from their 401(k) plan. The employee does not work consistently and is unable to make the loan repayments. She has not made any loan repayments yet. I was thinking of putting the loan into default (which is what the employee would like) but is this ok??? It seems like the employee never planned on paying the loan back and wanted an in-service withdrawal, which isn't allowed per the plan document. What should I do???

We have a plan with 2 HCE's. They are the only employees of the company. One is much younger than the other. In order to meet each participants goals, I'm wondering if using separate benefit formula's would fly? Thanks in advance for any help.