If a plan sponsor is 9 months late in depositing 401(k) deferrals, and chooses to use the Federal short-term rate + 3 interest rate option, how is this applied? The Federal short-term rate changes quarterly. Should the changes be taken into account?

For example, say the Federal short-term rate + 3 is 8% in the quarter in which the deferrals should have been deposited, 7% for the next quarter, and 9% for the next quarter. Should the 8%, 9% and 7% rates be used? Or should the 8% rate be used for all 9 months?

Has anyone had experience with the DOL on this issue that involved more than one quarter?

We have taken over a plan with a 30 year history. At one time the plan allowed for after-tax contributions, before adding a 401(k) feature and doing away with the after-tax option. The prior recordkeeper will not provide us with an after-tax basis for those participants who still have after-tax balances. My gut feeling is that it was never properly record-kept, so there are no records.

My question is, who is ultimately responsible for this reporting and to what degree should the trustees pursue the information (obtain legal council)? The Trustees are very concerned that Participants may revert to them as not doing their job because these numbers are not available .

Is it ultimately the participant's responsibility to tell the IRS what's taxable and what's not taxable when they finally recieve a distribution?

Thank you.

We have two cross-tested profit sharing plans that for their 2001 calendar plan year, want to retroactvely amend their discretionary contribution allocation formulas. In each case an addtional group would be 'carved out".

One will result in an addtional contribution for a Non-Highly Compensated Employee (over and above the 3% Safe Harbor contribution) and the other results in an additional contribution for a Highly Compensated Participant (over and above a 3% of pay across the board contribution). Neither employer has made a formal approval of the contribution for 2001.

If an employee terminates just prior to the end of a plan year but has deferrals taken out of the final paycheck, which is received in the next plan year, how is testing completed? Say the years are calendar year 2001 and 2002. Are the deferrals received in 2002 counted for ADP testing for 2002 even though the employee terminated in 2001? Are the deferrals counted in the 2001 ADP test even though the paycheck was in 2002? Does the answer affect employees who were eligible to defer during the payroll period, terminated in 2001, and did not defer from the final paycheck (which year's ADP test should include them)? Should the 2002 410(B) coverage test include either of these types of employees? Has the IRS ever provided formal or informal guidance on this issue when a payroll period crosses over a plan year end?

An employee who was terminated for cause won reinstatement along with back pay for all of last year. The question: Can he contribute to 403b and have it count to last year when we pay him his back pay this year? And if he can, how do you report it on his W-2?

Is it legal to have several different Roth IRA's from different providers (started in different years)? Any big benefits to keeping them all together?

A partnership has a profit sharing plan. Each partner participant makes his own Keogh contribution. Each partner participant is free to find & use any broker and investments that he so chooses. The partnership makes a annual discretionary PSP contribution for the regular employee participants..... however, the regular employee participants are not allowed to choose where their share of the discretionary contribution will be invested (the partnership decides where to contribute the discretionary contribution).

Is this an ERISA violation? Can it disqualify the plan ?

Has anyone heard anything on GUST & EGTRRA restatements for DB plans? At ASPA the Service was adamant that apporval would be no later than 1/31/02, however I have not seen any anouncement. I quess we will now have have until at least 3/31/03 to restate DB plans, on prototypes and specimen documents( volume submitters).

Employer checked off (X) NONE on standardized adoption agreement for employer discretionary profit sharing contribution to their 401(k) plan, but then went ahead and made profit sharing contribs for two prior years anyway. What should they do now to correct, if anything. New restated doc is all set going foreword...

Top heavy K plan with discretionary contribution uses the match to satisfy top heavy minimum.

The match used for the top heavy minimum must be tested under 401 (a)(4). Exactly what does this mean?

I understand that the match used for 416 is not a match for 401(m) testing.

Clearly the match used for 416 would be subject to general testing in amounts.

Does it also mean that the match is not a match for benefit, rights, and features, in which case there would be different rates of match?

Can the §415© contribution limits be applied separately for an individual that participates in two unrelated defined contribution plans? For example, John Doe participates in Corp X's Profit Sharing Plan and Corp Y's 401(k) Plan. Corp X and Corp Y are unrelated entities. Assuming Mr. Doe's salary at Corp X is $50,000 and at Corp Y is $75,000 Y for 2002, can $40,000 be contributed to his account in Corp X's Profit Sharing Plan and another $40,000 be contributed to his account in Corp Y's 401(k) Plan for the 2002 plan year?

I have a partnership in which a partner left during the plan year. His profit and capital interests were distributed to the remaining partners. Also, at the same time, the entity changed from a "regular" partnership to an LLP.

According the plan document and IRC Section 708, the partnership has not terminated, thus the plan remains an on-going plan.

My question centers on the measurement of earned income for the plan year. For those partners that remain, I have two K-1's for 2001. One for the "old" partnership and one for the new LLP. Would earned income for the plan year simply be the earned income for each short period during the plan year added together? This seems too simple, but I cannot seem to find any guidance on this.

Question: DoD allows a service member to elect for a one time bonus of $30,000 vice more retirement in the choice of election between a High-3 or the REDUX /Bonus. ( See the OSD military compensation web site at http://militarypay.dtic.mil/actives/retire...ad/19_faqs.html )

How come the military spouse does not have to be consulted?

The retirement is ultimately affected by the service member's choice!

Thanks,

FX

Are fees paid to eg CIBA and other plan groups where plan investment managers meet to hear about the latest and greatest payable from plan assets or only by the plan sponsor?

If a plan has a plan year of 12/1/00 - 11/30/01 and fails the ADP test requirinig refunds to HCE's, would the amount of the deferrals end up on the employees 2000 or 2001 taxes? Deferrals commenced in April of 2001.

is a custodian/fiduciary of ERISA funds liable for adverse results to plan participants in a hostile takeover/proxy voting situation??

What is (or was) the deadline for amending governmental plans for OBRA '93 compensation (IRC 401(a)(17)) and UCA '92 (401(a)(31) direct rollovers)?

Are these two laws considered part of TRA '86?

Thanks.

ER sponsors 401(k) plan with discretionary matching contribution and uses prior year ADP/ACP testing. The plan docs are Volume Submitter. For 2000 calendar PYE it was no match. ER wants to match for 2001. It is my understanding that under PY testing ER can not match in 2002 if docs are VS ( it seems that for prototype docs there is a break until GUST restatement).

Is there any way ER can make matching contributions without violating thr regs? And if ERtakes advantage of the last extended reliance year and switch to current year testing....would ER have to "stick" w/CYtesting?

Thanks....AC

1. Still not clear about the effective date of GUST resatatement we have to specify in the Adoption Agreement and Corporate Rezolution. The Plan Docs incorporate dates by reference; does it matter then if we specify as effectivre date December 97 or January 01, 2001?

2. The IRS does not allows "fail-safe" provisions in "GUSTified" Volme Submitter plan docs (am I right?).

My question: if I restate plans that used fail safe provisions in the past to pass 410(B)- bringing back and giving allocation to participants with less than 1000hrs or not employed in the last day;Is the plan in non compliance by retroactivelly adopting a plan doc that does not have fail safe language?

And even if I use GUST effective date as January 01, 2001...Istill have plans that used fail safe provisions to pass 410(B) in 2001.

Thanks for your input to these two questions.

I did a search on this but only came up with traditional ira's. ok, if one dies with a roth, and leaves it to a child and a grandchild. 50% to each. the child is 40 and the grandchild is 12. Am i correct that each would take distributions over their life expectancy? If they took out more than that, wouldn't it be a taxable event?

thanks