Can expatriots participate in a 403(B) plan? If not, the company is interested in providing something to the expatriots to make up for any lost benefits. Any suggestions?

Thanks.

I've run into the situation described below:

Plan document states that ER Match forfeitures are used to reduce the match contribution in the year of the forfeiture. At 12/31/01 there is an $18,000 balance. The match formula is not discretionary and the match was fully funded by 12/31/01. (The forfeitures were not used to reduce the contribution.) In addition, the plan held about $17,000 in forfeitures at 12/31/00. Again they were not used to reduce the match.

I feel this plan was overfunded on 12/31/00 and 12/31/01 and is subject to an excise tax. Also, I would assume the total 12/31/01 match amount deposited is not deductible.

A suggestion was made to cut a check back to the employer for the amount of the forfeiture account. Isn't this a reversion of assets?

Any advice would be greatly appreciated.

Is the IRS still pondering the question of allowing elimination of optional forms of benefit under DB Plans? I remember reading something, somewhere, that they may revisit this issue or maybe even propose some regs in 2003. Has anyone heard this as well?

A calendar year plan currently has the following benefit accrual requirements for sharing in the profit sharing contribution:

1- those participants who are employed on the last day of the year --> shall share in the profit sharing with no hours requirement.

2- those participants who are NOT employed on the last day of the year --> shall only share in the profit sharing if they completed at least 500 hours during the plan year.

The employer wishes to amend the plan to the following benefit accrual requirements:

1- those participants who are employed on the last day of the year --> must complete at least 500 hours during the plan year to share in the profit sharing.

2- those participants who are NOT employed on the last day of the year --> shall NOT share in the profit sharing, regardless of hours worked.

Due to anti-cutback, must the employer wait until the plan year beginning 1/1/2003 to make both of these changes? Or, since it is unlikely that anyone has completed 500 hours of service yet this year, can the second benefit accrual requirement be amended effective this year?

Thanks.

IRS personnel have stated that given the recent legislative changes, a participant can defer the maximum limit under 402(g) AND have up to 40,000 or 100% of compensation contributed to a defined contribution plan. I don't see anything in 415© that takes elective deferrals out of the definition of "annual addition". It would seem to me that if a participant deferred 11,000 in 2002 he could only have an additional 29,000 contributed to the plan on his behalf. Am I missing something or did the IRS personnel think (possibly) that the 404 change was across the board??? Thanks for your input.

I discovered a new client was top heavy in 2000 but did not make the required top heavy minimum contribution.

Client will self-correct in 2002 by making contribution and gain from 12/31/2000 through point of deposit (1/31/02).

Question: Is this deductible under IRC 404 in 2002 as long as it does not violate IRC 415?

Rev Procedure 2001-17 section 6.02 (4) refers to "normal rules of section 404"

Are they referring to the 2000 plan year or the 2002 plan year?

Thank you

:confused:

Enlightening article from Barry Picker- see the follwing link

http://www.bpickercpa.com/articles/failed.....conversion.htm

I opened a roth ira in 1999 with $2000. contributed $2000 in 2000 also. (total $4000). i took a distribution in 2001 for $2000. i am under 59 1/2. I was under impression that i could withdraw principal if under 59 1/2. thought penalty was only on earnings. please clarify?

thanks

I have a case in which the participant died, his wife had already passed away, and he's left his 5 children as the beneficiaries. One of those children had also previously died, so should that child's spouse receive his share of the money or would the money only be split amongst the 4 surviving children?

I am running 2001 ACP testing. Even though our 403(B) allows employees to participate immediately, if I understand it correctly, I can exclude those nonhighly compensated employees who are under 21 and have less than one year of service when running the ACP test. We use current year testing, so I am still confused as to what I would do with those highly compensated employees who are hired in 2001, but have no income in 2000. I would have to include them, but how?? Could you help me? I'm really confused!

An employer contributed too many matching dollars to SIMPLE IRA's for two employees. All of this was for the 2001 tax year and the employer was doing the dollar per dollar match up to 3% of compensation and the two employees had much less in compensation than expected.

How can we undo this without problems and penalties? The mutual fund company holding the SIMPLE IRA's claims that we have to pull the money out of the SIMPLEs by law but the withdrawal will be considered a taxable distribution from an IRA that's subject to taxes and an extra 10% penalty because the employees are younger than 59 1/2. Isn't there a better way?

Thanks for any help.

I understand that the UAL ESOP is comprised of three component plans. Am I correct that only component plans 1 and 2 form qualified plans. UAL has indicated that component plan 3 is a nonqualified plan, not subject to QDROs. I have been unable to locate a copy of the UAL ESOP. Thanks for your assistance. Ed

Last week an efiling company called regarding the federal employer ID number (FEIN) we used on a 2001 Form 1099-R. They were efiling a former participant's 2001 1040 and the FEIN was rejected because it did not match the employer name. We took this plan over from a bank several years ago and I think we just continued to use the trust ID the bank entered on Schedule P. I suspect that this trust ID number is the bank's, not one applied for in the employer's name. Is anyone aware of a resource I can use to verify the name associated with a particular FEIN/trust number? Thanks. Maverick

Plan excludes an eligible employee for several years. Debatable whether the error is significant. If sponsor decides to be conservative and file with the IRS, what is the filing fee? I have never had to file and I am having difficulty understanding the fee. It seems to me for fewer than 10 participants it is somewhere between $2,000 and $4,000. That seems extremely high.

Assume sponsor is aggressive and just relies on self correction. The IRS later audits and determines error is siginificant and sponsor couldn't self-correct. My research suggests that IRS would probably just resolve under Audit CAP. The correction has already been made. Assuming the IRS accepts the correction already made, what is the potential penalty amount? Cost of correction is about $20,000.

Thanks for any help.

This is the situation: Employer owner, about two years ago, created a subsidiary to have a separation between union and non-union employees. the 401K for the subsidiary was established (I don't know why)only for non-union employees, the same as the other plan. Now the owner(s) want to merge the two plans since they operate exactly the same way. Can this be done? What are the implications? Any comments are more than welcome.

I have a participant that paid for 2002 dependent care expenses in December of 2001. What year does this get filed under?

Is anyone aware of any research/surveys that track the average lenght of time that it takes for pension administration firms to:

1. Remit plan deposits once received

2. Send out participant distribution forms.

3. Pay out participants once distribution forms are returned.

I know what our timeframes are & am curious as to what the "industry" numbers are. If anyone could share their own experiences that would be great also. Thanks!

I have a 401k plan at work and a regular IRA funded through years of self employment. Last year I had 14000k of outside income reported on 1099s (outside commissions). Can I fund my regular IRA up to 3000 this year as I am over 55? (I already did so for 2002 and just want to make sure I am not making a mistake)

apologies if this has been asked but a scan of the threads did not show this variation.

In 1999 we contributed $2000 into a Roth IRA account. The company stock we purchased went bankrupt. Are investment losses in Roth IRAs tax deductible since the contributions are with already taxed money? What are the tax laws on losses in investment retirement accounts?

Thanks.

Can licensed Real Estate agents and/or Independent Contractors participate in an "employers" group health plan and also use the section 125 Cafeteria plan to pre-tax their portion of the premium?