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 Do you feel the reduction in contributions has been repealed?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.

Here’s a topic I haven’t seen addressed yet.

I have a client with a 125 Dependent Care Assistance Plan. This employer has an employee whose elderly mother lives with the family. She has Alzheimer's and cannot care for herself. The employee is the legal guardian for his mother and I believe claims her on his taxes.

Question: Can this employee claim cost for adult day-care for his dependent elderly mother through his employer’s Dependent Care plan?

Is there a specific section of 125 code that says he can or cannot do this? Let me know your opinion.

I am starting a new plan on a standardized prototype document. I realize that I do not have to submit to the IRS for determination. Do I still have to post a Notice to Interested Parties?

How common is it for plan sponsors to charge a fee to terminated participants who leave their 401(k) account in the plan?

Are there any surveys showing what an average annual fee would be?

Can I withdraw my original Roth contribution penalty/tax-free? I rolled over a 403b into an Ira which I then converted to a Roth. I have yet to pay my fourth and final income tax installment this Spring. I am not yet 59.5. Any help would be appreciated.

Hi All

We currently administer a small defined benefit plan with two participants (husband and wife). The plan has been in existence for 5 years and has a $10,000 annual minimum benefit.

My understanding is that any participant with the $10,000 minimum must receive the benefit in the form of an annuity.

What happens if the wife (who has the minimum benefit) dies? Is her primary beneficiary (the husband) prevented from electing to receive her benefit as a lump sum?

Thanks

Section 403(B) arrangement subject to ERISA intends to "terminate." Plan maintains a group annuity and includes employer matching contributions as well as deferrals.

Is a "distributable event" other than "termination" of the arrangement necessary for each participant to roll out of the group annuity and into an individual annuity or custodial account?

If so, is the employer obligated to continue filing Form 5500 Return/Reports until the last participant in the arrangement experiences a "distributable event" and moves his or her money to an individual annuity?

OR can each participant make a trustee to trustee transfer out of the group annuity, to an individual annuity, irrespective of plan termination or any distributable event? (Hence allowing employer to cease reporting duties much sooner.)

If a Divorce Decree orders that a participant's balance in his Defined-Benefit Pension Plan be held as security for his child suppport obligation, upon a qualifying event can the participant withdraw the balance of the account?

My diivorce decree ordered that my ex-husband's balance in his retirement plan be held as security for his child support obligation for as long as there was a child support order (our son is now 11 years old). He was laid off of work in November of 2000 and under the requriements of the Plan, on December 1, 2001 he became eligible to withdraw his funds from his account balance. When I reminded the Plan Administrator of the provision in my Divorce Decree, he said he would check on it and get back to me about it. When he did back to me, he said the entire account balance had been paid out to my ex-husband.

What are my recourses?

Okay, we have our clients primed to take advantage of the new limits (for 2002) under EGTRRA.

Hmmm, what do we do about those who reside in non-conforming states such as Massachusetts, Hawaii or California?

I was talking to a colleague regarding a situation that he is experiencing on the 401k - side of a transaction.  The IRA rollover - side has me wondering if my train of thought is on the right track.  Can anyone refute or substantiate a client's ability to request a recharacterization in this type of situation:

Client Daisy Dasher had participated in her ER's 401k plan and exceeded her calendar year deferral of $10,500 in the Plan Year End (PYE) 2000.  She separated from service in 2001 and elected to rollover her vested account balance to a rollover IRA. Ms. Dasher is not an HCE.

November of 2001, the Year End testing for the 2000 PYE is complete and reveals the excess contribution by Ms. Dasher. 

There are several issues to be taken into consideration:  tax reporting requirement (401k admin or IRA Trustee), accounting for correction within the 401k Trust, Rollover of assets that are not qualified to transfer to an IRA, and other individual tax issues to Ms. Dasher.

Please check my thought process in one possible solution that I devised based on my understanding of both IRA and Qualified Plan regulations:

1)  No Funds Need Be Distributed, Returned - IRA deposit does not need to be voided

2)  401k administrator should void out rollover distribution.  correct systems to reflect a correction/distribution of excess deferrals to participant from the Plan Trust.  re-enter request for rollover distribution for the X dollar amount qualified for rollover and enter the Y remainder as a taxable distribution to the participant.

3)  As long as EE had earned income in 2001 (or) assuming that she will earn wages in 2002:  Ms. Dasher may request the IRA Trustee to Recharacterize the assets received in the rollover.  X dollar amount indicated as a rollover contribution and Y dollar amount recharachterized as either a 2001 or 2002 Traditional IRA Contribution (depending on whether max. 2001 contrib. has been made).  Pre-2002, this account would no longer qualify as a conduit IRA - but post 2002 will be of no mind.

4)  Prior administrator fulfils their duty to correct/report appropriate disposition as to avoid disqualification.  Ms. Dasher and IRA Trustee avoid accelerated taxable

status of IRA assets.

5)  401k ER has excise tax issues to be addressed with Plan Admin.

6)  Ms. Dasher has tax filing issues to be addressed with her qualified tax advisor or accountant.

Is this too simplistic to be make into reality?  Is there an issue with the one check that was sent from the 401k Admin. to the IRA Trustee?  Any other issues that I have forgotten to take into consideration?  What if the distribution had actually occurred in 2000 instead of 2001 and a 1099 Form has been issued?

This is not a real situation for me, but I just have not been able to stop running different "fix-it" scenarios in my mind. I really need to find more interesting things in my life to keep me busy! Please help me sleep again at night!

Can qualified retirement plans require that participants submit to arbitration under the finalized claims procedures regulations issued by the Department of Labor?