Plan year-end is 4/30. Plan is a MP which has been frozen since '99. Vesting is 100% after five years. Forfeitures are reallocated same as ER contribution.

Received a call from client today advising that wrong census data was given to us for plan year ending 4/30/00. Per their original data to us, a participant terminated during the plan year without completing enough hours, thereby forfeiting his account; however, the Company now realizes he did complete enough hours and his account needs to be restored. News every administrator loves hearing. Not. To make participant whole, my thought is to use any forfeitures from the 4/30/01 valuation (hasn't been done yet) and if sufficient to pay him amount he should have received 4/30/00, fine; if not, have the Company make a non-deductible contribution to make him whole. Am I on the right wavelength for this? Secondly, is he entitled to the exact amount due him in '00 or do I figure in earnings/losses up to a current date? Thank you for anticipated help.

For a vesting 401k plan, the employee contributions and their returns vest immediately and the employer matching contributions vest over a period of time. What about the interest and other returns on the employer matching? And if they, too, vest over a period of time, are they held separately from the vested portion of the account? If the account buys different mutual funds, how is it tracked?

I need backup references if possible! Thank you.

One of our employers incorrectly allocated deferral money to employee A rather than employee B. In calculating the correction to make each employee as they would have been had the error not occurred, an "excess gain" occurs. Does anybody have any suggestions of what to do with that extra money? Does it get split between the two employees or does it get forfeited?

I understand that GATT does not apply for purposes of calculating benefit payments, but does it apply for purposes of valuing benefits under Code sec. 415?:confused:

If you satisfy the 5% Minimum Contribution Gateway, can you define your groups in any fashion you want? I have a Plan with 2 HCs and 2 NHCs, but the HCs compensations vary and would justify putting them into seperate groups in order to maximize their benefit.

Thanks,

Joe

I opened a Roth IRA in 1999 for the potential purpose of using the proceeds to purchase a house. It now appears that I may need to purchase a house before the end of the 5-year investment period. So I was trying to see if I could use the funds for the upcoming purchase.

I was told by a friend that I can withdraw my own contributions any time (even during the first 5-years) free of penalties and taxes. Only capital gains would be subject to the rules of the 5-year investment period. Is this true??

Company A's health insurance is run through their cafeteria plan. They have a new employee that doesn’t want to participate in the cafeteria plan, but wants to be part of Company A's health insurance plan. This new employee wants a company that he formerly owned, but is now owned by his former company’s employees to reimburse Company A for the employee’s share of the health insurance premium. There would be no withholding.

Can Company A allow this type of arrangement? Does this effect the cafeteria plan?

Can a Plan compute the soc. sec. benefit (used for purposes of the offset) on the basis or method that assumes that the person terminates due to disability?

That is, the soc. sec. benefit would be computed differently. As I was told, in the determination of AIME, the denominator would no longer be the typical 35 years, but would be based on years up to time of disability. i.e. a much lower number in the denominator.

A plan provides a pension of 1.5% of avg pay per year and offsets it by 2/3 of the age soc sec benefit (with no pro-rate or unit accrual on the offset). As a result the accd benefit is less than zero for short service employees. The offset is computed based only on compensation with the employer.

Does anyone have knowledge or thoughts as to if the Plan can meet 411(B)(1) by doing the test just based on the gross benefit or must the offset be included in the test?. That is as a gross benefit only, it clearly passes 411(B), but tested based on the benefit including the offset, it would fail.

One case (allegedly) supporting the concept of ignoring the offset in the testing is rev ruling 76-259. This ruling, however, refers to offsets of benefits from profit sharing plans.

Look forward to any comments.

Just wondering if anyone has, or is considering, setting up new DB plans with a Jan 2 - Jan 1 Plan Year in order to take advantage of the EGTRRA $ limit increases.

I had an HR director tell me she had read that there was a proposal to allow employers to contribute unused PTO (paid time off) and/or sick leave to a 401k. I think it's a great idea but I have read nothing of this and can see some compliance issues. Just wanted to make sure I hadn't missed something.

I have a question about the ceilings the various states impose on deferred compensation. Is there a resource available to look up all the states' limits in one place?

I have a question about the ceilings the various states impose on deferred compensation. Is there a resource available to look up all the states' limits in one place?

Here is my list of distributions that will NOT legally be rollable into a qualified plan after 2001. Distributions from:

1- a non qualified plan;

2- a qualified plan that has lost its qualification (whether its sponsor knows it or not);

3- an employee's after-tax contributions in a traditional IRA;

4- a qualified plan in the form of periodic payments that are expected to last for the participant's lifetime, or for the participant's lifetime and that of his or her beneficiary, or for a period of 10 years or more;

5- a qualified plan that was a death benefit from other than the participant's spouse;

6- a qualified plan that was to an alternate payee other than from the participant's spouse or ex-spouse's plan as part of a divorce;

7- a qualified plan so that it satisfies the minimum distribution requirements of §401(a)(9);

8- a qualified plan that was a loan deemed to be a distribution under §72(p);

9- a qualified plan that is payment of dividends on employer securities under §404(k);

10- a qualified plan that is a corrective distribution under §402(g), §401(k), §401(m) or §415;

11- a non-governmental §457 plan; and

12- a Roth IRA.

Please let us know of any additions or subtractions that need to be made to this list.

Many school districts are hiring third party firms to come in and audit the 403b programs. Has anyone heard of any teachers' groups that have opposed the self-audits? And if so, what the outcome was, or is likely to be?

Can anyone help me get my hands on a copy of revenue ruling 76-259?

Thank you.

A plan provides a lump sum distribution based on gatt assumptions. However, if lump sum is less than 3,500, it provides a lump sum based on 6% and 71GAM for females, if it results in a larger lump sum.

If plan provides for this, would it not be required to provide lump sums over 3,500 on this basis as well?

Isn't this a 1.417(e)-1(d) requirement?

We have developed our own volume submitter document and have received our opinion letter. We want to develop a searchable data base to automate its production. Does anyone have any suggestions on the best way to go about doing this? We know that there are folks out there with documents and data bases already to go, but we don't want to scrap our document to buy theirs, at least not without checking out the alternatives.

Thanks for any help!

My client has discovered that a member of its controlled group of companies has started and contributed to a SEP. When you look at the controlled group (which the broker did not) the group is ineligible to set up a SEP. An employer contribution has been deposited. How do you correct for an ineligible SEP? Is there any known guidance from the IRS on this?

Do the Section 318 attribution rules still apply when determining Key Employees under EGTTRA? I sit pondering the revised top heavy language for plan years after 12/31/2001, but it's just not clear to me.

Anyone else think they know?

thanks.

Grant