http://benefitslink.com/boards/index.php?showtopic=11052

The above thread discusses the due date for a top-heavy contribution. Do the same arguments apply to a required match contribution?

What is the due date of a required match contribution? What are the consequences for failing to make the matching contribution by the required due date?

I have a situation that I would like to seek advise on. I have a client who has four Hispanic participants who have gained U.S. employment using forged Social Security Cards and Green cards. The client just found out by the SSA that the documents are not valid. The client has given the participants a reasonable time frame to gain legal work papers and apply for a valid Social Security Card. If they cannot secure the proper documentation they will be terminated.

These participants have account balances, but are not vested. So upon termination their accounts are forfeited and reallocated.

Does this affect the qualified status of the Profit Sharing Plan?

I'm not sure if this is appropriate for this topic. I am thinking of opening a 529 plan for my son. I already have an Education IRA which I am making contributions. I know that you cannot make contributions to both in the same year. However, if I get someone else, i.e. his grandparents, to open the 529 plan would I be able to contribute to the Education IRA and they contribute to the Section 529 plan in the same year? or is it the beneficiary cannot have contributions to both plans in the same year?

Can anyone direct me to documentation regarding establishment and administration of group trusts for qualified retirement plans?

Nothing like doing things at the last minute!! I have self-employed doctor with leased employees. Plan is considered part of control group. All non excludable leased employees (all NHCE) benefit under another plan. The question is can I use exception D under question 3 or do we need to run through the numbers in part 4 even if the result is 100%? On Form 5500 questions 6 & 7 should we report just the self- employed doctor or include leased employees covered under the other plan?

Reg. 1.401-6 deals with the termination of a qualified plan. Para. (B) defines a termination and states a plan is not considered terminated merely because an employer consolidates or replaces that plan with a comparable plan. 1.381©(11) describes what constitutes a comparable plan.

Seems like terminating a MPP to start a Profit Sharing plan (k) would be O.K since they wouldn't be "comparable."

But what about an employer who currently has a Profit Sharing Plan ('ER $ only) and wants to terminate it, distribute assets to employees and then start a 401(k? Put the logic of this aside.

The 401(k) would seem to be a comparable plan. Would the employer be making an impermissible distribution of those PS $ because the plan wouldn't be considered terminated? Is there any length of time they would have to wait before starting the 401(k), similar to the 401(k) rule for distributing deferrals and starting a successor plan?

This is probably a stupid question, but it has me stumped, and I would certainly appreciate your guidance.

Specifically, my question relates to Rev. Rul. 98-1 Q&A-8 and the conversion of a lump sum benefit to a "straight life annuity" for purposes of applying 415(B) to a DB plan.

In the example in Q&A-8, the participant has an option to take the benefit in the form of a lump sum, which on the facts works out to be $950,000. In converting that to a "straight life annuity" as required by 415(B)(2)(B), the Answer says "Thus, the equivalent annual benefit must be the greater of the equivalent annual benefit computed using the plan rate and plan mortality table (or plan tabular factor) and the equivalent annual benefit computed using the applicable interest rate and the applicable mortality table."

The example there says the plan rate is 6% and the plan mortality table is UP-1984 and that the "applicable interest rate" is 8%. The example goes on the calculate the "straight life annuity" equivalent of the $950,000 lump sum by (1) converting the $950,000 to an annuity using 6% and UP-1984 (which turns out to be $89,656), and (2) converting the $950,000 to an annuity using 8% and GAM-1983 (which turns out to be $94,078), and (3) then selecting the higher of the two.

That doesn’t seem consistent with 415(B)(2)(E)(i) and (iv), which I read to say that you determine the actuarial equivalent "straight life annuity" of the benefit in question by converting it to a straight life annuity using:

(1) The higher of the plan rate and the "applicable interest rate" AND

(2) The “applicable mortality table”...

and that's the end of it. The plan mortality table is not used in this step at all.

I understand that the plan mortality table would definitely come into play in calculating the $950,000 lump sum. But once that's done, I read 415(B) to say you're through with the plan morality table. More specifically, by my reading 415(B)(2) simply says you (1) pick the higher rate between the plan rate and the applicable interest rate (which here would give you 8%) and (2) you apply the "applicable mortality table" (i.e., GAM 83) and the result is the "straight life annuity" amount that you test. I don't see anything in 415(B)(2) that says you do this calculation using the plan mortality table and the plan rate and compare that to the result using the applicable interest rate and the applicable mortality table.

Consider: what if the applicable interest rate were 4% and the plan interest rate (as in the example) were 6%. According to the ruling, it seems you'd compute two annuity amounts, one using 6% (the plan interest rate) and the plan mortality table (UP-1984), the other using 4% and the applicable mortality table (GAM-83), and you'd select the larger. However, 415(B) seems to say you'd just use 6% and the applicable mortality table... which will definitely give you a different result.

What am I missing?

I'm new to 403(B) plans. This is my first (and only) one.

Is the ACP on matching contributions done exactly like for a 401(k) plan? Prior or current year; statutory exclusions; etc.

Are the 180% and 140% safe harbors still in effect?

Is there any reason why an employer could not make a zero interest loan to its ESOP?

I want to emphasize that I'm only asking whether there is any prohibition on no interest loans; not whether it is a prudent decision .

Is it OK for a participant to set up an Irrevocable Trust as beneficiary of his 401(k) Plan?

If a plan treats plan loans as participant directed, but all other investments are pooled, is the plan a "partial participant-directed account plan"?

We have not been adding code 2H if the only participant direction is for plan loans. I believe this is correct, but, would like to be sure.

Plan defines average annual compensation as the average over 5 consecutive plan years..... The plan year was changed - now we have a short plan year. Do we annualize the compensation for that period/ignore the short plan year/use overlapping years (like vesting)???

We currently have been using Corbel as our Volume Submitter Document provider. Recently, we submitted a checklist for a Indian Tribe (governmental entity) for a restatement of a 401(k) plan that we had previously received a determination letter on a few years back. Because of the extent of the additions and deletions of special language for this plan, Corbel has informed us that they will no longer handle Governmental/non-Erisa plans. Does anyone know of a good Volume Submitter document provider that has an easy to use adoption agreement with the ability to add special language for Governmental plans? You're help is extremely appreciated.

I have been told that New Jersey and Pennsylvania subject employee salary deferrals to a flex/cafeteria plan, to state and local taxes.

My cursory research indicates that this is not entirely accurate - any comments from practitioners in those states would be welcome.

My company currently administers our plan in-house but are bringing in a TPA to handle the plan in 2002. It is a privately held company.

The company is also rolling out a co-branded investment product with the same TPA in the coming months. Registered Investment Advisors will be able to sell this co-branded product to 401(k) plans; utilize the services of the TPA and offer our investment product. The investment product will utilize non-proprietary mutual funds, our company will be custodian of the assets and hold them in house accounts at each fund.

The TPA agreed to move custody of their own 401(k) assets to us and we in turn aggreed to move administration of our plan to them. We will maintain custody of our own plan assets. Any sub-TA, sub-accounting, 12b revenue, custodian fees, etc will be shared.

The TPA has waived all plan level fees, but did not waive participant level fees. The company is not going to pursue and outside legal opinion or private letter ruling.

On the surface, does anyone see any issues here? Thanks in advance for any feedback you provide.

What are the requirements for "top-hat" welfare plans? Could be more or less than 100 participants. Initial filing? Annual Reports?

A new client has been filing Form 5500EZ even though plan assets are less than $100,000. We're having a very difficult time getting the 12/31/2000 information, but we're reasonably certain that the assets are still below the threshhold. Anyone see a problem with using the exemption this year even though the forms have been filed in the past?

Have an unfunded insured Welfare Benefit plan. At 12/31/99, there were 97 participants at the beginning of the year and 81 at the end of the year. It's October 10, and the debate rages as to whether we need to file a 5500 by October 15 (plan was extended). I feel that no return is necessary, due to the plan being under 100 participants. My associate has an impression that for welfare plans, once you file as a large plan you always file as a large plan. However, in 1999, we received the 4R filing code, which says that there will be no filing next year, due to the decrease in participants (we did not use this code on the 1999 Form 5500, unfortunately).

My thought is to not file, and if and when the DOL inquires, answer with the decrease under 100 exception. Or, amend the 1999 Form 5500 and include the 4R code.

Any thoughts? Thanks much.

A Money Purchase plan has participant direction with pooled assets. A third party administrator made an error in calculating how much to invest in each fund and gave incorrect instructions to the plan sponsor for transferring assets among funds. Due to the error, the plan assets suffered a much larger loss than they would have if they had been invested correctly. Has anyone had a similar problem? Need suggestions for proper correction, which correction program is applicable, etc.

Does anyone have a problem with a 412i plan funded soley with insurance contracts that have a depressed value and have the clients children buy the policies out of the plan at the depressed cash surrender value after a period of 5 years?