Please help? Heres the senario:

ABC company had a SIMPLE IRA for 2000 and 2001. But in the middle of 2001 the company changed it's Tax ID#, and company name. Does the company have to adopt new SIMPLE IRA? If so can the company adopt the plan for 2001 even though it's past the Oct 1 deadline?

I have a prospective client with a current Target Benefit who wants to amend to a Cross-Tested plan.

Can he just amend, or does the Target Benefit need to be terminated, resulting in 100% vesting for all employees prior to setting up the Cross-Tested?

Is it possible to suspend contributions to a Target Benefit (with proper notice to employees) and leave it open but in frozen status, while operating the Cross-tested plan?

Basically, is there any way to avoid the full vesting requirement and still set up the Cross-tested plan?

Thanks

I participate in a SARSEP plan. I have been doing some research and discussing this with Fidelity but believe they are not confident in the answer they have given me. My questions is this, for 2002, does the maximum contribution to the SARSEP increase from 15% to 25%. This is the only retirement plan we have and I would like to make sure all employees get the maximum benefit available to them. Thanks.

does anyone know a good international 401k advisor for Taiwan's situation?

Thank you

Can greater than 2% LLC members participate in a 401k plan under the following scenario:

the LLC that employs the partners and other employees outsource all of their HR benefits to a Professional Employer Organization ("PEO") via a co-employer relationship.

Thanks!

Do any of you all require that the trustee or whoever prepares census data for your clients sign some sort of certification? Namely, to certify that this information is correct, complete and accurate to thier knowledge and this is the information to be used in preparing the annual administration.

If so, what disclaimers or languange do you use?

How are the tax rules different between Roth IRA for Non-Resident & Resident Alian?

Is it better to have Roth IRA, 401k or both?

As I know, there is 30% taxes up front for Non-resident alien to have 401k.

What else should I know?

Thank you

I am putting this on the 401(k) page because nothing else seems appropriate.

We are running our W-2 programs in test and are reviewing the program. The question is regarding who gets the box checked and what the program looks for.

We check the box for active participants in all plans covered under 401(a) {all of our DC and DB plans}. Do we check the box for those employees who are active under a multi-employer plan - such as those in the Sheet Metal Workers National Penion Fund? The W-2 instructions do not say anything regarding who sponsors the plan.

Any experience or even an educated guess??? A cite or an idea of where to start looking would also help.

I was wondering if a plan that does the Safe Harbor 3% amount for 2001 could have a last day rule (they are doing Safe Harbor so they automatically can pass ADP/ACP). Also, are there any special rules for Safe Harbor regarding hours worked? Example: an employee hasn't worked 1000 hours and the document requires 1000 hours for an employer allocation - for normal matching and PS contributions they wouldn't be eligible but would they for Safe Harbor? THANKS!

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?

A plan has terminated and will begin paying out participants next week. The plan requires an audit for 2001.

Can the participant count on the 2001 Form 5500 reflect accured distributions (checks cut in 2001 but not cashed by 12/31/01)? The trustee would like to bring the participant count down to under 100 so that an audit is not required for 2002.

If the answer is "Yes," do you have a response or citation for the auditors who say that accrued distributions cannot be reflected in the participant count?

Any guidance is appreciated.

I just started working at a 501©(3) organziation with a 403(B) plan. The plan document states that the plan is a profit sharing plan. Is this correct? The plan provdies for salary deferrals with an employer match.

For those of you who allow individual policies to be run through a Section 125 plan...

I know that the policy must be owned by/purchased by the plan participant. And in reading Harry Becker's comments from 1995 (awhile ago, I know), it sounds like a plan participant can purchase a policy for a dependent. But where to you draw the line, because couldn't one argue that they bought the disability policy,AD&D policy, etc. for their spouse? It seems like a slippery slope. How have any of you who work with these plans deal with this?

I have a case right now where an EE pays a "parental" fee for TEFRA in MN for insurance on his ausistic minor son. It is a form of Medicaid, and the parents must pay a fee each month for this insurance. I believe that this can be run through the IND account, esp. since Medicare premiums can) but I'm concerned about how to tighten the definition of ownership of a policy. Anyone else dealing with this?

:confused:

I know that after EGTRRA, after-tax contributions can be "rolled over" into a qualified plan (or IRA), etc. and that a distribution will not be considered an eligible rollover distribution if it includes after-tax amounts. However, has anyone thought about the effect of the withholding rules? Generally, eligible rollover distributions are subject to a mandatory 20% withholding requirement. Suppose that someone receives a distribution of eligible rollover amounts, including after tax amounts and does NOT effect a 401(a)(31) direct rollover. Does the employer now have to withhold 20% on the entire amount (including the after-tax amount). Presumably, the participant would just get a refund the next year with respect to any withholding on the after-tax amounts. But still, technically, the after-tax amount IS part of an eligible rollover distribution and 3405© couldn't be more clear as to the tax effects. I checked the legislative history and noticed that nothing is mentioned. Code section 402© itself impllies that there is a separate accounting for the amounts not included in gross income and those that are, but is this really enough for me to reach the conclusion that they intended that 3405© would not apply to after tax amounts? Does the last sentence of 31.3405©-1, Q&A-10 (B) ($5,000 death benefits) give me proof that the IRS is really saying that the 20% withholding occurs with respect to amounts not excludible from gross income? What about the fact that these regulations have not been amended for EGTRRA? Thanks for any help!

If DCAP plan fails nondiscrimination testing in 1999 and this is discovered in 2000, when should the HCEs be taxed on the DCAP benefit in 1999 or 2000?

A client is selling the stock of its wholly owned subsidiary to an unrelated buyer in an arms length transaction. They are both electing to make a 338(h) election under the IRC to deem the sale to be an asset sale for tax purposes. The wholly owned subsidiary contributes to a multi-employer pension plan. Will this transaction be treated as a stock sale or an asset sale for purposes of determining whether withdrawal liability is triggered as a result of the sale? Has any legal guidance been issued on this issue?

I have a client who has a 401(k) Plan and has merged and become a subsidiary of a church-related entity. As such, they have informed us that they will no longer be filing 5500's for the plan. I know very little about church plans but doesn't something have to be done to their 401(k) plan before it can be declared a church plan? Is so, what is the procedure? Thanks for any help you can give!

An employer wants to eliminate participant direction of investments, which is not a protected benefit. But, currently participants may take a distribution immediately upon termination. Can the plan be amended to change the distribution date to after the end of the plan year in which termination occurs, or is that going to violate 411(d)?

I know I've seen this somewhere, but just can't come up with the reference. Turned 50 in June, so this must be my first "senior moment."

Anyway, Joe X works for employers A and B. Can he defer 11k into each plan? Also, is there a separate $40,000 415 limit for each plan?

Thanks all. Maverick

Can QJSA be removed from a Profit Sharing plan during the restatement process. I believe optional forms of benefit, including QJSA can now be removed from a PS plan, but 90 day participant notice is required. Since the restatement is effective Jan 1, 2002 it seems like we have missed our window of opportunity. If that is correct, we would then have to amend the plan after the restatement in order to remove QJSA. Is this correct? We would obviously prefer to handle the change right in the restatement.