Because of the horrific tragedy on Tuesday, does anyone know if the DOL-PWBA plan on granting extensions past 10/15/2001 for anyone in an affected area? I know the IRS has just released notice 2001-61 allowing this for extended corporate and individual returns. However, I was uncertain if the DOL was prepared to take a stance.

We submit our payroll withholdings for a 401K Plan approx. every two weeks (bi-weekly payroll, gather files from 3 subs, proof, submit). Prices for mutual funds are invested at close of market prices.

As it turns out, we were a bit behind due to files snafu at one sub. That was fixed, I am ready to go with 3 payroll files--except market is closed. One payroll was submitted last week and will invest Monday (or whenever market opens).

In role as fiduciary, should I space out the other two payrolls over next week? Can I wait to see (1) if the markets are working okay, and (2) if the recent tragedies will skew the market?

I will (procedurally) send each payroll on a separate day as a separate transaction. (About 600 participants are involved and there are 9 mutual funds in the plan).

Gil

What is the Federal law pretaining medical benefits for employees in different salary groups? I am the administrator for a Church. We would like to provide the Senior Pastor and the ministry pastors with benefits different from the other exempt and non-exempt employees. :confused:

I think that a terminated plan participant must be given notice that if their account balance is greater than $5,000 they are not required to take a distribution from the plan. If this is so, how is that requirement met? Is there a special notice for this, or can it be added to the 402(f) Special Tax Notice as a separate paragraph, say at the beginning of the tax notice?

Thanks for your help.

How does an ESOP track selling shareholders who elect 1042 treatment in order to avoid engaging on prohibited allocations? For example, the selling shareholders have until their 1040's are due to elect 1042 treatment. What happens if the ESOP makes an allocation before this deadline and gives an allocation to a selling shareholder that hadn't elected 1042 treatment at that time, but subsequently does? The shareholder had not made a 1042 election at the time of the allocation, but later did. Does that allocation become a prohibited one?

This post is related to my previous post entitled "3% nonelective contribution issue" . E/er's e/ee's are 1 doc and 8 employees. It appears that the 8 e/ee's will almost certainly not defer. Doc wants to add a matching contribution element to the 401(k) in addition to the 3% nonelective safe harbor such that he can put away as much the rules will allow. I was thinking of having a discretionary match limited by the 4%/6% requirements but which would not be subject to the safe harbor rules as to nonforfeitability, etc... such that the plan would ultimately have the following contributions: 3% nonelective safe harbor, discretionary match, deferral up to maximum percentage and the discretionary PSP (integrated with Social Security). Short of adding new comparability/cross-testing which wouldn't be appropriate since the doc is relatively young I think that's about as far as I can go. Anyone see any issues thus far???

Can a defined benefit plan covering only HCEs provide different benefits to those HCEs? I have a new client who hired sales manager 5/8/00. My client,the 100% owner, was told by his prior actuary that the sales mgr. did not have to be covered,and in fact had him execute a waiver of participation.Since the owner and the mgr. are the only employees this violates 401(a)(26).If the plan could be restructured to provide a lower benefit for the sales mgr.this might make the situation more palatable.Any thoughts?Thank you.

Small professional corporation wants to transition founding partners from FT employee/owners to consultants, with phased transition of stock ownership to younger shareholders.

As consultants the founders would work on premises and have W-2 compensation & benefits, including health coverage, life insurance and disability insurance, qualified plan participation, expense reimbursements, bonuses, and a bonus representing their share of the return on capital investments in the firm.

Looking for other examples of this type of transition.

I invested my IRA assets in some foreign stocks.

They withhled foreign tax on the payments of dividends.

Is this proper?

I know that dividends on domentic investments are tax deferred.

How can I get the withholding back?

With the EGTRRA increase in section 404 limits to 25% of eligible payroll, most companies maintaining both mppp and a p/s plans will be terminating the mppp or merging it into the p/s plan. If the plans are merged, vesting does not need to be increased to 100%, but the account balances retain the annuity option and must be tracked separately. One way to aviod this is to terminate the mppp and distribute the assets. Of course, vesting increases to 100%. While most will roll the distrbution into the pension plan, some won't. This bothers many employers, not to mention the 100% vesting rule upon plan termination.

Question: Is there a way to merge the mppp into the p/s plan and also eliminate the annuity requirement? I swear that I read this somewhere while studying the issue. Did EGTRRA expand the GUST provision? Thanks.

My company has a dependent care plan/cafeteria plan. Most of our employees are in the US; however, some of our employees are international employees. The international employees consist of US citizens working abroad and non-US employees.

The international employees do not participate in the dependent care plan because their dependent care providers do not pay US income tax. The plan document, however, does not exclude them from participation.

Do we include the international employees in eligibility and utilization nondiscrimination testing? :confused:

I recently was contacted about performing a valuation for a small plan. The plan was originally effective 01-01-1995. Everything was going fine until I discovered that the benefit formula in the plan is 2.00% of comp multiplied by years of plan participation (not to exceed 25 years) while the benefit that has been valued each year is 2.00% of comp multiplied by years of employer service (not to exceed 25 years). Two different actuaries have valued the incorrect formula. One of them is no longer available and the other is in a fee dispute regarding this plan.

The difference in the years of service used for the benefit formula appears to be a drafting error, although no clear written evidence of this exists. The employer contributed did what the actuary told him to contribute and, not surprisingly, did not compare the benefits in the valuation with the benefit formula.

Anyone else ever have this type of problem? If so, what did you do?

A doctor is employed by two unrelated corporations maintaining qualified plans. His compensation from each would enable him to have a $30,000 maximum contribution made on his behalf from each. Can this be done?

Is a sole participant in a plan eligible for a qualified plan loan?

We have been notified by a client that one of his employees has embezzled $800,000 from his business(not the plan). Collateral damage(lawsuits,legal fees,lost clients) to his business amounts to another $4,000,000.He cannot make his contribution for 12/31/00 by 9/15.It's too late to request a waiver of minimum funding, or is it? This would seem to be an instance where the government should be able to grant some kind of relief.The Secret Service is involved and they're part of the Treasury Department. Does one side of the house help the other?

Calendar year employer to adopt brand new PSP (effective Jan 1, 2001) with safe harbor 401(k) provisions (effective Oct 1, 2001). Employer wants to cover everyone who is employed as of Oct 1, 2001 for both the PSP portion and the safe harbor 401(k) portion. Clearly, nothing wrong with the PSP allocation being based on comp for the plan year (Jan 1 to Dec 31), but can the 3% non-elective safe harbor contribution also be based on comp for the plan year (Jan 1 to Dec 31) or must it be based on comp for the short 3 month plan year (Oct 1 to Dec 31) as you can't have a retroactive 401(k)??

Help! Help!

I seem to be having a recurring bad dream. Similar issues continue to come up on my plans and I can't seem to get any sound feedback as to a reasonable direction to move in. I welcome and invite anyone that can provide some guidance on this issue to please respond.

- I have a plan 403b ERISA covered PNTSA.

- There are two plans of the the employer (PNTSA [ERISA]

& TSA [Non-ERISA]).

- The PNTSA plan has deferrals and a match.

- Everyone is allowed to defer to the TSA. However, those who

normally work less than 20 hours per week are excluded from

the PNTSA, the deferral piece as well as the employer piece.

My Understanding:

While the outside TSA covers the Universal Availability issue for the PNTSA. There is a potential violation of ERISA section 202(a). While 410(a) does not apply to a 403(B), ERISA states that

410(a) is applicable for the purposes of ERISA 202(a). I believe this may be a problem because the broadly available deferrals are not a part of the same plan.

Could someone please provide your thoughts on this.

Thanks

Nabiyah

We have had conflicting answers to this question from attorneys and from CPA's:

Can a self-employed person with employees open a 401(k) plan? May the business owner defer, and if so how? Do we define compensation in the document as something other than W-2 wages? This may seem like a simple question, but two or three different authorities have told us two different answers. Thank you for any assistance.

A person who contributed to an employer Simple IRA but did not contribute the maximum before the employer terminated the plan, can he contribute to a traditional IRA to make up for that? If yes, how much can he contribute to the traditional IRA?

A person who contributed to an employer Simple IRA but did not contribute the maximum before the employer terminated the plan, can he contribute to a traditional IRA to make up for that? If yes, how much can he contribute to the traditional IRA?