A client mailed employee deferrals for a 401(k) Plan timely for all 12 months of the plan year. The custodian deposited these funds timely for 11 of 12 months. One month was one day late going into the trust. Are there any exceptions to filing the Form 5330 and restoring the plan when it is not the fault of the plan sponsor, or is the rule when the funds go into the trust?

Can a Safeharbor plan use a last day of the plan year provision provided under a non-standardized prototype? My thinking on this is no....but not sure.

Does anyone know if plan documents restated for GUST may be submitted for favorable determination letters in proposed forms?

Opinions with or without legal authority welcomed and begged for.

Thanks.

Recently my mother passed away and left two TSA accounts. I don't have the paperwork in front of me, but I believe they were 403b plans (she did work in a non-profit hospital). It's undetermined at this moment whether I am the beneficiary or the estate is. The question is, does the estate or the beneficiary have to pay any income taxes on these amounts inherited? I'm not concerned with inheritance taxes.

TIA, Carl C

I am a broker. We set up one of our group clients on a section 125 plan last summer (7/1). The service which provided the plan document now wants to charge the client again to "update" the plan. I know the sec 125 regulations were revised in 2000. Do the new regs require an extensive rewrite? This is a simple POP plan to shelter the employees's share of medical and dental premiums.

IRAs must pay tax on its unrelated business taxable income (UBTI) of $1,000 and over.

Can the IRA owner reimburse the IRA for this tax?

I am planning to move my ROTH from annuity to possibly Vanguard total stock index fundI am not really intesrested in investing in any stocks right now due to slow market and time involved in researching. Have anyone been doing well with index funds like Vanguard or other leading mutual fund companies? Can you recommend some good ones?

Thanks,

James.

I know govt. plans aren't subject to IRC 412, but are they subject to Full Funding limits?? This is my first govt. plan and it's funding method is PUC, and the full funding limit is $80,000 and the Normal Cost is $130,000. Thanks.

We have a participant who just took a $15,000 loan for a primary residence. However, his individual account is invested in B-shares from which there was a penalty on distribution. He received few hundred dollars less than the $15,000 he asked for on the loan request form. Which amortization schedule is proper to use, the net figure or the $15,000 figure? I would think this happens often enough that there is a simple answer, although I don't know what it is. Thanks.

Many of our clients are interested in using matching contributions to satisfy the top heavy requirements, particularly in safe harbor plans. I understand that for top heavy, non safe harbor plans, the employer must make an additional contribution for any participant not participating in the 401(k) plan or receiving a match of less than 3% of compensation.

Wouldn't this also apply to safe harbor plans? If a safe harbor plan uses the safe harbor match, and only 4 of 6 NHCE's defer, doesn't the employer need to make the minimum 3% contribution for for the 2 non-deferring employees? Thanks.

We frequently encounter adolescent plans which, as a start-up plan, fell victim to “deferred sales charge” investments (i.e., back-end loads). They now want to switch investment vehicles but the employer does not want to pay the DSC and does not want the participants to take a one-time 3-5% hit to their accounts. I understand some plan recordkeepers/trustees will “reimburse” the plan for the DSC in return for a higher fee (charged to the plan). I’m interested in learning how this works and what fiduciary and/or prohibited transaction concerns arise. Also, any other solutions for solving DSC problems?? Thanks.

Is anyone aware of a circumstance where a 65 year old resident alien could be considered an eligible dependent on her daughter's group plan ? Quite a stretch... but I was asked to pose the question. My impression is that insurers will normally only cover eligible children and spouses.

Hi, Has anyone heard of a proposed loosening of the corporate ownership diversity requirement fo non-bank trustees under 1.408-2? Thanks

If a person owns a small biz as a sole prop with no employees and his wife owns another small biz as a sole prop in a totally unrelated business with 2-3 employees, is this situation subject to the attribution and controlled group rules. The spouses' businesses have no connection at all other than the marriage.

If so, am I right in concluding that both retirement plans must be treated as one?

Since SIMPLEs and SEPs are IRAs and not qualified retirement plans would using them avoid those rules?

Plan X has been exempt from PBGC premiums because the only employees of the company are husband and wife. Now they have an employee. The employee first became a participant at 1/1/2001. The participant count at 12/31/2000 is 2.

I thing the 2001 PBGC premium is $38. What am I missing?

Does anyone know anything about the laws in different states concerning authorizing payroll deduction electroinically for a paperless plan loan?

I was wondering if anyone has insight into the following:

Company sponsors a DB plan. The plan was frozen July, 2000. The Company is in the process of filing for a GUST determination letter. The Company would like to file with the 1998 Form 5300 forms and not with the proposed forms. The question is must the entire Schedule Q (including demonstrations) be completed?

The instructions to Schedule Q provide that only Parts I and II need to be completed if "the plan does not benefit any highly compensated noncollectively bargained employees. " It seems reasonable to take the position here that this is true and that no further information is necessary.

Is this a position that the IRS will buy?

Thanks in advance!

Someone is telling me that a small business can have 105 and 125 plans in place that the same time. Can anyone say for sure (citing the source) if this is true or not? The company has employees other than the owner and spouse.

If an individual contributes to a 457 plan with the understanding the individual will be retiring in April 2005 and has a DOB of 1/31/1939 can the individual use a catch-up provision in 2001? Why or why not? Likewise, what catch-up options would he have starting 2002 with the new regs and the potential to also participate in a 403(B) with the same employer?

I am starting a small business and haven't decided between LLC, S-Corp, etc. I may have a couple employees besides myself, or may use independent contractors. Does my choice of entity effect what type of retirement plans I can choose from - 401k, Simple etc?