Our prototype adoption agreement allows the adopting plan sponsor to give credit to employees for eligibility and vesting for service with a predecessor organization. However, I cannot find a definition of "predecessor organization" in the plan document. Must there be some connection between the predecessor organization and the plan sponsor? For example, must the plan sponsor have taken over the predecessor organization's plan?

A potential client wants to give credit to new employees from certain companies but not from others. I do not think there is any ownership connection between these companies. The client does a lot of government contract work and when he bids on contracts he must offer a certain level of benefits to the employees working on that contract. He has apparently interpreted some of these requirements to require giving credit for past service on some other government contract job for some other, unrelated company. I do not see how a sponsor could give credit for prior service to some employees and not to others, if there is no connection between the sponsoring employer and the predecessor organization.

Are fines and penalties (other than the user fee) as a result of VCR corrections able to be deducted by the corporation for tax purposes on the corporate tax return? Does anyone have specific references to guidance?

Are there any unique nondiscrimination testing rules that apply to a premium only plan that is maintained by a church?

NFP employer with existing ERISA 403(B) plan is amending matching contribution formula to base matching percentage on years of service w/employer. The proposed formula passed preliminary non-discrimination testing.

If plan demographics change, is cross-testing a permissible alternative means of passing nondiscrimination testing?

Are there any prototype 403(B) plan documents out there that contain the necessary language??

When a company has Both both a 401k and a Non-Qualified Deferred Compensation Plan for Select Employees and both are pre-tax Plans, how are the percentages calculated from the employees gross earings.

I was told that the Deferred Cmpensation calculation takes precedence over the 401k calculation. The primary retirement account is the NQ Deferred comp and is calculated in full against Gross Earnings. The 401k calculation becomes a secondary adjusted calculation. The 401k calculation would calculate the percentage based on the Gross earnings "less" the Deferred Compensation amount.

I would appreciate knowing if this is correct and how to do it based on say a $250,000. annual salary since I am going to have to communicate this to the eligible employees so they can figure the amount of compensation they can contribute. We currently have a 15 percent maximum compensation that employees can contribute to both plans combined.

Thanks,

Louis Gray

When a company has Both both a 401k and Deferred Compensation Plan for Select Employees and both are pre-tax Plans, how are the percentages calculated from the employees gross earings.

I was told that the Deferred Cmpensation calculation takes precedence over the 401k calculation. The primary retirement account is the Deferred comp and is calculated in full against Gross Earnings. The 401k calculation becomes a secondary adjusted calculation. The 401k calculation would calculate the percentage based on the Gross earnings "less" the Deferred Compensation amount.

I would appreciate knowing if this is correct and how to do it based on say a $250,000. annual salary since I am going to have to communicate this to the eligible employees.

Thanks,

Louis Gray

I am interested in Medical Reimbursement Insurance and the different ways discrimination is allowed. I am also interested in the different companies that sell this type of insurance. Does anyone have any ideas? Thanks

I work for a city government, I contribute to a 457 dc. My employer contribute's, on my behalf, to my union's defined benefit

retirement plan. Assuming approval from union trustee's I would like to know if I can do a direct before tax transfer of any or all of my 457 balance to my Union's retirement fund with the objective of purchase additional service credit. The union defined benefit plan is a multi-employer type plan if this makes any difference. The possibility of such a process is a very big deal with the guys I work with at the puplic works dept.

I greatly appreciate any information.

Thank you.

As I review cross-tests perfromed by different TPAs, there are two ways in which a participant's age is being calculated. One that I refer to as the Attained Age method is the age of that person on his or her birthday in the 12 months preceding the Plan's year end. The other method is one that I refer to as Closest Age: what is the participant's age as of the birthday that falls in the 6-month periods before and after the Plan's year end. Given the Closest Age method, some participant's have an age one year older than under the Attained Age method.

I see nothing in the Plan docs that speak to the method to use. In the ERISA Outline Book, Tripodi seems to indicate it's a matter of preference.

I've performed calcs in which a Plan can pass under one method and fail under the other, all other factors being equal.

Can I use whichever method works the best? If so, could I change it from year to year if a demographic shift would favor one over the other?

In 2003, participants in qualified defined contribution plans may make their IRA contributions to a qualified plan as a Deemed IRA if allowed by the plan. These IRA contributions can be traditional and/or Roth up to the new $3,000 limit.

In 2006, participants in 401(k) plans can make Roth Contributions up to $15,000 if allowed by the plan.

In 2002, participants can roll their traditional IRA to an employer sponsored qualified plan that allows it.

My questions is: does EGTRRA allow a participant to roll his Roth IRA into a qualified plan? If so, as of when?

I have a client whose company (Security Link) is being acquired by Tyco. He borrowed money from his 401(k) under old employer to purchase a home. Now he is being told that the loan either must be repaid, or treated as income, with penalties. Is there any relief for this situation? As a result of the acquisition, he is being transferred and must sell old residence and purchase a new one. What are his options? Thanks

I'm a broker in Denver CO. There are no fully insured group msa's available in CO. Does anyone know of a TPA who does a self funded msa plan or would be willing to start? ie. a qualified high deductible medical plan. I spoke to one local tpa who did not want to go through the effort of administering it. I have business clients who want a group msa product, but I can't deliver one.

Thanks

Does anyone know which plans should file in Puerto Rico and/or Guam? (Ones where x number of participants live there, ones where the sponsor has to pay taxes there, etc.?)

Also, what does getting a favorable determination letter there mean? (If it is "unqualified" in PR, what happens? All PR residents have taxable income?) It seems as though it would not matter as the money is all in a valid trust.

An accountant for a plan sponsor is suggesting that the sponsor can return deferrals to HCEs to avoid top-heavy status. Is this allowable?

What are the consequences if the plan sponsor returns HCE deferrals to avoid being top-heavy (and the deferrals would not have been returned due to ADP testing or any other reason)?

In review of current case, discovered that there was an error on the 1999 Schedule B (interest on Normal Cost didn't stick when entered last year, so charges were understated and credit balance was overstated). I know, I know, one shouldn't make errors, but unfortunately was the byproduct of having to do a ton of forms in a very short period of time last fall.

My question is, how to handle submission of amended 1999 Schedule B under EFAST? The Form 5500EZ and Schedule P were unaffected by the change. How should I submit? Have client resign a new "amended" 1999 5500EZ (showing no changes) along with the amended 1999 B? Submit revised 1999 Sch B along with the 2000 filing? Any help would be appreciated.

Is it mandatory to have the date of birth for a designated beneficiary of an IRA?

I know it is recommended- but the IRA owner does not know the DOB of the individual and wants to designate him as the beneficiary without his knowledge ( for personal reasons)

I have a group that has a 501©(3) designation and has a 403(B) program. They told me they also are a Governmental organization and are interested in establishing a 457(B) plan next year since the coordination between the 2 plans go away. How or what should I ask for or look at to determine if they are truly a Gov't org before trying to implement.

Can a SIMPLE 401(k) accept rollovers from any other eligible plan. IRS sample plan language (including the model amendment in Rev. Proc. 97-9) indicates that it can. Past industry comments I've seen seem to indicate that the answer is "yes". However, I've seen a recent comment from a reputable firm which takes the position that rollovers to a SIMPLE 401(k) from any eligible plan, including another SIMPLE 401(k), have never been allowed (under pre/post EGTRRA). The position is based on the specific language in the Code that basically says a SIMPLE 401(k) plan may only receive elective and matching contributions (Code Sec. 401(k)(11)(B)(i)(III). This firm's position is that the IRS's interpretation exceeds its authority under the statutory provision and that until there is some clarification or further guidance, rollovers to SIMPLE 401(k) plans shouldn't be allowed. I understand this is their interpretation but I'd like to know what interpretations others have on this. What do you tell your clients?

A safe harbor plan is established 1/1/2002. The required contribution will be the basic match. If all the safe harbor requirements are met, is it correct to state that for the 2002 plan year no additional contribution is required for the nonHCE / nonKEY if the only participant that elects to defer is the business owner? Assume no other employees become eligible in 2002.

Can anyone explain how catch up contributions will impact the ADP / ACP test. Is it included in the tests, can you make a corresponding match for the contribution? Is there a good reference for this question?