Are top heavy minimum contributions subject to vesting?

As of July 1, 2001 you must file 1998 and ealier 5500 forms with the PWBA instead of the IRS. Do we now have to file future extensions (form 5558) with the PWBA or IRS? :confused:

:confused: the sponsor of a 401k declares bankruptcy and is then unavailable to the plan participants. The court ordered bankruptcy trustee is unwilling to deal with the plan. Participants call wanting their money, but we have no authorized signature to distribute the assets. Any idea on how to proceed?

We are making a QNC to restore a participant who missed deferrals in prior years.

Someone has told us that such QNC contributions are not deductible. Is this correct?

If so, would that impact using company matching forfeitures to fund the QNC? The matching contibutions were deductible of course.

As I understand it, a sponsor is not required to have an SPD for a Section 125 Plan, as it is not an ERISA plan. The underlying ERISA plan could require an SPD, ie. the health insurance plan whose premiums are being paid pre-tax.

If this is correct and I am pretty sure it is, why are most of the SPD's given to participants in Section 125 plans so long and complicated. They all seem to try and include the information required of ERISA plans. It would seem more of an effort would be made to keep the SPD simple and understandable, since there is no required language.

I would appreciate your thoughts.

I am curious to know if there is a ROTH Educational IRA, or is just an Educational IRA? And what is the annual contribution to them?

I realize this is one of those "gray area" in the realm of cafeteria plans but a client brought a cafeteria plan to me with a interesting default option. The client has been using this option for several years but now there has been a problem with an employee who forgot to make a new election during the open enrollment period. The plan has medical benefits designated as mandatory core coverage and each employee is given an employer allowance.

This plan, instead of simply using the evergreen election approach and rolling over the prior year's election, considers the participant to have selected the default provision. The default provision is the lowest cost employee-only health coverage. Here's the catch... the failure to re-elect causes the participant to forefeit his employer allowance and the cost of the default option is paid by salary reduction.

Has everyone ever seen a penalty provision like this in a 125 plan?

:confused:

What happens in a situation where the 5500 is prepared on an cash basis and the audited financial statements are prepared on an accrual basis? The actual Participant Summary is cash. I realize this makes it harder, but it is acceptable? Also, we have just switched from Accrual to Cash....on the 5500. Any help would be greatly appreciated.

We are making a QNC to restore a participant's account. Deferrals were suspended in 1998 due to the 402(g) limit and were not started again in 1999. The error was discovered in 2001.

The QNC will include make up for missed pre-tax deferrals, company match, and earnings.

Can we use our matching forfeitures for this if the plan document says that forfeitures are used to reduce "Company Contributions"?

Do you have to file one Form 5500 for a multiple employer welfare plan? If so, what should each participating employer file to satisfy their reporting requirements?

I am looking for the average expense nationally for 401(k) administrative and investment services. Does anyone know where such statistics might be?

When calculating the 15% deduction limit for a PS plan in 2001, can I include the full-year comp of a new participant who enters the Plan on July 1, 2001? The Plan will only recognize this participant's comp from July 1, 2001 on for purposes of allocation of a benefit.

Do the provisions of EGTRRA relating to elimination optional forms of benefit in a DC plan apply at all times, or only when a participant's benefits are transferred from one plan to another?

Do the EGTRRA provisions override the fairly recent regulations that allowed elimination of optional forms if you met certain requirements, including special notification of participant requirements?

i noticed that the revised 5500 series does not include a question re: 5310 filing in the event a plan is terminated. the 5310 question used to be an audit trigger for terminating plans.

i have a client that wants to know the risks of not filing form 5310. i'm trying to get a handle on the potential audit risk. anyone have any experience terminating a plan but not filing it via 5310 during or after the 1999 plan year (when the 5500 was revised)?

any input is greatly appreciated.

I am working with a document that limits contributions to the HCEs in order that they receive no more than 1/3 of the contribution. It dawned on me that since the 415 limit will now be 100% rather than 25% of copensation per individual, does it make sense to have that feature in the document? I suppose if you were going to have mega-forfeitures or mega-dividends it might make a difference, but any other scenarios, or am I missing something.

In 2002 the §415© percentage limit will increase to 100%, but the §404 deduction limit for target benefit plans will remain 25%.

Assume a target benefit plan where there are several participants who have been limited to 25% due to §415©; but without the application of the §415© percentage limit, their normal cost could be much higher (even higher than 100%).

In 2002, if the normal cost is allowed to go up to 100%, and as a result the total cost exceeds the §404 25% deduction limit, what do you do? Or should I ask what should you have done?

Does the existing plan language limiting total cost to that which is deductible prevent the nondeductible contribution? If yes, how should the document allocate this limitation amongst participants?

Can you leave the §415© percentage limit at 25% even though the law allows it to be 100%? (Or is it required to be raised?)

Can you raise the §415© percentage limit to 100% but specifically limit each participant's normal cost to 25%? If you do so but the only participants who are limited to 25% are Non-HCEs does the plan violate §401(a)(4)?

I have been asked to head a project committee that will investigate the possibility of implementing a compressed work week -- where do I begin and does anyone have a policy? thanks

I have a multiemployer situation; benefits were retroactively enhanced & a few participants went over the involuntary threshold upon re-calc. ; they've already been paid lump sums based on the former benefit level; does anyone know what the recommended or even legal way of handling this is ??

A company at the end of 1999 had 10,000 in forfeitures which were used to reduce match in 2000. The company contributed 90,000 to the plan in 2000. Our report would show a total contribution of 100,000 (90,000 cont. + 10,000 forfeit) The question is: On question 2a(1) of schedule "I" when listing the total contributions, would we list 90,000 or 100,000

I have been asked to head a project committee that will investigate the possibility of implementing a compressed work week -- where do I begin and does anyone have a policy? thanks