Assuming that a participant's aggregate elective deferrals to a plan as of the date of the hardship distribution is $20,000 and assuming that he/she had received a corrective distribution from the 401(k) source (ie - ADP, 402(g) or 415) several years earlier of $1,000, is the amount available for the hardship withdrawal $20,000 or $19,000? In other words, do corrective distributions reduce the principal amount of elective deferrals for hardship available purposes?

Any help is appreciated.

Anyone have any experience with penalties being assessed for failure to file a form 945? All withholding was paid in a timely manner, but no 945 was filed for a couple years. I am having trouble locating info on penalties.

Thanks for any responses.

How is everyone handling the effective date of your restatements of plans which have had substantive amendments adopted between the effective date of GUST's provisions and the date of redrafting?

I'm sure others have run into this problem before. For a given year, a participant hits her 415 limit and ends up having some employer contributions held in a suspense account for her. She then terminates employment and looks to be paid out. Are these suspense account dollars forfeited and reallocated to all other Plan participants?

Thanks for your help.

The U.S. Chamber of Commerce is currently seeking volunteers to participate in its survey of employee benefit expenditures. The Study provides valuable information on the total cost of employee compensation, including average costs by company size, industry, and geographic region. The survey is only five pages and is simple to complete with your 2000 year-end figures at hand.

Companies may volunteer to participate in the survey by sending an e-mail to ebstudy@uschamber.com or by visiting www.benefitstudy.com to download the survey form. Each participating company will receive as a “thank you” a FREE copy ($75 value) of the published survey results, which can be used to evaluate your company’s benefit offerings. As an added incentive, two individuals will be randomly selected to receive a FREE Palm Pilot.

The deadline for participation is July 27, 2001. The results of the Study will be published in Fall 2001.

The U.S. Chamber of Commerce is currently seeking volunteers to participate in its survey of employee benefit expenditures. The Study provides valuable information on the total cost of employee compensation, including average costs by company size, industry, and geographic region. The survey is only five pages and is simple to complete with your 2000 year-end figures at hand.

Companies may volunteer to participate in the survey by sending an e-mail to ebstudy@uschamber.com or by visiting www.benefitstudy.com to download the survey form. Each participating company will receive as a “thank you” a FREE copy ($75 value) of the published survey results, which can be used to evaluate your company’s benefit offerings. As an added incentive, two individuals will be randomly selected to receive a FREE Palm Pilot.

The deadline for participation is July 27, 2001. The results of the Study will be published in Fall 2001.

The U.S. Chamber of Commerce is currently seeking volunteers to participate in its survey of employee benefit expenditures. The Study provides valuable information on the total cost of employee compensation, including average costs by company size, industry, and geographic region. The survey is only five pages and is simple to complete with your 2000 year-end figures at hand.

Companies may volunteer to participate in the survey by sending an e-mail to ebstudy@uschamber.com or by visiting www.benefitstudy.com to download the survey form. Each participating company will receive as a “thank you” a FREE copy ($75 value) of the published survey results, which can be used to evaluate your company’s benefit offerings. As an added incentive, two individuals will be randomly selected to receive a FREE Palm Pilot.

The deadline for participation is July 27, 2001. The results of the Study will be published in Fall 2001.

Employee is recieving 3 months of severance pay Starting May 1 (to July 31) for a plan with a June 30 year end.

The plan requires you to be an Employee (or on approved absence) with 1,000 Hours of Service and be an Employee on the Allocation Date.

Employee defined as any common-law employee of an employer. A leased employee, as described in section 414(n) of the Code, is not an Employee for purposes of this plan.

Is this person eligble for a contribution?

I'd like to hear some opinions or guidance on the preferred investment allocation for forfeitures in a participant-directed plan. As distributions occur throughout the year, should the forfeited monies remain invested in the accounts that they were previously in (i.e., those chosen by the participants), or should they be transferred to a more stable fund?

The reason this question comes to mind - occasionally an employer has a layoff and does not know to advise recordkeeper of partial termination. The employees are paid out their vested amounts - but later the partial termination is discovered and those affected employees need to be made 100% vested and paid the balance. What happens if the forfeited monies have lost value between the time of the first distribution and the second one? Does the employer have to "restore" the forfeited money to its value at the time of the first distribution?

has anyone else tried the latest version from the website bulletin board?

while it uses the defaults as coded in plan specs which is a great feature, i have encountered the following problems (curious if anyone else has):

1. printing of avg ben % test.

if ee is includable and not benefiting, the ee might cause the report to print out of alignment...e.g. the next participant starts printing in the middle of the report.

2. the non-benefiting non-excludable feature no longer works with the avg benefits % test

3. coverage appears to be including terms with less than 500 hours. (or at least a few extra bodies)

I saved the old version of rdiscrim and have gone back to that for now.

I understand that churches are exempt from non-discrimination rules in who they cover in a 403(B) plan. Are they also exempt from non-discrimination rules in offering a profit-sharing plan? My understanding is that this exemption happens as a by-product of not be subject to ERISA rules.

Are there other non-discrimination rules unique to profit-sharing plans that would control. Thanks for any help!

The reason I am asking is this - our church wants to cover certian full time employees at different contributions percentages - based on employee classification, length of service, etc.

Our company is in the process of changing 401k providers. They have given us a list of mutual funds into which we can make our investments. They have identified those new funds that they believe are most like the funds of the "old" provider. They have even given us the option to let them know where to invest our "new money"! So far - so good! However, with regard to "old money", i.e., our funds that are with the "old" provider, we have no choice. The company refuses to: 1) allow us to make a direct transfer (rollover)to an IRA; 2) allow us a choice as to where we can transfer our funds with the new provider. The only choice is that the company will decide on the specific mutual fund where they will invest our money - even when they have been instructed by the individual participant that the participant does not want to be invested in that fund!

To me this seems to be unethical at the least and perhaps illegal at worst. However, I'm not a 401k expert. It just seems wrong for a fiduciary to take a client's money and invest it against his/her wishes.

Any advice from someone more knowledgeable than I?

Wondering what you use to do batch MEA (Maximum Exclusion Allowance) calculations on 403(B) plans?

Does anyone have an onsite employee gym? I am looking for relative information related to costs to run facility, type of equipment, staffing level, useage.

Below is my take on the effect of EGTRRA on "Flip flop" plan design. I would appreciate any comments or suggestions. Thanks to the Mike & Kevin show over on PIX...

============

Summary: EGTRRA takes away the override where 412 trumps 404 and originally made the Flip Flop work (Sec. 616). However, because of the increase in comp limits, 25% of 200K makes a DC [deduction] limit of $50K, so, if you design your DC at 25K annual contribution, you can still get 2 years worth of DC deductions in one year.

EGTRRA doesn't impact the ability to deduct more than one year of DB contribution in a single tax year, AND because of the ability to ALWAYS have a deferral-only 401(k), you can add $11,000 per year in deferrals to help make up for the reduction in DC contributions because of the 25% limit.

So....to do a flip-flop post-EGTRRA, you need to design your MP plan at 50% of maximum so you can fit 2 years of contribution into a single year's deduction limit (you need 2 years to make the flip-flop come out)

BUT - IN THE END, YOU'RE NOT THAT FAR AHEAD, SO THE COMPLICATION DOESN'T SEEM TO BE JUSTIFIED. SEE BELOW:

Let's look at old (start in 2001, pre-EGTRRA) vs. new (start in 2001, post-EGTRRA)

Old way: $100K DB, 35K MP

Yr 1 Deduction = $100K DB

Yr 2 Deduction = $70K MP

Yr 3 Deduction = $200K DB

Yr 4 Deduction = $70K MP

Yr 5 Deduction = $200K DB

Yr 6 Deduction = $70K MP

Total > 6yrs = $710K - OR $110K better than just 6 years of a simple $100K DB.

New way: $100K DB, $25K MP, $11K 401(k) - NOTE this is 3 plans to make it work, it used to be 2!

Yr 1 Deduction = $100K DB + $11K 401(k) = $111K Total

Yr 2 Deduction = $50K MP + $11K 401(k) = $61K Total

Yr 3 Deduction = $200K DB + $11K 401(k) = $211K Total

Yr 4 Deduction = $50K MP + $11K 401(k) = $61K Total

Yr 5 Deduction = $200K DB + $11K 401(k) = $211K Total

Yr 6 Deduction = $50K MP + $11K 401(k) = $61K Total

Total > 6 yrs = $716K, or $116K better than 6 yrs of a simple $100K DB, and $6K better than before EGTRRA. Because of the extra plan required, I don't think this justifies the extra administrative cost and complexity. The chances of screwing it up in some fashion over the lifetime of the plan has got to be better than even!

Note, without the 401(k) addon, the total is $650K or only $50K better than a simple DB, and $60K worse than before EGTRRA.

==============

Thanks!

What are conditions imposed on a NQ deferred comp. plan if the sale of the sponsor's business is an event triggering distribution?

An Employer Sponsors a MPPP & 401(k) P/S Plan. Annual valuations @9/30. Participant terminated 1/01/99 choose not to take our his distribution after the 9/30/99 valuation was prepared. On June 6 2001 9/30/00 valuation results were provided to the terminated participant. With the statement was a letter from the Trustee sarting that effective 3/31/01 the plan is switch to quarterly valuations and that to request a distribtuion you must notify the trustee 6 days prior to end of quarter.

Does the employee who terminated on 1/01/99 have any protected benefits under the plans? He was waiting for the 9/30/01 valuation to commence distribtuion. I think that the distribtuion rules as of the last valuation date should controll and he is eligible to get his distribution based on 9/30/00 value

Company A and Company B are members of a controlled group. Company A sponsors a calendar year 401(k) plan, and Company B is a participating employer.

On April 30, stock ownership changes and Company B is no longer part of the controlled group. Company B wants to start its own plan effective May 1 and spin out of A's plan.

How is company A's plan tested? May we use 1563(B) -- since B was in the controlled group for fewer days that it was out of the controlled group, A and B are tested separately for the entire year when the 12/31 testing is done.

Any practical solutions? Thanks.

what is a fica alternative plan? My friend is a substitute teacher for a school board and she has a fica alternative plan. If she is unhappy with the results can she use a 90-24 transfer to another 403b?

Need a copy of a survey. What organizations are doing with regards to negative elections (for 401(k) and 403(b)plans). Number adopting, considering, typical provisions,...

1. Provide or considering this option?

2. type of organization?

3. Approximate number of eligible employees?

4. Age and Service requirements?

Thanks for your assistance.