How is partner (or other self-employed) compensation under 401© calculated in light of the addition of 402(g)(9)? Must the matching contribution for the partner be deducted from compensation similar to a money purchase or profit sharing plan contribution, or is it possible to argue that this is similar to an elective deferral and therefore should not be subtracted from gross comp?

We have a client that has a contributory Money Purchase Plan on an Individually Designed Document. We have been retained to review the document and see if most of the provisions will fit on a prototype plan. While doing this I have come across something that I have never seen before. The Individually designed document states that the plan will not be trusteed. The document was signed by the Plan Sponsor who agreed to act as the Administrator of the Plan. Further investigation shows that, true to the document, they have never filled a Schedule P with the 5500 forms. I have never worked with a non-trusteed plan and I am not sure if one can be put on a prototype. It does not appear to be an option on the PPD prototype. Does anyone have any experience with this or have any suggestions as to where I can learn more about non-trusteed plans?

I have a health and welfare plan that terminated 4/1/00. As of 10/31/00, all liabilities have been paid. As of 12/31/00, a cash balance of ~ $9,000 remains in the trust account due to "adjustments" to claims submitted. Since this cash balance exists, I presume I cannot file a final form 5500 until this money is removed from the trust. True?

With a Plan termination, what happens to a participant who has an outstanding loan? Can they continue to make payments on it if they are still employed by the company?

For the Average Benefit Percentage Test under coverage testing of 410(B), what compensation must be used? I believe 414(s) compensation must be used, and I know the plan document may control this. However, if the plan document is silent, is there a choice between full year and partial year? Can the same compensation used for ADP and/or ACP testing be used for the Average Benefit Percentage Test?

We will finally be upgrading to 6.0. Just call us chicken or cautious, I'm not sure which!

I have read the previous posts from Tom and found them very helpful. Has anyone experienced problems specific to daily valuation, FIAG or the web interface?

Thanks.

I know that it is clear under the safe harbor rules that the 3% contribution can be made to a plan other than a 401(k) plan - such as an ESOP. But here is my question ... If the 3% contribution is made to a leveraged ESOP, and the contribution is used to repay the ESOP loan with stock being allocated from the suspense account to the employee accounts, what amount of stock would be required to be allocated to the employee account to meet the 3% rule? This becomes an issue in the leveraged ESOP, since the cash contribution made to the plan will go toward payment of interest on the ESOP loan as well as principal. Stock is allocated from the suspense account to the employees' accounts based on the amount of principal paid. My concern is that it could be possible for a 3% cash contribution to be made to the ESOP, but with a part of that amount being used to pay interest, it is possible the stock released from the suspense account and allocated to the employee accounts might not have a fair market value of 3% of compensation. Is it sufficient that the 3% contribution was made, even if the employee does not get stock valued at 3% of pay allocated to his or her account?

Is there a site where many different mortgage companies and banks current Roth IRA rates are shown? Do they vary greatly? I'm just trying to save myself some legwork tracking down rates from individual moortgage companies and banks and would appreciate any advice you could give a novice investor. I really appreciate your time and your help.

1/1/2002 is getting much closer. Anybody hearing anything about what to expect in terms of timing?

I'm concerned about not only cross tested DC plans, but also combination DB/DC plans.

Plus, we also have GUST amendments to consider.

My guess is another extension of everything, or at least the cross tested stuff. But, just a guess.

Insights or thoughts?

i am 42, permanently disabled and receiving long term disability benefits from both my employer and social security administration.

i have a vested employee stock ownership plan i would like to receive a distribution from. my employer indicates i would have to be at least 55 and retired. isn't LTD recognized as "retired" regarding ESOP.....as it is with other pension benefits?

I am struggling with this one. 403(B) Plan Sponsor wants to change 403(B) providers. I understand that they can limit the custodian they will send contributions to on a going forward basis. My question is whether they can unilaterally move participant custodial accounts from the current vendor to the newly selected vendor or do they require participant direction?

Any insight or references will be appreciated.

Thanks,

Andmik

IN the case of an employer who is insolvent, and who has a profit sharing/401(k) plan which must be terminated, is the TPA justified in saying that the GUST amendment and final reporting requirements are payable from the plan assets? The TPA does not wish to do the work for no fee, and the employer apparently has no way to pay any fees. I'm sure that this isn't a unique situation, and I'd like to hear from anyone who has dealt with it. This is a small plan (assets of less than $45K), and I wonder if approaching the owner to pay the fees out of his/her distribution might have worked for anyone.

Where can i get a Roth IRA on the internet???

Can i print it out??? I need to fill out a printed out Roth IRA form for my bussiness class.... Any help is appreciated. Thanks!

An employee is due to enter a 401(k) plan on April 1. He is excluded until May 1. From Rev. Proc. 2000-17, it appears that a QNEC must be made since the employee will not have the opportunity to defer for the last nine months of the year. However, this employee would have only been able to defer 9 months had he entered on his eligiblity date. Has anyone considered whether this 9 month rule can be pro-rated depending on the entry date which was missed? Any opinions?

When can the value of terminated participant account balances be considered for the $5,000 automatic payout rules?

With the severe decline in the market, I am sure that some terminated participants balances have now fallen below $5,000. Can the determination of balances occur quarterly? daily?

Any thoughts would be appreciated.

Diane

I need to make a large withdrawal from a Ira and will be subject to the 10% penalty. Should I have the 10% penalty taken out of the distribution right away?( Along with the federal and state taxes). I know that I would probably have to pay a penalty at tax time if I didn't have enough taken out for Federal but does that apply to the 10% penalty also?

Our health plan has recently had two cases where adolescents were placed, by their parents, in Wilderness Camp programs as an attempt at intervention related to emotional and/or drug abuse problems. These programs are in some cases licensed by the state but most are not JCAHO accredited. The two cases we had required the parent to pay in full for the “admission” to the camp – usually a stay of from 21-30 days. Both camps stated that they would assist the employee in filing a medical claim for the “admission.” In one case that assistance was a statement on letterhead with the total charge stated to be tuition. Because the facility does not meet the standard required in our Plan we have denied coverage. I’m interested in any information others may have regarding these camps and whether or not the plans you administer provide coverage for this type of “admission.”

Can classes be defined like this?:

Class 1: Participants making between 20,000 - 25,000

Class 2: Participants making between 15,000 - 24,999

etc.

Also, with the proposed Regs, it appears permissible to carve out classes of employees and exclude them from the profit sharing contribution altogether (write them out of the plan), since the Regs do state any leeway with the 1/3 / 5% gateway.

Would this design work under the proposed Regs?:

All employees making over $25,000, except for Owners and Officers, are excluded from the profit sharing contribution. Class 1 includes Owners and Officers. Classes 2 and on are broken down by compensation ranges like shown above.

What do you think? Is it too aggressive?

My company has had a Section 125 plan for several years. The plan consists of medical and dependent care spending accounts and does not include insurance premiums (our health plans are 100% employer paid). It is based on a calendar year. Employees are paid monthly (on the 1st of the month) and deductions are withheld from each check. However, the first deduction each year is withheld from the February 1st paycheck. For example if I elected $1,200 for the 2001 calendar year in my dependent care account $100 would be deducted from my each of my paychecks starting with February 1, 2001, through and including my paycheck of January 1, 2002. The plan was set up and has been this way before I became the administrator. This causes problems with W-2 reporting of dependent care (i.e. in the above example we would report $1,100 on the 2001 W-2 versus $1,200 even though the employee submits receipts and receives reimbursement for $1,200) and in looking for another 3rd party administrator I'm running into problems with no one wanting to come near our plan. I beleive the 2001 deductions should start on the January 1, 2001, paycheck. How can I fix this for 2001 and start 2002 off right?

Can the current owners of a privately held company capitalize and buyout their ESOP because of concerns about trustee liability? It's a non leveraged ESOP. Are there any issues regarding this?