While doing some reading about the safe harbor non-elective contribution and the safe harbor match, it seems that all participants eligible to make 401(k) contributions would get the 3% s/h non-elective, while the match s/h contribution would only go to those participants who are actually deferring. Is this correct?

If so, couldn't that lead to an employer actually being better off with low NHCE 401(k) participation. For example, if there are 100 NHCE's in the Plan, and only 10 make 401(k) contributions, the employer would only put in match s/h contributions for those 10 people. Also, if 5 of those 10 NHCE's are deferring less than 5%, then the employer does not have to put in the full 4% contribution.

Surely I've misread something about safe harbors, because the above doesn't seem "right".

Same topic, different question: Do the safe harbor contributions apply only to NHCE's, or can they also be given to HCE's?

what is the rationale as to why owner-employees are not permitted to take loans under IRC 4975

Does a safe harbor 401(k) plan make sense if it covers only part of a controlled group?

If one company in a controlled group can pass 410(B) coverage, can it operate a 401(k) safe harbor plan as if it were not part of a controlled group?

If a company in a controlled group could not pass 410(B) coverage without bringing in employees from other members of the controlled group, how would a safe harbor 401(k) plan work?

When leaving employment on disability,does Cobra extend to 36 months instead of 18?

IS 1042 ESOP Rollover treatment availale t a C Corpration that owns real estate?

When I terminated my employment on 12/31/00, my insurance provider was company A. I continued to use the same physician and prescription benefit until I received my Cobra paperwork. I received it, filled it out, and paid the premium. Now three months later, I received Cobra information saying that my Cobra coverage has been changed to Company B and I owe more money on the premium. My question: Who pays for the claims I incurred during the period when I thought I was covered by Company A. I have received NO information on company B, but I did call and find out that my same physician is not on their PCP list. Can anyone address this?

my husband is switching jobs and his last day was today, his insurance runs out tommorrow and we elected not to carry his cobra insurance ,but found a short term insurance policy that we can carry for 6 months (until his new insurance will kick in, after about 4months of working.) the policy has a big deductable and it doesn't cover pre -excisting illnesses. is that going to be a problem when we start our new insurance since it will be over 60 days from carring our cobra plan. I heard today that if this short term does not cover pre-excisting-then our new job insurance does not have to either. does that make sence thanks your help would be wonderful since we are running out of time. thanks pam

I was wondering if I could get some feedback on the following situation: A bank acts as trustee for a 401(k) plan. The plan holds employer stock as an investment option. The bank also owns employer stock and gives recommendations (investment options, administrative, etc.) regarding the 401(k) plan. The bank is clearly a party-in-interest. What liability issues arise from this situation? I am somewhat bothered by the fact that the bank owns employer stock and acts as trustee to a plan where employer stock is an investment option. I'm not sure why though.

I understand that certain states have "right to work" laws

under which employees who are not union members, nor pay union dues, may be covered nonetheless by collective bargaining agreements, and thus are entitled to the all the rights and benefits afforded the union membership notwithstanding their non-member status.

Assuming this is true, may such employees be disaggregated for purposes of nondiscrimination testing? If so, may the employer choose to test this group with the union membership, or by themselves?

Railroad Employees are subject to Tier taxes instead of SS/Med so I am not sure if Section 125 covers them or not.

I have contacted the RRRB. They didn't think they would be eligible, but they were not sure because they were not familiar with Cafeteria Plans. Does anyone else work with Railroad employees who have a Cafeteria Plan to give us an answer to our predicament? Are Railroad Employees eligible for a Cafeteria Plan?

I have a 401(k) plan with a discretionary match and the forfeitures are used to redube employer contribution. The company does not want to make a matching contribution, yet there are forfeitures. Is it ok to hold the forfeitures until some future year when a matching contribution is made?

If a company is laying off more than 20% of its workforce, is there any requirement to immediately vest everyone under the 401(k) Plan? We have a discretionary match and a graded vesting schedule.

How is a 5500 prepared to properly reflect an SCP (fka APRSC) deposit? Contribution is ER contribution and the gain is gain?! Or does it get lumped together?

I've read the previous posts on this issue, but I still need some clarification and/or guidance. How are you handling the partner's 401(k) election that must be made by 12/31 when K-1 data is not available until several weeks later? Any suggestions?

We are considering making a guess and correct after the K1 is computed. The problem w/ this is how to treat the correction.

Can a matching formula be independent of the amount deferred? For example: 3% of compensation contributed to match source if there is any deferral at all, no contribution to match source if no deferral.

Why or why not?

Employer was in the midst of doing an interim valuation of plan assets of a PSP and a MPPP. Participant requested distribution of his account balance 2/28/01. Broker moved the funds based on the anniversary date (9/30/00) balance of participant's account. Interim valuation recently completed and participant presumably would have received less. Does plan have a responsibility to look to participant for the difference?

Employer was in the midst of doing an interim valuation of plan assets of a PSP and a MPPP. Participant requested distribution of his account balance 2/28/01. Broker moved the funds based on the anniversary date (9/30/00) balance of participant's account. Interim valuation recently completed and participant presumably would have received less. Does plan have a responsibility to look to participant for the difference?

I've seen the 12/31 deadline for Roth conversions quoted extensively, but am stuck on a basic question: where in the code/regs does it come from? The only mention I've found of a Dec 31 deadline concerned the four-year plan for recognizing income from 1998 conversions in 408Aa3Aiii. Beyond that, the code/regs & Pub 590 appear to leave the question somewhat open to interpretation.

Pub 590 doesn't actually address it explicitly. It references the tax return filing date as the deadline for contributions but is unclear whether it's referring to standard contribs only or also qualified rollover contribs.

And Code sections 408A©(7) and 219(f)(3) appear to allow you to deem a trad-to-roth transfer made before your tax return filing deadline as having been made 12/31 of the prior year. Which would seem to allow conversions after 12/31. That of course hinges on "contributions" in 408ac7 being interpreted to include "qualified rollover contributions", but I can't see anything to the contrary in the code.

The Roth regs (eg 1.408A-4) say we need to include the conversion amount as income "for the taxable year in which the amount is distributed or transferred from the traditional IRA". But if the above code sections apply, wouldn't a pre-filing transfer be deemed to have been done on 12/31, hence qualify?

But before I hit the seminar circuit with a new loophole, figured I'd bounce it off some pros... ;-)

I am self-employed, make about $6000 a year. Not knowing much about taxes, I thought I don't make enough to file for taxes and I have never filed since I came here as a legal resident in 95.

I opened a Roth IRA on 4/15/2000 and contributed $2000 for tax year 99 and $2000 for tax year 2000. A while back, I found out on the Roth IRA web site that Roth contribution has to be "earned income". My questions are as following:

1)Is my Roth IRA account not valid due to the fact that I did not file for taxes in tax year 99, 2000 and all 3 years after I was in the u.s.?

2)How can I fix this? Which form to use when I back file? Do I need pay taxes on my scholarship when I was in college?I like to solve it before IRS tells me that my roth accout is illegitimate late on.

3)Do I make enough to put $2000 into my Roth?

Thanks for any helpful input.

Can a company supplement executives only for expenses not covered under a medical plan through the company's general assets but not for other employees?