Takeover plan was determined to be top heavy for 1998 and 1999 but not all non keys received minimum contribution for 1998 (liberal eligiblity requirements for 401(k) feature)and no profit sharing contribution was made for 1999. Regarding the deductibility of these contributions, it is my understanding that the employer would be able the deduct part of these contributions for the 2000 plan year as long as the 404 deduction limit is not exceeded for the 2000 plan year. Can someone cite a regulation or revenue ruling that addresses this?

I am looking for a sample policy or guidelines on vehicle leasing for our employees in Germany. From our policy in Belgium, there probably will be many factors that go into the policy design: lease vs. allowance in salary, taxes, mileage reimbursement, fuel, maximum kms per year, lease term, maintenance, insurance, registration, etc...any help or direction (ie. website suggestion) would be very much appreciated.

An employer sponsoring a self-funded plan (stop loss coverage only) subsidizes 15% of premiums for active employees, and 0% of premiums for COBRA recipients.

The employer recalculated its group health premiums and found it had to raise them substantially. In order to prevent passing this increase on to the active employees it is increasing the percentage it will subsidize to 20% of the increased premium. However it is passing on the increase to the COBRA recipients.

Since the premium amount is the same for actives and COBRA recipients, this still meets the "similarly situated" requirement, does it not?

I'm a DB guy and don't work on 401k plans, but need to know the following:

Where on a tax return does an employer deduct 401k elective deferrals? Are they treated as compensation, and deducted as such? Or, since they are technically employer contributions arising out of a participant's voluntary salary reduction, are they deducted as employer contributions on a tax return? Assume a corporate tax entity.

Mr X took a hardship distribution of $50,000 from his account. Now his account balance is only $2,000. $6,000 needs to be returned to him due to non-discrimination test failure.

What do you do in such a case where there is not enough money in the account left to do the test refunds?

Our firm is a small 401(k) consulting/recordkeeping/legal firm, and we have always used custom Plan documents for our clients. We are not looking forward to incorporating the GUST changes into our existing documents, even though we have seen some good GUST checklists. Instead, we are looking for recommendations for a source for a new Plan document that includes all the latest goodies including GUST. In our ideal world someone would e-mail us a sample document (that we would pay for, of course). We're not looking for some big system of CDs and manuals and classes and on-going updates - we just need a Plan document. Any ideas?!

Thanks.

An employer has a profit sharing plan with 401(k) feature that includes all classes of employees. One of those class of employees is not permitted to receive overtime pay. The employer would like to establish another profit sharing plan only for that class of employees. This plan would allow the employer to fund it with what they would have received in overtime pay. Is such an arrangement (plan) permissible and would there be any problems with having different rate groups since none of these employees would be highly compensated?

If we as recordkeepers make a mistake & lose money, we make it up from our profits. But when an error correction results in a gain, it's less clear what should be done with that money.

In this instance we were sent a contribution with the wrong SSN associated with it. Therefore we applied it to the wrong person. Upon discovery & correction, due to the different investment elections the participants had, we find ourselves with a gain of approximately $1700.

This plan uses daily recordkeeping. It seems fair to fix this by reversing the shares purchased by the erronious contribution, thus the gain is not kept by the person who accidently received extra contribution.

Since we'd be making this right out of our pocket if the market had gone the other direction, it does seem reasonable to put this aside to offset errors that do result in a loss. Traditionally, we've never done this, instead allocating this gain somehow to the plan, perhaps thru a reduction in fees.

Does anyone have any thoughts on the proper way to handle these situations? Any references to IRS/DOL documentation would be great.

Thanks.

I have been off work for months with a drug induced myositis caused by a pseudocholinesterase deficiency that was aggravated by a beta blocker I was taking for high blood pressure. My employer's disability plan is carried through Liberty Mutual and they refuse to pay me benefits even after several letters from my doctor. Liberty wants a test and there is none for my present condition. Guess they need a code that matches one in their computer and it is non-existant. Meanwhile I have been without a disability check and other benefits with my company have been terminated because Liberty has not officially approved me for disability and denied my appeal. I have contacted the Ohio Dept. of Insurance and the Dept. of Labor but have been told that my employer is self insured and they cannot help me. Any suggestions?? Thanks!

How is IRAs benefit a temporary worker (H1B)visa holder since I have to leave the country after the visa expired (another 5 yrs)?

Thanks

A top heavy 401(k) plan requires 21 & 1, has quarterly entry dates. Employees enter on the date "nearest" meeting the eligiblity requirements. There are several participants scheduled to enter 10/1. Since the plan is top heavy, it may benefit the employer to amend the plan to allow only a single entry date (1/1). As long as the amendment is adopted prior to the "potential 10/1 entrants" having met the eligibility requirements, I can't see why this can't be done. Am I missing anything?

Thanks in advance for any guidance.

Hello, my husband has about $6000 sitting in a 401k plan from an employer he left 5 years ago (only was employed there for one year). We have another 401K now with the current company, and that's where we're doing our serious retirement saving. We recently realized that we really need to start planning for our children's future college education (we have a 2 1/2 year old, a 10 month old, and new baby on the way, and we do plan on having more children later) Rather than dipping into our short term savings accounts to start college funds, we would prefer to roll the money over from the old 401K plan. While mutual funds seem the best way to go with college savings, my understanding is that in order to not pay a penalty, we would need to roll it over into an actual plan, not just invest in mutual funds.

Would a Roth IRA be a good plan for this? Or are there any suggestions on a good plan to roll that 401K $ into for college savings? Also, we don't want the money in the kid's names because it could hurt their chances of receiving financial aid in the future.

One more question - is it possible to have SEVERAL Roth IRAs opened in our name? (One for each child, just not in the kids' names)

Sorry for my ignorant questions - I'm very new to the whole financial planning world and am trying to educate myself!

Thanks for any feedback!

Participant of Keogh plan who is sole participant of plan and who is 100% shareholder of corporation sponsoring Keogh plan passed away two years ago. Decedent was a licensed professional such that the P.A. basically dissolved when he passed away. Nothing has been done with the plan. Insurance company has suggested that a non-transferable annuity be purchased and distributed out to the beneficiaries named by decedent. Insurance company is the trustee of the plan and without citation of authority feels that this would not be a taxable event as to the beneficiaries of the annuity; rather, the beneficiaries would report income as they received annuity payments. I don't know if it is really that easy. Can anyone give me some authority on this or give me their experiences in such a situation??? Thanks for your help.

I was interested in finding out the results of the 3M retirees litigaion in MN last year. Please excuse if already done just got on.

Client purported to terminate pension plan in 1997. Apparently, TPA was directed to do whatever was necessary to get it done. Client switched to new TPA sometime thereafter thinking all was well. As of a month ago, IRS has asked for 5500 for 1997. Appears that all assets are still in pension plan. Are the IRS correction programs available for purportedly terminated plans?? I know the plan may be treated as an ongoing plan under 89-87 as the assets were not distributed out w/i 1 year. Any comments?

I have a plan administrator of a governmental 401(a) plan insisting that they required to perform Nondiscrimination Testing on their plan. Are their any regulations that require a 401(a) governemental plan to have compliance testing done?

Facts: 401(k) Plan that allows participants to defer up to 15% of Compensation. Employer Match on elecevie deferrals up to 50% of the participants elective deferrals. The Employer shall not match amounts provided above in excess of 4% of the Participants Compensation.

Assumptions: The participant defers 4% of comp into the plan each pay period and has compensation for the plan year in excess of $170,000.00. The employer makes matching contribution on a per payroll basis. The employee maxes out on deferrals at $10,500 (402(g) limit). The employer gives match equal to 50% of deferrals up to 4% of comp each pay period.

Question: If the participant compensation for the plan year exceeds $170,000 and he/she hits $10,500, what is the maximun match amount? 2% of $170,000 which is $3400 or $5250 which is 50% of 10,500?

I am looking for a list of "allowed assets" or "allowed holdings " for a ROTH self directed IRA.

Or a list of prohibited assets.

Thanks

Company A sells investments for retirement plans, and performs the administration as well. That is, until company A decided to sell all of the admin. portion of their business to Company B, who is unrelated to company A.

The small group of employees of Company A, who did the admininstration were offered jobs with company B, to do the same thing they were doing at company A (but at a different location), working on the same clients, preparing the same type of work, etc. Otherwise, they would be out of a job, since Company A had no work for them.

Assume all of these affected employees were less than 100% vested in Company A's 401(k) Plan. Company B will not recognize service with Company A for any retirement plan purposes for Company B.

Other than for reasons of a possible partial plan termination of Company A's plan, would there be any reason why these employees should be fully vested in company A's plans? Any out-of-the-ordinary rules concerning their distributions from Company A's plan?

Thanks

I am working on a plan for an employer who, due to the nature of the business, has many employees who terminate before becoming eligible. The prior plan category was "ineligible" and reason not eligible was "fails hours requirement". When I enter the termination date and status of terminated; the system does not change the plan category and reason not eligible to terminated. Why? I liked the software that we used before because it actually had a status for "terminated before becoming eligible to participate". I also manually changed the plan category and reason not eligible for a terminee and after running eligibility, the software changed both of these back to "ineligible" and "fails hours requirement". I would like these employees to show on the Census Verification as terminated. Any ideas? Should I perhaps run eligibility once, reenter my overrides to category and reason, and then run eligibility again? Thanks for any input.