I thought there would be an exception for DB plans where employer only employs HCE's for 401(a)(26) purposes much like for 410(B) purposes. I cannot find any exception in the statute or reg. If there are only 4 employees and only one wants to participate, it appears that you have to cover two to meet the 40% rule.

Does anyone have a cite for an exception?

I have a participant whose 2000 required minimum distribution is only $7.79. Does anyone know if there is an exception to the minimum distribution rules if the amount falls below a certain level?

We have a client who has a 401k plan which runs 6/1 - 5/31. The plan document calls for a discretionary match. Historically each month the employer puts in a 50% match up to 6% of deferrals. The participants receive quarterly statements showing the match allocation. The employer also prepared a simple participant handout outlining the plan which states the match will be 50% up to 6% of deferrals.

The client now has a cash flow problem and wants to discontinue the match. Since the document says the match is discretionary, can he stop the match retroactive back to 9/1/00? The last participant statements prepared were dated 8/31/00. Or should the client give the participants a notice saying the match will be stopped as of 1/1/01? The client has already deposited match money into the plan for September, October, and November. Could this be used as part of the Top Heavy contribution due for 5/31/01?

Two criteria were just noted to me about opening a Roth IRA that I wasn't aware of..... One was that you may not have a "regular" IRA already.....the other was that you must have below a certain income level. I will read other threads re: maximum income level to see if I understand that correctly (based AGI?), but as to the other existing IRA(s) -- is it correct that you may not have another and still open a Roth? Thank you!

I also posted this on the correction board, but I wanted to hear if any 401(k) experts had an opinion.

Several of our accounts that are going to elect safe harbor status did not provide the required notice within the 30 day period prior to the first day of the plan year as required by the IRS. Can they correct this under APRSC by providing the notice now as long as the employees all get to make the maximum amount of deferrals and receive the maximum employer contributions that they would have had the defect not occurred? If we say that it is an operational defect, APRSC has to be available, doesn't it?

Another employer was safe harbor last year and wants to continue but they didn't send out the annual notice within the 30 day period either. Can this be corrected? If not, is the result that they have to ADP/ACP test or does the fact that their plan document says that they are safe harbor mean that they have bigger problems that have to be corrected under one of the IRS correction systems?

What is the proper terminology to be used in the financial statements of a city government defined benefit pension plan? According to the Government Accounting Standards Board

this should be a "Statement of Net Assets" and "Statement of

Changes in Net Assets". However, I have read in other accounting literature that this should be a "Statement of Financial Status" and a Statement of Changes in Financial Status". This assumes that the City does not include the Plan in its own financial statements. Does anyone have any

views as to what is the correct or preferred manner of presentation?

A plan sponsor leveraged an ESOP with a loan of less than 10 years. The loan amortization schedule was based on variable payments of fixed principal plus interest. The plan released shares based on the principal only method. Therefore, each year the same number of shares were released from suspense as the loan was repaid. No problem so far. However, the plan sponsor then financed an additional purchase of shares with a loan of greater than 10 years. This loan was to be amortized in a normal fashion (i.e., equal payments consisting of varying principal and interest amounts -- like a mortgage). However, the plan and the plan sponsor treated the new loan like the prior loan. The plan sponsor paid the loan using a fixed principal and interest amortization (paying too much each payment) and the plan released the shares using the principal only method. If the plan sponsor had paid the correct loan amount using the normal amortization the release would have been correct since the loan was to provide for equal payments consisting of principal and interest. What issues does this raise? Is there a pt for not following the terms of the exempt loan? If so, can the lender (a related party) remit the overpayment to the plan which would then remit it back to the plan sponsor to cure the pt? Are there potential operational defects? Could the plan be submitted under an IRS correction program? Or, is there a prepayment of the loan (which the loan documents provide for without penalty) and, thus, more shares should be released and allocated (thus resulting in a greater accounting expense to the plan sponsor)? Any thoughts?

This may be a dumb question, but I'm having a brain cramp.

If the profit sharing portion of a 401(k)/ps combination plan is cross tested for (a)(4) purposes, and it excludes "otherwise excludable employees" (minimum age/service) for ADP testing, does this require the same treatment for cross testing (i.e. excludable HCE's in the (a)(4) test but excludable NHCE's out)?

Does anyone have a sample 402h notice?

I'm an employee of a privately held national company that has an ESOP. Since I've been with the company (1987) the stock per share value has remained an even $100.00. On this years statement the value has been cut over 80%. I nearly passed out when I saw this. We are not a Dot-com and have been around over a hundred years. How can an employee such as myself verify that the company isn't playing with the numbers in order to balance their books and/or what recourse do I have. Employees do not have voting rights and to my knowledge there is no employee at large. Am I screwed? Thanks

What are the trustee's responsibilities or duties, if any, when assets of a pension plan are insufficient to pay the benefits upon plan termination? The employer of the pension plan is a professional service company, therefore, the plan is not governed by the PBGC.

Given: A stste retirement system is excluded from Soc. Sec. coverage. In general, the state system defined benefit formula meets the IRS "safe harbor" test for exclusion from Soc.Sec. coverage. However, for some individuals, the state formula falls short of the "safe harbor" test. What is the Soc. Sec. status of such individuals?

I have a PEO who has a participating employer, who is a 50% owner AND is the only employee who actually deferred dollars for the year. (Plan was offered to all and there are other ee's eliglbe but all elected out) Is there anyway possible for employer to pass ADP/ACP putting in the maximum $10,500?? The plan document was not amended for safe harbor.

Help!!!!

A client currently has a non-Erisa 403(b)Plan (salary reductions only) and would like to establish an Erisa 403(b)Plan with employer contributions. Does the Erisa required Plan Document need to be in place before they make a contribution? during the year that they want to make a contribution(ie, 2% of salaries from 7/2000 to the end of the year)? How does that transition work?

Are there any Gust provisions that apply to local government defined benefit plans other than USERRA?

Yesterday I noticed a CFP commenting on CNBC about a recent PLR allowing a "strechout IRA". Does anyone know the PLR referenced?

I know there was a PLR allowing the bene of a bene to continue the MRD distributions and not to be forced to take a lump sum (as some custodial agreements state).

Additionally, there was a PLR that stated that you can use "seperate accounting" for the MRD's if there are individuals on the bene form.

Any other PLRs that broke new(?) ground??

A Mexican with a U.S. social security number and participant in his company's Pension Plan dies. He completed a beneficiary designation form, but at the time nobody noticed the absence of a social security number for the designated beneficiary. The beneficiary is determined to be a Mexican National without a USA social security number.

Does anyone have experience with this kind of issue? What are the laws regarding distributions to beneficiaries outside the USA?

Our company plans on increasing the employee contribution for medical and dental insurance. As of yet, they will not tell us how much the increase will be. Our open enrollment period passed about three months ago. My question is can they legally make a change to the plan when it is not the open enrollment period. What if an employee decides he/she can not afford it and would rather go onto their spouse's plan? They would not be able to drop their coverage because it is not open enrollment and not considered a qualifying event, correct? I would appreciate hearing anyone's thoughts on this.

Does a city government defined benefit pension plan have to require spousal consent for distributions such as lump sum and annuities?

When an ESOP purchases stock from an individual, is the ESOP subject to IRS Form 1099 filing requirements? If the selling stockholder elects Section 1042 nonrecognition treatment in connection with the purchase of that stock, does either the Company or the ESOP have to file anything with the IRS? The Company has signed a consent to the application of 4978 and 4979A and has delivered that consent to the selling stockholder. Are all IRS filing obligations on the selling stockholder?