A qualified Profit Sharing plan invests in a limited partnership (as a limited partner). The partnership issues the plan an annual Schedule K-1 (Form 1065). The K-1 shows ordinary income from trade or business to be $ XXXX.

My Question:

Does the Plan have to file an annual Form 990-T and report that ordinary income as taxable ?

(I can easily understand how a general partner would be subject to the 990-T tax in such a situation.... but I have a hard time seeing how a limited partner would be subject to the 990-T tax).

A broker/dealer client of ours has a 401(k)Plan covering it's own employees. All assets are in mutual funds and are part of an overall bundled service package arrangement. All recordkeeping and trustee fees are being waived.

Since there are no expenses, can the 12(B)(1) revenue be paid back to the broker/dealer? In essence, they are simply pocketing the money. If not, what other options do they have in regard to this revenue?

Thanks - MichaelV

Once a plan has been terminated and the trust is closed, for what period of time is the TPA responsible for continuing to provide assistance regarding participant and plan sponsor inquiries.

Can an employer limit nonelective contributions to a 125 plan to (a) premiums for dependent care coverage or (B) 401(k) plan contributions? If so, what is the tax status of the k-plan contributions? How would this work?

A plan states that act equiv uses mortality based on the 71GAM table (unisex blend). It does not say what percent the unisex blend is based on the male table or the female table. What blend is reasonable to assume in this case? That is since it is not specified can one take the approach that it be a 50% male and 50% female? The Plan violates 401(a)(25)(definitely determinable benefits). So any suggestions as to the extent that the Plan's percentage blend could be challenged on that basis?

Gary

Do the final regulations impact the requirement to offer a deferred annuity on plan termination? We have a money purchase pension plan. Amended 1.411(d)-4, A-2(a)(3)(ii) seems to say that you can substitute cash payments for annuity contracts, provided the cash payments are identical to the annuity contract except for the source of the payment. What does this mean for a terminating plan?

Should I invest in a Roth IRA or put the money in an employer matched 401K plan? The match is on a percentage basis & the money is distributed to the plan & then among the participants. I am not sure whether I should branch out to a Roth IRA or keep the money in mutual funds through the 40lK.. any suggestions/advice would be appreciated. Thank you.

My husband recently signed up for 3 AFLAC supplemental insurance policies. At the time of signing up, he was given 24 hours in which to view a brochure and then decide. He was told at the time that if he signed up and then did not want it, he would have 30 days in which to cancel. We received the policies and quickly cancelled them. My husband contacted his payroll department and informed then to quit withholding the deductions. He was informed at that time that these were Section 125 benefits and he could not cancel. We later received a letter from AFLAC saying the same thing. My husband at no time was informed this would be a Section 125 benefit nor did he sign any form saying he wanted to participate. He fully believe he had the 30 day "free look" period on the policies. My question is, can an employer do this? Can an employer make an employee participate in a cafeteria plan without the employee's consent? Can he get out of this since he never consented to participate in the plan?

My power plant complex is to be sold. The acquiring company has a similar benefit plan to the selling corporation. Employees are said to be retained, so no break in employment happens, hence no severance package. But years of service with the seller's pension plan cease with the sale, no more accrual or COLA happens, and we get the annuity value from the seller's defined benefit plan when we retire 10-25 years down the road, coupled with a seperate pension from the years of service with the new employer. Assuming the same career path at the same power plant, we appear to be in for a screwing.

If I remained employed at the original company, my annuity is calculated at [30 yrs X 110,000 (est highest 5 yr income at end of service) X actuarial constant]. Now, the calculation will be [(15 yrs X 61,000 X actuary constant) + (15 yrs X 110,000 X the constant)]. For the same career, the math shows at least a 25% reduction in future benefit value - not factoring in inflation. The seller's pension plan assets are 40% overfunded, but all pension assets associated with the seller will be retained with the seller. No transfer of pension assets takes place. No retention package is offered by the buyer.

Given that we are hardly the first group of employees to find ourselves in this situation, how has this sort of issue played out in the Courts? Do we have any recourse or protection? Are there any legal cases that have resolved this question?

Retiree asked union pension plan to increase benefits for retirees in pay status (only). Reasoning: his medical costs have increased dramatically since retiring. He stated to the board members that it was legal for them to make this benefit increase without having to increase the current benefits for those still contributing to plan. I see discrimination in favor of a class of participants. He was not asking that all pension benefits be increased across the board, just those who are fully retired and receiving benefits.

The multiemployer audit guidelines address the need to confirm that funds have not been transfered to other union trust funds, i.e. health trust, etc. Anyone know anywhere else to look for information on this? I am familiar with single employer plans, but not multiemployer.

Attorney is a sole proprietor (calendar year taxpayer) who hired his first employee in 10/98. Employee was over 21 years of age when hired and has earned over $450 of compensation in each year for 1998 thru 2000. In what tax year must attorney begin contributions for employee?

Can a government agency of a state start a discretionary profit sharing plan- how about nondiscretionary?

Can this plan include pick-ups under 414(h)(2)?

Hard to find materials on this- would appreciate help!

I am working on transfering certain employees from a DB plan to a Money Purchase Pension Plan. It appears that 411(e)(2) brings in the old pre ERISA 401(a)-4 and 401(a)-7 with respect to vesting requirements. Does this mean that we have to apply regulation 1.401-4©? Discrimination requirements of 401(a) do not apply- but what about this regulation under the old 401(a)-7? Does anyone out there operate a money purchase plan for a government plan- did you apply this regulation?

I am a Canadian citizen working here in the US on VISA as a non-resident legal alien. I know I can legally contribute to an IRA, but will I be taxed when I withdraw the monies at retirement age by both Canada and the US? I plan to continue residing in the US until that time.

Accounting Firm has a wholly owned Financial Services Subsidiary. The FS Subsidiary retains 12b-1 fees received from mutual funds in which the parent Accounting Firm's qualified retirement plan (PSP) invests. Prohibited? If so, exemption suggestions?

Do you know of a 403(B) plan that allows a one-time irrevocable election? Does the employer include the contribution made pursuant to the irrevocable election in the employee's FICA wages?

Does the incidental benefit rule apply to elective salary deferrals under a 401(k) plan? "Seasoned contributions" (i.e., contributions that have accumulated under the Plan for at least 2 years) under a Profit Sharing Plan can be used to purchase life insurance without regard to the incidental benefit rule. But, this exception is based on the principle that these contributions may be withdrawn from the Plan. Elective salary deferrals, on the other hand, cannot be withdrawn until a distributable event under Code section 401(k)(2)(B) has occurred. Therefore, it would seem that 401(k) salary deferrals are subject to the incidental benefit rule -- even if they're otherwise "seasoned contributions". Any thoughts? Thanks.

Does anyone have a worksheet to calculate contributions for self-employed participants? It seems everyone calculates the compensation and contribution differently.

Thanks

What forms and/or initial actions need to be taken by plan sponsor with the IRS to start the process of fixing some errors in a 401(k) plan thru the VCR program? (Assuming that these errors would fall under guidelines of using Standardized VCR Program.)

Thank You.

Regarding the DOL's aggressive attitude regarding employee withholding remittance date contribution requirements, I've got a question.

In brief terms, these requirements are that the employer needs to remit (or at least segregate) employee salary reductions to a 401(k) plan as soon as they can reasonably be segregated, but no later than the 15th business day of the following month.

My question is this...in order to fulfill this requirement, can the employer "accumulate" these withholdings in a separate account during the course of the month and then pay to the plan sponsor on monthly basis? (I think they can). And also, can the employer (which currently shoulders the burden of the total plan cost) use the accumulating interest during these months to help pay for the plan costs, thus avoiding the burdensome task of allocating this interest?