A defined benefit plan terminated in 1998 but didn't distribute assets until 1999. In conjunction with the distribution the sponsor had to make a supplemental contribution to make the plan sufficient. I plan to reflect this contribution on the Schedule I.

There will be no Schedule B with the 1999 Form 5500 since the termination date was in the prior year. How will the IRS/DOL know that there is not one required? They removed most of the questions about plan termination and no longer actually ask whether the plan is subject to 412. I am trying to head off any correspondence from IRS or DOL on this issue.

I'm confused about the need for my client's required aggregation of his two DC Plans. Here are the facts:

1. has "frozen" P/S Plan (client's definition)which is top heavy.(I still have never received a straight answer as to how you have a frozen P/S Plan-doesn't IRS require "substanial and recurring" contributions? In this case document does not specify contributions based on profits so, if client hasn't been making contributions isn't the Plan actually terminated? Can Board Resolution simply be created that says Plan is now frozen?)

2. has Standardized 401(k) Plan with no match that covers all employees i.e. all key and nonkeys are eligible to receive benefits (make deferrals) but only nonkeys are deferring.

3. 401(k) Plan is not top heavy.

My understanding is that both Plans must be aggregated for purpose of Top Heavy testing as Key Employees "participate" in both Plans. I realize the Keys are not deferring in the 401(k) Plan but I thought the definition of participating is are you eligible (whether you do or not actually defer)

or not. Am I correct?

Can the spouse employee and child employee of an LLC member participate in a 125 plan? LLC is taxed as a partnership?

Thanks

Pat Insall

Is it necessary to file Form 5500 for medical plans that are fully insured (and therefore regulated by the state)?

I was once informed that if plans were subject to state regulations, that would supercede ERISA.

All plans have over 100 participants each but no filings were ever done. When I inquired about it to our broker two years ago, I was told "no" to filing. Now our broker is telling us otherwise, based on what other clients are doing.

Can someone help set the record straight, and, if possible, point out the legal info on this?

Thanks a lot.

My question is in regards to the required 20% withholding on the employer contributions. I know that you can submit the federal withholding to the IRS using the form 8109-B for those of us who are not electronic filers. My question is how do we submit withholding for any State Tax that is withheld from a distribution. Is their a universal form or is this a state by state consideration??

Could someone point me in a direction to find out the policy and procedure for submitting State Withholding.

We have recently taken over a plan in which we cannot locate the 1998 5500-EZ. When we confront the company who should have prepared the 1998 5500-EZ, they think they filed it, but "may have forgotten to file it". I have checked on freeerisa.com and have come up empty handed. I am trying to determine what to do at this point. Since we don't know if a 98 form was filed, should we:

1. Create a new 98 form and file it late?

2. File the 99 form and hope the 98 form was already filed?

3. Try to request a copy of the form from the IRS (any suggestions)?

4. Something else?

Thanks for all feedback.

We have a 3121(w)church that has some independent contractors that receive income from selling books(1099 income). The church would like to set up some kind of retirement plan for these contractors where the contractors could defer money as well as receive a employer match from the church. I don't think I can use a 403(B) or 401(k) since they are not common law employees (maybe a 403(B)(9)?). I'm thinking that the contracors may have to set something up on their own. Does anybody have any ideas or suggestions.

DB Plan Terminates in 2000 also in 2000 the Employer Establishes a 401(k) Plan. Will distributions from DB Plan count toward TH status?

416(g)(2)(a)(i) States that Required Aggregation Group is each plan of the employer which Key Employee Participates AND ( not or)each other plan of the employer that enables any plan described above to pass 401(a)(4) or 410.

416(g)(3)(B) State that you need to include distributions from terminated plans which if it had not terminated be included in a Required Aggregation Group.

1.298 of the ERISA Book goes though an example that seems to disregrad the Required Agregation Group Issue and only looks at that the plan covered one key to determine if it is part of the Req Aggregation Group and does not look at the second prong of the test.

Any thoughts?

I would appreciate your thoughts on how to perform ADP and ACP testing for a plan that mid-year becomes a multiple employer plan. General scenario is a 401(k) plan with a matching contribution has 2 controlled group companies participating, parent and subsidiary. Mid-year the sub's stock is sold outside the controlled group but there is still a minority interest retained by the parent. The subsidiary's employees continue to participate in the plan for the rest of the year and likely for the next few plan years. This creates a multiple employer plan which is required to be disaggregated for 410(B) purposes (Question: as of when)?

Can the plan be ADP and ACP tested as a single plan for the rest of the plan year of the transaction or do the employees, their compensation and contributions have to be split of for recordkeeping and testing as of the date of the transaction? If they have to be split off, are they tested for the entire year as though they were a separate group or only from the date of the transaction on? Testing separately is a records nightmare. Does the fact that the 410(B)(6)© transition rule allows the parent plan to continue to satisfy 410(B) for the rest of the plan year (and the following year) provide an argument that you can continue to ADP/ACP test as a single plan during the transition period. Thanks for your comments.

Hello!

This is my first time posting a message on this or any other sight. Hopefully, it will prove to be an efficient way to find the answer to my question, which follows:

What do typical maternity leave plans look like? I work for a small start-up that doen't yet have a policy on maternity leave, but does have the resources to be as generous as a larger employer. Do women out on maternity leave generally only get paid the nominal amount that the insurance company pays them or is salary continuation also common? If so, for how long? 6 weeks, a week for every year of service, etc?

Any advice anyone can provide would be very, very much appreciated. I'd be very interested in hearing what the policy on maternity leave is at your company.......

Thanks so much!

We're considering start-up of a small engineering consultancy and specialty construction firm. Working on proforma financials, and would like to get an idea on costs per employee for an outsourced benefits package (medical, dental, life, 401k).

We're looking at 15 full time employees at the end of yr 1, and 50 by the end of yr 3.

What's a ballpark budgetary figure per employee on an annual basis?

What's a ballpark for worker's comp insurance?

Any help would be greatly appreciated.

I am curious about distributions to Alternate Payees under a QDRO. Do most 401(k) Plans allow Alternate Payees to withdraw money they have been assigned under a QDRO even if no "distributable event" has occurred? It has been our practice to NOT allow an Alternate Payee to withdraw their money until the participant they were assigned money from retires, dies, separates from service, etc. However, we hear that others routinely allow Alternate Payees to withdraw their money. If this is true, what is the regulatory basis for this? Does the Plan document have to be amended to specifically allow for this? Thank you.

Thanks in advance

hi all,

I am a graduate student in my final year of school looking to place the max amount possible in a ROTH IRA.

What I do not know are the criteria I should consider when selecting a "broker/bank" to help me set the IRA up. Are there differing service, setup, or account fees I need to consider, and what "broker/banks" generally offer the most competitive rates? Is there a website or information source you might have found helpful?

Thank you for any assistance you can offer and have a great day.

If the 3% non-elective 401(k) safe harbor contribution is made to a money purchase plan that has no other contribution; what is the 404 deduction limit?

I think it would be 18% of eligible comp (15% for the ps plan plus 3% for the money purchase plan).

Someone else here thinks it would be 25%.

My question is related to Workers'Comp (WC), short term disability (STD),long term disability (LTD) and social security (SS). My salary changed while on STD meaning I got a raise, but insurance carrier used old salary as basis for LTD. What case/s would be prove that if my salary changed the from one disability policy to next basis of benefit is on the higher salary? I have tried for months with no avail to get the insurance carrier to make the correction, my employer has sent a letter stating what my correct salary was. To make matters worse the insurance carrier is now offsetting for SS overpayment, which is the correct step but amount is wrong, using PD which in California is not an income benefit and month of SS which I was not receiving any payment for. Can anyone give me some cases which I might prove that this is wrong? The policy basically states what my salary was. Of course my real question is who the best litigator in the Sacramento area who is familiar with this area of the law and federal ERISA litigation experience. If you have nominations, please let me know, because I have not been able to even find any prospects. Don't worry nomination does not imply any liability on your part if it does not work out.

A company seeking QSLOB status has 3 divisions with the following distribution of HCE's and NHCE's:

Division 1&2 has 32 HCE's and 40 NHCE's.

Dviision 3 has 14 HCE's and 714 NHCE's.

Divisions 1, 2, and 3 all have completely separate workforces, separate management, and separate financial reporting. There is only one employee allocable to more than 1 division, and that is the president of the company. The company is not publicly-traded, and there are no union employees.

The company designs, manufactures, and distributes machines for the gaming industry. Divisions 1&2 are located in Silicon Valley, CA, and employ the college-educated designers and engineers. Division 3 is in the midwest and employs lower-level manufacturing personnel. Currently, there is a single 401(k) plan, which has a matching formula, applicable to all 3 divisions. Divisions 1&2 would like to become a QSLOB, because they want to liberalize eligibility for the plan, and perhaps improve the vesting and matching formulas. The plan currently regularly fails ADP/ACP tests, and so the refunds adversely affect division 1&2 personnel more than division 3 personnel. It isn't practical to consider either 401(k) safe harbors or QNECs, because of the costs involved.

ANALYSIS

I believe the employer can successfully demonstrate that it maintains separate lines of business. However, I have determined that the lines of business do not satisfy the statutory safe harbor or the normal administrative safe harbors (for qualification). It therefore appears that the only remaining hope is to request and receive an individual determination from the IRS.

QUESTION

Has anyone had favorable experience with the Service in granting QSLOB status to a group such as this? If so, would the employer have to submit such an individual request on an annual basis? What arguments might be persuasive to the Service?

When must a "traditional" 401(k) plan, with a 10/01-09/30 plan year, have to have been amended to convert to a "safe-harbor" 401(k) for its plan year ending 09/30/00?

Thanks to all respondents!

Can a 501©(3) adopt a 401(k) Plan?

Is anyone moving forward with amending plans to eliminate optional forms of distributions in accordance with the newly-finalized regulations without waiting for approved language (LRMS) from the IRS? It seems like a fairly easy change to do without approved language (ie, simply eliminate the option with the effective date stated in the regs - earlier of 90 days after notice or first day of second plan year after amendment is adopted). I have clients that have J&S annuities in 401(k) and profit sharing plans that are very eager to get rid of them immediately. Obviously, waiting on approved language is the safetst approach, but I do not feel terribly uncomfortable with amending without the approved language.

Another issue: Will the IRS issue a DL on a plan that has been amended to eliminate an optional form of distribution in accordance with the new regulations now, or will it only issue a letter once LRMs are out? If no DLs will be issued yet, this would be a reason to wait on the approved language.

Last, when are LRMs expected to be issued?