401(k) plan has been in existence for 6+ years and the intention and participant communications is to have a 7 year vesting schedule. The plan as adopted reflects a 6 year vesting schedule. Curently tha plan is going through a conversion to another TPA. Do all prior forfeitures need to be re-calculated with interest? Does the IRS need to be involved? I am not of the amounts or number of affected participants.

just so no one else spends time spinning wheels on this one:

1099 link with hypeprep was not working (our ystem was 'hanging'. supposedly others have encountered similar problems. I was told there would be a fix shortly. In fact, the link was supposedly fixed, but another issue was also being addressed.

also having them investigate another issue with a plan that some distributions run at 4.0 and others distributions at 5.0. The distribution amounts were not showing under Utilities-->distributions. and the names of ees run at 4.0 don't show at all, only soc sec numbers.

hopefully I will know more shortly.

was also told you now need to run Processing-->Distribution Data, which will be a change from 4.0.

I have a case of an S-corp owner who just told us that he switched to an S from a C-Corp several years ago. This is in spite of the fact that we ask each year in our census! Anyway, he has a loan that he will pay off immediately. Can this be corrected through APRSC by repayment, deeming the distribution in the year the conversion was made and amending the owner's tax return for that year? Alternatively, must this corrected through VCR? Thanks.

Our company is trying to address the

regulations not allowing retroactive pre-tax

deductions for benefits. Because our employee's elections are often made past their normal eligibility date (1st of month after date of hire; date of event with family status changes) we often run into situations

where retroactive deductions would be necessary. I understand some companies have allowed after-tax deductions in these cases.

Because of the administrative burdens involved, we do not want to go this route. It is been proposed internally that we look at setting effective dates for benefits coverage for employees to tie to "when paperwork is received" if it is past the eligibility date, to avoid any retroactive deductions. However, in speaking with medical plan reps., they do not appear to be able to accomodate dates that are not tied to a particular "event date" such as "date of hire". How are others handling this retro-deduction issue?

For a one ee company, is it inappropriate to install a plan for 1 year and take deduction, knowing that in yr 2 the plan will terminate? ie. company will terminate.

Do split dollar plans for a top hat group need ERISA claims procedure language or any other specific language? It says at the beginning of Seciton 401 "This part. . ." doesn't apply to top hat plans, but I can't tell if part means section 503 also.

Do split dollar plans for a top hat group need ERISA claims procedure language or any other specific language? It says at the beginning of Seciton 401 "This part. . ." doesn't apply to top hat plans, but I can't tell if part means section 503 also.

Do NQDC plans need ERISA claims procedure language or any other specific language? It says at the beginning of Seciton 401 "This part. . ." doesn't apply to top hat plans, but I can't tell if part means section 503 also.

A plan terminated and there will be no further employer contributions to the plan. There is still money left in a forfeiture account. The plan document calls for using the forfeitures to reduce employer matching contribuitons. Our first thought is that the forfeitures should be used to offset plan expenses and we believe the plan document does allow this. But what happens to any forfeitures if there is still something left after offsetting all expenses? Can or must it be reallocated to participants?

I am employed by an educational institution. Earlier this year TIAA-CREF had calculated the max. monthly amount I could defer for 1999 under my 403(B) salary reduction agreement. I have currently been deferring that amount. I also have self-employment income from consulting work and have set up a SIMPLE IRA. Is there as maximum combined amount I can defer in a given year when I combine both the my 403(B) salary reduction and my SIMPLE? My calculations currently show that if I fund the max. $6000 allowable in my SIMPLE IRA I would by above 25% of my total net earned income for the year.

Can the safe harbor and facts-and-circumstances tests for determining whether a hardship exists and for determining whether a distribution is necessary to meet the hardship be mixed in the following ways (that is, can a plan document be written to allow for the following):

1) The hardship is for funeral expenses (a facts-and-circumstances hardship) but the safe harbor is used for determining whether or not the hardship is necessary (that is, the sponsor does not check other resources of the participant, but does suspend deferrals for 12 months, etc.)

2) The hardship is post-secondary school tuition (a safe-harbor hardship) but the plan sponsor checks the resources of the participants to determine if the distribution is necessary to meet the hardship (that is, does not suspend deferrals, etc.)

I am confused as to whether there is one set of safe-harbor rules which must always work together, or whether there is a separate set of safe-harbor rules for each of the 2 tests that can be used separately.

Any cites would be greatly appreciated.

I am trying to find the 402(g) limits for TSAs for 1990-1998. Can someone please list what the limit was for each of these years. I believe that 1998 was also $10,000 and that 96-97 were $9,500; however, I need to verify this, as well as to get previous years.

Thanks for your help!

The short answer is yes, you can have two profit sharing plans covering the same employees. One sometimes sees a variation of this to sort of get around the 401(a)(17) on compensation which applies to each plan.

However, having two 401(k) plans (or qualified cash or deferred arrangements within profit sharing plans, to be technically precise) leads to some rather punitive testing results. HCE deferrals to both plans are counted in each plan's 401(k) but only NHCE deferrals to that particular plan counts against that plan's test. There's a parallel rule for 401(m) testing I believe.

I think what you want is to freeze one plan and start up a new plan. As long as this occurs at the same time as the plan year end, the above rule won't mess up your plans.

According to Announcement 94-101, a plan is not permitted to have a "catch- all" hardship category. One plan document I've seen lists "Other heavy financial need of the participant or the participant’s spouse or dependents" as a hardship category. Is this an impermissible provision? If so, is it enough to simply never use this provision?

How does a payor employer repor retirement payments of a Nonqualified Retirement Plan to a payee? Would the employer use a 1099 R, 1099 MISC, W-2 or something completely different? Thanks.

In April of this year i tossed $2K into my Roth IRA (one account) for 1999. This money sat for a couple months waiting on a limit order (missed by 1/16...stock was 3 5/16, now at 10...d'oh). I then used $1850 of this to buy a stock which is worth around $900.

Is there any way i can recharacterize this year's contribution as a traditional IRA, and then roll it over into a Roth thereby getting a tax deduction of ~$950 on my investment ineptitude?

If so, how would i figure out the interest earnings on this year's contribution, keeping in mind that my previous IRA contributions are in the same account as my '99 contribution?

In a takeover situation, how would you "withdraw" a contribution that should have been made to the qualified PS Plan and was by error deposited in an inactive SEP? This was an accounting error, essentially, due to confusion on accounts. Deposit was made in 1997 for a 7/31/97 Plan Year. Thanks for all input...

First,I understand that a DB sponsor must pay a premium to PBGC... how is this determined?

Second,I also understand the defined benefit contribution made for an older employee can be greater compared to someone younger becuase of the time left until retirement, but is there anyway to adjust if the younger person is the owner or a HCE.

Thanks for any input,

Jason

In looking through our back pages of the prototype,it actually indicates that "loans shall not be granted to any Participant that provides for a repayment period extending beyond such Participant's Normal Retirement Date". Is that something just in our prototype, or is it part of the regs?

Anyone? Thanks!

I would assume the reason for going this route is you would run inton problems with the 15% limit in the profit sharing plan.

Another alternative (although you would incur the expense of a second plan)

is to have a money purchase at 3% (or more) covers top heavy, and then the profit sharing by class. then you probably wouldn't need to amen, so you save something there.

sorry, no experience with IRS in regards to amending often.