What is the employer's maximun deductible discretionary profit sharing plan contribution?

- Total eligible compensation $1,000,000

- 401(k) deferrals - $50,000

- Matching contributions - $25,000

Answer $67,500 ?????

What is the amount of non-deductibel contributions for the profit sharing plan as of 12/31/96?

-Profit sharing plan was established on 01/01/94

-Plan provides for a discretionary employer contribution and employee voluntary after-tax contributions.

-Employer has sponsored no other qualified plans.

-Plan satisfied all nondiscriminiation tests since establised.

-NO contributions have been returned to ER.

The Plan has ahd the following compensation and contributions:

Compensation for deduction:

1994 100,000

1995 140,000

1996 160,000

Employer Discretionary Contribution

1994 13,000

1995 25,000

1996 22,500

Employer Voluntary Contributions

1994 5,000

1995 5,000

1996 5,000

Answer is $2,500??????

What is the refund (exclude earnings) to be paid to HCE 2 to enable the plan to satisfy the ADP test?

-None of the HCE are related.

-PY is 96 calendar year

-No matching or nonelective contributions.

-Gross compensation is used for testing.

EE, Gross Comp, Elective Deferral

HCE1, 150,000, 9,500

HCE2, 100,000, 9,500

NHCE1, 40,000, 1,600

NHCE2, 30,000, 1,500

NHCE3, 20,000, 1,200

Answer is $1,830.00 ???????

What is the maximum annual addition Participant A could receive in the limitiation period?

-Part. A participates only in the plan sponsor's profit sharing plan.

-Limition period for the plan is Jan 1, 1996

-Part. A. has gross compensation of $58,000 for the limitiation period.

Answer is $13,750. explanation?

What is the total QNEC required for the NHCE in order for the plan to pass the ADP?

-None of the NCE are related

-The plan year is 1996 calendar year

-No other matching or nonelective contributions

-All HCE are elgiible for QNEC

-Gross compensation is used for testing

EE, Gross comp, elective deferral

HCE1, 150,000, 9,000

HCE2, 100,000, 8,500

NHCE1, 50,000, 2,500

NHCE2, 50,000, 2,500

NHCE3, 25,000, 625

Anwser is 862.50. Can't get there.

What is the maximum deductible discretionary profit sharing contribuiton the meployer may make for 1997?

- ER sponsors a money purchase and a 401(K)

-Employer's tax year and both plan years are calendar years.

- money purchase contribution = 5%

- Profit sharing plan provides for employee elective salary deferrals, a matching contribution equal to 50% of each employee's deferrals and a discretionary profit sharing contribution.

-NO forfeitures in 1997

Employee, 97 gross comp, 401Kdeferrals, 401 K match:

A, 200,000, 8,000, 4,000

B, 100,000, 5,000, 2,500

C, 30,000, 0, 0

D, 20,000, 2,000, 1,000

Answer is $22,950

HOW?

What is the amoun tof excess contribution to be refunded to HCE Part. A:

The total amount of excess contribuiton that must be refunded is $4,700.

HCE deferrals:

HCE A 9,500

HCE B 8,600

HCE C 4,700

Answer is 2,800. Need explanation.

What is the amount of matching contributions that may need to be forfeited to maintain the matching contribuiton rate of highly compensated participant A at the level provided for in the plan document?

- Part. A deferred $9,500 in 1997

- Part. A compenstion is $100,000 for 1997

- Part A received a distribuiton of excess contributoins of $2,500

- Plans matching formula is 50% of the first 6% of comp. deferred.

Answer is $0.00.

Need explanation

Determine the amount of profit sharing contribuiton to be allocated to Emplyee A for the PY ending 09/30/97:

-Total ER Contribution - 30,000

-Plan's integration level is the taxable wage base.

- 1996 TWB = 62,700

- 1997 TWB = 65,400

-Maximum possible integration

-only plan - no employees related

Part. Comp.

A = 160,000

B = 80,000

C = 40,000

D - 20,000

Answer is $17,409. I can't get to it??

A client has a question regarding whether or not a Church Plan is required to pay PBGC premiums on their defined benefit plan. They have been paying the premiums all along but have recently heard that if they are a church, they do not have to pay. Is this correct?

A Company will pay a former employee a lump sum settlement. Amounts will not be paid in accordance with Company's STD's policy, although the amount would equal aggregate amount of payments individual would have received under policy. Amounts are from employer's general assets. While general rule would treat these amounts as wages subject to withholding, does result change because amounts are received as part of settlement.

We have a client using a standarized 401(k) plan document, with the provision that forfeitures will reduce match contributions.

There are no highly compensated participants in the plan. The match is $1 for $1 up to $1,000. The company has high turnover and wants to net the match contribution. For example, assume during the '98 plan year 3 participants deferred $1,000 each. All three particpants quit before becoming 20% vested. Can the employer contribute a $0 match on their behalf? Or must the employer contribute the $3000 for '98 and then have it forfeited out?

Thanks for your help.

Is it possible to set up a 401(k) plan with a vesting schedule tied to the participation in the plan versus the length of service?

Thanks for any input.

When an Employer terminates his business in essence the Qualified Plan is also terminated as there is no sponsoring employer. Often times the Employer abandons the plan and the participants are unable to receive a distribution as no Plan Administrator is available to authorize the distribution. What steps should the Trustee (directed) take to terminate the plan and distribute the plan assets? Should these participants become fully vested? How should the final 5500 be filed? If the trustee signs is he taking in the Plan Administrators liability? Any comments and suggestions are appreciated.

Does anyone have an effective definition of disability for a Defined Benefit retirement plan? Would appreciate e-mail at jedens@surfsouth.com, or reference to aan available source.

Thanks

JE

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Are there any insurance companies that offer health benefits to retirees under age 65 at 100% of the cost to the retiree until they reach age 65? Then they would go on Medicare.

In other words, give them the opportunity to get health coverage at a group rate.

Can you forfeit a lost participant's balance after a number of years? Plan document says you can forfeit, but not until age 62 or Normal Retirement. Plan sponsors agree to repay into plan participant's balance if he is located. Balance is less than $10 and the cost to maintain his account is greater than this per year. Does anyone think it would be acceptable to forfeit in a case such as this? Any other suggestions?

We have a client who established a 401k plan 1/1/98. He had an existing ps plan at the time. January 31, 1998 he terminated the ps plan. The distributions still have not been made from the ps plan but will be soon. Are there any problems here tied to successor plan rules?

Any help would be appreciated.

We have taken over an account where the client has made loans out of his IRA to non-family members. The IRA holds the notes as an asset of the IRA and the repayment of the loans are considered earnings on the investments that are contributed to the IRA. The owner of the IRA is under 59 1/2 (if this matters). Is this a prohibitive transaction?

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I work for a small insurance company who is considering converting our defined benefit plan to a 401(k). Has anyone completed this task? How does it affect employees who are fully vested and those who are not fully vested? If someone could let me know all of the "implication" of switching, please let me know. Thanks in advance!