What is the ADP for the HC gropu for 12/31/97?

-ER makes a QNEX totalling 3% of eligible comp to all eligible ee's including HCE, to satisfy the top-heavy minimum required contribution.

-ER Makes no other nonelective contributions

-Plan does not allow employee after-tax contributions

-Gross comp is used for testing

-All NHCE are nonkey

Part, deferrals, Comp

A, 9500, 200000

B, 0, 130000

C, 4000, 80000

Answer is 6.65 Help

What is Part. A allocation of ER contribution for 1997?

-profit sharing plan

-Calendary year

-top heavy

-all eligible participants, including key-employees, are entitled to receive the top-heavy minimum contribution

-Maximum permitted disparity allowed by IRC 401(l)

-Integration level is TWB for 97 $65,400

-ER contribution is $9,500

Part, Key Employee Status, Gross comp

A, Key, 150000

B, Key, 98000

C, Nkey, 15000

Answer is $5,662. Help?

What is the excess contribution amount to be refunded to Participant D to satisfy the ADP test for 12/31/97?

ADP for HCE = 4.5

Max ADP which allows to pass test is 3.7

Part, Deferrals, Comp

A, 4500, 150000

B, 7000, 140000

C, 3000, 100000

D, 6300, 90000

Answer is 1,240 Explanation??

For situations in which the qualified plan beneficiary is a minor child, the plan would like to make an administrative practice of making the payee name the actual child beneficiary's name. Will the guardian have any difficulty negotiating such a check? Would using the child's name be a good or poor practice?

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Is vested employer money available for hardship withdrawal (provided no limitations in document)? Thanks

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How does the master trust business advertised by large banks differ from the single-sponsor master trust arrangements which are required to be reported on the 5500? More specifically, how do large master trust arrangements work?

[This message has been edited by genfre (edited 06-01-99).]

[This message has been edited by genfre (edited 06-01-99).]

If COBRA covers a self-insured medical expense reimbursement plan under Code Sec. 105(h), but is very unlikely to be invoked (due to fact that "premium" for COBRA coverage will cost 2% more than the reimbursements themselves)how best to handle COBRA notification requirements - without confusing employees as to what "benefit" they would receive from COBRA?

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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.