Our firm has recently taken over a plan where the company has excluded all Collectively Bargained Employees. Several of the owners are themselves collectively bargained employees who receive compensation both as Union Employees and as Shareholders in the Corporation. According to regs

1.410(B)-6(d)(2) hours of service performed while a collectively bargained employee should be treated as such and those hours worked as non-collectively bargained should be treated as such. My question is what does this mean. It is easily said that the Shareholders work over 1000hrs for the company as Nonunion workers and therefore would be considered eligible for the 401(k) plan. That being the case, what compensation do I use for purposes of the plan? the document states 3401(a) wages. Does that mean since the employees W-2 wages include the Union wages I can count them? or should I exclude the Union wages as ineligible compensation? Please advise.

I believe $10,000 is the 1998 deferred compensation limit.

Where can this be found in IRS technical releases?

Has the 1999 deferred compensation been announced? If so, in what IRS source can it be found?

When a benefit accrual rate is reduced prospectively or frozen, DoL regulations require a 15-day (or is it 14 day) notice.

Is this notice required when a 401(k) plan changes the employer match from 25% to a match that is at the complete discretion of the employer? Here, the guaranteed match is decreasing from 25% to 0%, but the employer may decide to match at the end of the year.

If this were not a profit sharing plan, the answer would clearly be yes. But since 401k plans are profit sharing plans, is the DoL notice required?

In March, 1998, a company declares a p/s contribution for the plan year ending 12/31/97. This is accrued and reported on participant statements. The contribution is not made by the time the 1997 tax return is filed, but is not deducted on the tax return. To date, the company still has not made the contribution.

Can the company make the deposit now and deduct it on its 1998 corporate tax return even though it was allocated in a plan year covered by another return? Deducting on the 1998 return would not create a 404 problem.

can anyone please tell me if mandatory federal withholding applies to an ERD from a qualified retirement plan for less than $200, or does the de minimis rule still apply? is there somewhere on the web where i could find the treas. reg(s) to support this? thanks in advance for any and all help.

If an IRA investor wants to request a PLR from the IRS to get their blessing on substantially equal, periodic payments over their life expectancy from one of their many IRA accounts to avoid the 10% premature distribution additional tax, what is the user fee? Where do I find this information for 1999?

If employer wants to make the 3% nonelective

safe harbor contribution for NHCEs, can it make the same contribution for HCEs or would the HCEs' contribution (without another 3% for the NHCEs)cause plan to flunk 401(a)(4)? If this is OK, can employer also contribute 3% of participants' excess comp (ie, comp in excess of TWB) if plan is integrated?

Has anyone gotten any sense from the IRS lately about whether a cash balance plan with a low, but not variable, interest rate accrual (4%, in my case) can assert that the cash balance account balance is the present value of the accrued benefit? I'm aware that this may not be permitted under the proposed rules of IRS Notice 96-8. However, I'm wondering how the IRS has been reacting to these kind of plans in practice over the last few years.

We all know that you can deduct NC and 10 year amortizations, because IRC 404 says so. There is one other part of 404, under

404(a)(1)(ii), which talks about spreading deductions out over at least 5 years. Has anyone seen this used in practice? Is this trying to say that you really should not set up a plan at age 64 (if NRA = 65) and take a big deduction right away? Any insights/experiences would be appreciated. Thanks!

Are there any alternative ways to do the ADP test in a plan's first year? Please advise.

Not only is there not a de minimus rule for minimum required distributions, but the IRS has rather specifically said that's there no de minimus amount. See the last sentence of Q&A A-5 in Prop. Treas. Reg. 1.401(a)(9)-1.

There may be other ways to resolve your dilemma. If the vested account balance never exceeded $5,000 as of the time of any prior distribution, the plan document may require a lump sum payment. Starting March 22, 1999, a plan may provide that the participant be cashed out unless the vested account balance exceeded $5,000 at the time of the first age 70-1/2 payment.

Another possibility is to make the 70-1/2 withdrawal permissive, not mandatory, for current employees who aren't 5% owners or to eliminate it altogether if the plan has a 59-1/2 withdrawal option that permits partial withdrawals at least annually.

Your message is a bit confusing. If you believe that an indivivdual who gets a 0% allocation is treated as a participating employee under 410(B) coverage testing, you are misinformed. See 1.410(B)-3(a)(1). The exceptions in 1.410(B)-3(a)(2) would not apply to a profit-sharing allocation.

If you are looking for proof that these employees are not considered covered (and therefore part of the denominator, but not the numerator, in the ratio percentage test), see the regs cited above.

Is it permissible to name a Roth IRA as a limited partner in a real estate limited partnership where no capital contribution is required?

Does anyone have an address for contacting the company that makes Quantech, and a contact in their sales dept? Just the address is really needed, sale rep would be helpful. Thank you!

What would you do if you had a plan sponsor who is knowingly failing to comply with the terms of the plan document? Three certified letters have been sent to no avail. Their response clearly reflects their inability to accept the potential liability.

Anyone ever heard of an employer "prefunding" a match contribution (i.e., making the 1999 contribution in Dec. '98) and taking the deduction in the year it's funded, instead of the year to which it's applied? It's a standard 401(k) plan. Their CPA (KPMG) is telling them this is okay. I haven't heard of this before.

I've heard from various sources but have never been able to confirm in writing that certain church-sponsored 403(B) plans allow a minister to deduct his/her housing allowance from the taxable amount distributed from the plan after the minister has retired. Anyone have more substantial info on this deduction? Would this apply to any 403(B) plan/contract, or does it require specific plan or contract provisions? Does it apply to both salary reduction contributions or just to ER contributions? Thanks!

I have a participnat in a 401(k) plan who wants to aggregate his RMD's between his IRA's and his qualified plans. From my past experience with IRA's, I know that it is fine to aggregate RMDs between 408 plans.

Section 401A(9)does not make any mention of whether aggregation is allowed or disallowed. Common sense would say that it would not be allowed since a 401(k) does not fall under the same rules as section 408. However, the participant is demanding positive proof that he can not aggregate. Is there anything in the code that specifically says that aggregating RMDs between an IRA and a qualified plan is prohibited? Thanks for any help anyone can offer.

If a plan requires a participant to be employed on the last day of the quarter in order to recieve a matching contribution, how does this effect 410(B) testing with respect to the 401(m) piece. For example, if an employee is employeed on the last day of the first quarter and recieves a match, but terminates in the middle of the second quarter, does he or she benefit under the plan for the purposes of 410(B)?

I am looking for some help in putting together a sample Compensation Package in Proposal form to submit to an employer for a possible position. They want me to submit to them my requests (salary, bonus, etc.) and I'm looking for some samples or ideas.

Thanks

[This message has been edited by JimBob (edited 12-28-98).]