austin3515

Should point out that you did not need to use the best performing fund. I think you were working off the old VFCP, not the new which came out I think in May? Anyway, the DOL's got a web-site and everything to calculate the lost earnings just based on the underpayment rate.

I think that makes the most sense as well. That makes 2x I got the same answer AND the same explanation. On top of it, it makes sense to me! THANKS!!

Participant terminates in 2002 and is rehired in 2004. Participant has been reported as a B (simply to revise the balance information) for the last couple of years. In 2004 would you report her as D? Or simply leave her off the SSA? Or something else altogether?

Tough quesiton, and I think you could make 2 different conclusions: 1) The 3% SH is a component of the nonelective portion of the Plan. Therefore the 3% would apply to the full year, because PS (and nonelective) was in place for the full year. 2) Some plan documents are worded that compensation is recognized "while a participant in the portion of the plan for which the definition is being used." Based on this, you could argue that the portion of the Plan is the SH which means that you could use a short plan year. In support of this, it seems illogical to require the 3% SH for a period during which the Safe HArbor relief is not being sought. If your plan is not explicit, I think you need to choose between the 2 above. Recognize of course that your more apt to need to defend decision 2 then decision 1.

I've seen it before...

That's a different question, and yes they can (depending on the prototype). Most will allow this because your situation is not uncommon. It's called a multiple employer plan because two controlled groups (i.e., two employers) are in the same plan. Although there's one plan, most of the qualification requirements, such as coverage and nondiscrimination, are performed separately for both employers.

It is also possible that the plan is written to exclude overtime. Why anyone would do that in the EGTRRA world is beyond me, but not everyone eliminated the old provisions. (i.e., pre EGTRRA, there was incentive to limit the amount of deferrals because they were in included in the tax deduction limit for pension contributions, so limiting deferrals was common).

After spending a lot of time thinking about this and researching, I'm inclined to agree with you... I think most of my experience has been with Plan's that a 3rd party bank do all the withholding anyway...

Life is easier that way. I've never seen a separate TIN for a plan. Is having separate TIN's the norm?

We do not have separate EIN's for the trust. Also, in the 945 instructions early on there is a note that says to ensure the same name and EIN are used consistently. So it seems that the Company's name should show up on the 1099-R? Because only one 1096 should be filed per EIN?

Single Employer sponsors 2 plans, a 401(k) and an ESOP. Each has distributions with withholdings for the 2004 Plan Year. 1) When preparing 1096's for the 1099's should one or two 1096's be prepared (ie., one for the taxpayer/employer as a whole, or one for each Plan). 2) Same question for the 945. 3) So in summary is all of this reporting (1099, 1096, 945) performed at the Plan Level or the employer level? Any thoughts are greatly appreciated.

It would only take a few hours to crank out a 5500, right? Why not do it? The final 5500 filed would be an amended return, so no DFVC fees. Would the second one be due already? If so, you would need the DFVC program for the second year, but for small plans the fee is not terrible... Perhapd knowing the dollar amount would help. For $500 bucks I wouldn't bother, for $50,000 I would (doubt it's that high for 5 people)...

Bird's on the money here... The only economic difference (as someone said earlier) is the double taxation of the interest paid in. For the purpose of analysis you have to assume the same rate of return. Presumably, on a risk adjusted basis, the expected rates of return will always be equal anyway.

Yes, if taxed as a corp., then treat it like a corp for all purposes. So if the owner gets a W-2 from the corp., he can defer from those wages. Even if the CORP lost money (i.e., because the corp is a distinct entity, where as a partner in a partnership is not).

No formal election. Those rules can be avoided by design. Make sure elect NOT to disregard rollovers in determining the cash-out provisions.

Is he taxed as Corproation or a Partnernship? There is some controversy on these boards regarding whether or not an LLC taxed as a partnership can give the owner W-2 wages. My opinion is that if your a partner or self employed, you don't get a W-2, your income is the income of the business. So if the partnership has losses, you have no income from which to defer. I think the majority agrees with this, but we shall see! But if your being taxed as a corporation, none of that matters. W-2 wages are wages from which you can contribute 401(k). Now if your taxed as a partnerhsip, but receiving a W-2, you're in unchartered waters - at least the IRS has not chartered them to the best of my knowledge...

Long as there's no nonelective money, yes. That incldudes reallocated PS forfeitures (i.e, if there are any reallocated PS forfeitures, your subject to TH).

The point is to get in trust because the money is then more secure, i.e, because once the money is in trust to take it out for the employer's own use is ver very bad. That's like embezzlement! At least a PT... Much different than delaying the deposit of the deferrals to play the float... Also, the protection of the fdielit bond is availalbe if the trustee does steal it.

I couldn't disagree more. The law is the law, and if you can segregate it once a week, you better deposit once a week. The point is that if your TPA's fees do NOT impact when YOU can segregate. It's worth noting that I have heard Dingwall himself say that depositing to a checking out each week, w/monthly allocations is fine. He doesn't even care if it's interest bearing. He just wants the money out of the grubby, untrustworthy paws of the plan sponsor.

Anyone have a link to where that is in print? Like a Q&A posted on ASPA's page or something?

http://benefitslink.com/boards/index.php?showtopic=23366&hl= http://benefitslink.com/boards/index.php?s...opic=23509&st=0

http://www.dol.gov/dol/allcfr/Title_29/Par...R2530.203-2.htm

There are at least a few posts on these boards about leaving anyone with zero comp out of the testing. Try doing a seach for "0 compensation" or "no compensation."

I think you would need a PT exemption from the DOL. I think they'll want to weigh in on the rate of interest used. They'd probably go for it though, seeing as how they generally don't like er stock in the Plan.

None taken