four01kman

You need to consult with a securities attorney -- sooner rather than later.

New vesting schedule applies to money deposited or credited after the effective date of the change. Old vesting schedule continues to apply to money deposited or credited or earned prior to effective date of change. Yes, you would have to maintain separate accounting for the two vesting schedules.

If the trust is a business entity, which in this case it certainly sound like it is, than I see no reason why it couldn't sponsor a retirement plan. The type of retirement plan would be dependent on the objectives of the plan sponsor for the employees.

yes, you will have trouble. You need to run the laptop on battery periodically and run it down. If you don't do this, the battery will go dead on you when you least expect it. I know this from personal experience.

I think you have to have the plan provide for the automatic increases

It seems to me if the employer (or the employer's payroll service) can identify the amount of the payroll taxes to be remitted, they also can determine the amount of 401k deferrals at the same time. Therefore, it seems reasonable to me whatever the amount of time it takes to accomplish the first task should be the amount of time required to complete the deposit of 401k deferrals.

May be able to do it if all such lawyers are HCE, therefore no discrimination in favor of highly paid

I think the issue is equity in terms of dollars. Many employers will pay 100% of the single employee's health care cost. That then sets the floor for the married employees in many cases. Of course,employers are free to do what they want so long as it is non-discrimanatory. But considering the cost of a family's coverage can be as much as 3-4 times a single, revisiting the issue for employee morale may make sense.

I believe Code Section 1562(a)(2) or (3) answers the question. No, I don't think there is a controlled group here.

Two thoughts: (1) exclude all Japanese nationals; (2) exclude employees covered by a non-US plan (assuming they are covered by the parent company's plans. Either of these should work as a non-discriminatory class.

I seem to recall a line of IRS letter rulings about "mistake in fact" and "mistake in law" about 10 or 15 years ago. I don't think the situation you outline would fit either. There isn't a mistake in fact, because the fact causing the contribution -- the insurance company bill -- wasn't incorrect.

You have to do it the other way. Put the $ in a non-qualified, and then to the extent allowed, transfer to the qualified plan. There are a bunch of letter rulings on point.

HSAs and 401ks are designed to satisfy two different life events. The ability to accumulate money in an HSA for future health care costs is a wonderful benefit. The annual amount that can be contributed is no where close to what is needed to provide for retiree health care, but it is better than what we had before HSAs. Distributions from 401k plans prior to retirement (generally age 59 1/2) are taxed as ordinary income, so the ability to make a withdrawal is nice, but doesn't compare with the HSA's ability to provide tax-free medical benefits.

The first issue that comes to my mind (beleaguered as it is by two hurricanes with a third on the way) is whether the current account balances of all non- or partially vested participants will be able to have the "better" of the two schedules apply for at least a portion of the next five years with respect to balances accrued prior to the effective date. If this is the case, then the effective date probably can be retroactive to the first day of the current plan year.

Natural disasters are not part of the "safe harbor" exceptions to plan distributions. Of course, plan sponsors always can add additional exceptions.

It is my understanding the "same desk" rule only applies to a business reorganization of some kind; that is, a new owner, or a merger and acquisition transaction. This situation seems different in that a new business organization has been formed. I would expect the prior 401k plan could (would) distribute based on separation from service.

Sure you can. With a discretionary matching program, you can make it whatever you want. But...you have to let employee/participants know what it is. You will get the best effect from a matching contribution if you announce it before the beginning of the "year", because participants will know if they contribute, what they will get. By announcing in the middle of the year, (without knowing the provisions of your plan) you will need to have the ability to enroll participants in the middle of the year. Also, I am not going to go into the possible discrimination issue if only the highly paid employees sign-up in prior to or at the beginning of the year, and the non-highly paid employees can't (or are not allowed to) join after the announcement of the mid-year matching contribution.

The employer would probably take the deductions as contributions to pension plans. From an employee perspective, the deferrals are never received as income.

Employee is limited to employee contribution amount plus an amount equal to Medicare supplement, if purchased, for spouse age 66.

Would you believe "informally" funded. The asset belongs to the organization, but there is a contingent liability. Funding the plan normally would mean the asset belongs to the individual, subject to forfeiture. Unfunded generally would mean no assets to support the promise to pay.

Now, now, Blinky. How can a Plan possibly commit murder? I thought only "real" people can do that.

Is there any reason as sub-S corp can't esablish an employer-sponsored HSA?

Certainly a fiduciary questions. If employer stock and the employer want to make employees feel as owners, pass through voting generally occurs. Obviously, it is much easier in a public company than a closely held one. For non-employer stock or mutual funds, the putative owner is the Trust. The Trustees have the obligation to vote. The Trustees can, if allowed by the Trust, pass the voting through to plan participants. My experience is not only are the votes not passed through, in many cases the Trustee does not vote either.

That seems right to me. Once the funds are transferred to the qualified plan that meets the rules (other employees), it appears all amounts would (should) be protected. Interestingly, I know several states have allowed the "recapture" of transferred IRA money to qualified plans. What I don't know in those cases is whether any other employees were covered by the plan.

Final regs issued in the 3/24/04 Federal Register, pages 13769 - 13786. Haven't had a chance to read them yet.