rfahey

I Had a call from a CPA on one of his clients. His client has a 3% matching SIMPLE IRA plan. An employee who became eligible 3 years ago never got into the plan because the investment company sales rep left the bsuiness. Nothing ever happened since. Now the employee is leaving and the employer wants to make her "whole". She is also expecting the last matching contributions also. Any ideas on who is at fault here ?? Can he just give her a check as a bonus for her forgone matching contributions and have her sign a hold harmless agreement ? Any thoughts would be appreciated ! Bob

Following Gary's post below is it possible to start off a SEP plan with 0 or 1 year eligibility and then amend it to 3 years later. How about the same idea with SIMPLE IRA plans ? Can you amend from immediate eligibility to the 2 year/$5,000 requirement ?

I have a top heavy 3% safe harbor plan for a medical group. I am getting 2 different answers on using comp while a participant ( for people who enter the plan on 7/1 ) I thought that if there are no other profit sharing contributions or forfeitures allocated that the 3% then only has to be paid on CWP. Any clarification would help ! Thanks !

If a client desires to start a new SIMPLE IRA plan effective 7/1/07 is the plan compensation for matching purposes only used from 7/1/07 to 12/31/07 ? In other words in this first year of the plan ( 2007 ) is 3% of compensation from 7/1/07 ( not 1/1/07 ) to 12/31/07 the highest cost that a sponsor can incur regardless of deferrals from employees this year? The fund companies are not willing to answer this question. Thank you !

Are Simple plans required to have a 12/31/year end ? What implications are there then for a corporate client that has a March 31 year end ? Are the company matching contributions deductible as paid each pay period thru the year? Any other bogeys to watch out for ? Many thanks.

Some fund companies are no longer providing plan documents for SIMPLE IRA's auch as AIM. They advised to use 5304 from now on. What is the difference between 5305 and 5305 ? Which do I use ? What needs to be written in Section V of the 5304 and provided to employees by November 1st ? Many THanks

My client inheirited an IRA from his dad in 2002. His dad was 69 years old. He missed the lifetime rmd deadline of 12/31/03. The fund company says he can only use the 5 year rule now. I read somewhere that he can revert to the lifetime RMD if he takes the missed RMD's for 2003 and 2005 and pays the excise tax. Is this true ? Any references for his CPA ? Thanks

Yes you can still do integration. Several fund companies have documents to allow this. Try Oppenheimer and American Funds -- Oppen can be integrated at any wage level; American can only do at the TWB.

Owner has wife on payroll in company with old SAR SEP plan. The ADP for the NHCE group is 2%. How are the owner and his wife computed for the test. His w-2 is 80,000 and hers is 10,000. Also what if their 2 kids are eligible and also on the payroll and each of the kids make $5,000. How is that factored into the test ? PS where can you find data on this family attribution area ??

Client dies at age 68 in 2000. Wife is beneficiary of his Profit sharing balance. She is 68 in 2002. He would have been 70.5 in 2002. She has never touched his plan monies since he died. Does she have to take RMD in 2002 becouse of his age? Or can she wait until SHE is age 70.5 ?? Thanks

A CPA just referred a client to me who has been audited for 2000 on his SAR SEP plan. He did not follow the ADP test rules nor the TOP heavy rules and the auditor is suggestion some significant correction procedures. There is a concern about other years also being opened up for audit as a result of this ( and the other years are incorrect too ! ) Does anybody have any suggestions on how to negotiate this with the auditor ?