Lori H

My thinking is NO, they don't

I agree Bird. I think we have at the very least an affiliated service here and the "new" employees of the LLC will be participants since the LLC will be added on as a sponsor of the plan. and get this.....i couldn't get a straight answer from the LLC members or their cpa when i asked if the LLC was taxed as a partnership or sole pro, corp or s corp.

it is. it really is. its like pulling teeth to get their plan statements too. and they are advisers!!! go figure.

Honestly, I do not know if we have a controlled group here and when I raised that question, I kind of got a blank look from the 2 members of the LLC. The employees of his company will be employees of the LLC effective 1/1/09 and the company the 1 member maintains will just remain open in order for him to receive ins. commissions. Both companies are employee benefits firms. They handle investments

a small company(ABC) has a 4 participant safe harbor 401. The owner of ABC is also a member of an LLC that currently has no employees other than the 2 members. The owner of ABC wants to see what he can do as far as a plan for the LLC. He is currently a participant in the ABC plan. Ultimately the employees of ABC will be employees of the LLC. my thinking is to add the LLC to the ABC plan as a participating employer via plan amendment. Next year ABC will no longer be a company and all ABC employees will be retained by the LLC. Would proper procedure be to amend/restate the plan showing the LLC as the new plan sponsor for plan document and annual filing purposes?

a current self directed 403(b) plan, which offers 3% qnec across the board as well as employee deferrals, is being told by their provider to shut down the 403(b) and to move to a 401(k). Alternatively, they are saying if they want to stay 403(b) that they will have to close out the current 403(b) that is not pooled and open a pooled 403(b) account and that they have until June to update for new 403(b) regs. Some supervisors are worried about the employees understanding this. Any thoughts would be appreciated.

With market tanking, is there anything on the horizon that may provide relief to an underfunded DB plan? Thanks

Thanks Tom.

I apologize if this topic has been touched on before, but if a safe harbor that utilizes the basic safe harbor match....is there a limit on how much the plan can fund towards an additional employer match that is subject to vesting? Lets say they wanted to do a 50% on deferrals up to 8 percent of comp in addition to the Safe Harbor basic match? Thanks

TYPO!!! denmarks ok they do have the QJSA in the plan.

i was not implying adding a 401k feature to a mpp, i was stating to restate to a 401k and this pension plan does not offer QJSA as a form of dist. Lump sum only.

a current mpp plan wants to add a 401(k) deferral only option to the plan and maintain the current pension funding. in order to do this they will have to adopt a 401(k) plan doc and define the current pension formula as a profit sharing???? is this correct??? i don't recall any 401(k) docs having pension funding features in them. Any other steps I might be missing? Besides corp resolution and participant disclosure?

A 7 participant profit sharing plan with a 1965 effective date appears to have not been restated for GUST nor any of its following amendments. The plan has a large financial institution acting as corporate trustee and the client has been paying them appx $6000 annually for this role. Most recent document is an unexecuted doc from aforesaid financial institution dating june 1994. Recently, (9/25/08) Plan sponsor received correspondence from the plan trustee stating that they (the trustee) need copies of restatements/amendments since 1994 in order to be tax qualified. They also bring up EPCRS and VCP and then state they want to resign as trustee and await appointment of successor trustee. Is this trustee on the hook?

a husband/wife sole proprietorship who file taxes using ssn, would have to apply for an EIN in order to fill out the 5500 EZ info, yes?

rll, why do you consider diversification inside an esop a bad idea? I'm curious. I think in this particular plans instance and in order to simplify things, the trustee is going to distribute to the participant the cash value of the diversified stock. Wouldn't diversification in future years apply to only on the growth from one year to the next and not the entire account?

2 participants 1 Key Employee, Comp $283870.84 1 Non Key, Comp $36271.39

This is how their current plan doc(American Century) reads pertaining to an integrated allocation: First, a percentage of the contribution equal to his or her excess comp for the allocation period divided by the excess comp of all eligible participants for the allocation period, but not to exceed his or her excess comp for the allocation period multiplied by the Permitted Disparity Percentage, and Second, a percentage of any remainder of the contribution equal to his or her comp for the allocation period divided by the comp of all eligible participants for the allocation period. If a minimum contribution is required under Section 10.2 for a plan year, the employer profit sharing contribution will first be applied to make the minimum contribution, then any remainder will be allocated under the preceding rules. Section 10.2 Minimum contribution if plan is Top Heavy An employer PS Contribution will be made for each participant who is not a key employee and whose termination date did not occur during the plan year in an amount equal to the lesser of the following: 1) the highest contribution received under the plan or a related defined contribution plan for the plan year by any key employee OR 2) 3% of his testing comp for the plan year. Therefore Step 1, should be the 3% T.H. minimum ONLY to the non-key employee? Step 2 is 5.7% of comp in excess of the TWB? Step 3 is the remainder of the contribution allocated based on a comp %?

In a $22K allocation the key employee receives appx $200 less under the American Century doc. compared to the formula in the MassMutual doc. Perhaps I am using the wrong Permitted Disparity %. Irregardless, the Mass doc states for integrated, top heavy plan, 1st step is 3% to all participants, 2nd step is 3% times participants excess comp., 3rd step is 2.7% times sum of total comp and excess comp and 4th step, if any funds remaining are allocated on a comp percentage. American Century has a 3 step integrated TH allocation. Mass has a 4. Should there be a difference?

Hi, A plan is being amended to an integrated allocation from a comp percentage allocation. Plan is top heavy. The plan currently maintains an American Century doc. It states that under Top Heavy, first there will be an allocation of 3% to all eligible participants. Second step is an Excess Comp allocation multiplied by the Permitted Disparity Percentage. In this case we are using the TWB for 2007 of $97,500 and therefore a PDR of 5.7% (225000-97500)*.057 = 7267.50 is the second step allocation. The third and final step is the remainder of the contribution allocated on a comp percentage basis. This differs from a Top Heavy Profit Sharing allocation in a Mass Mutual Corbel prototype and in fact is less beneficial to the sole Key Employee. Am I missing something?

Thanks Sieve. I agree. Have a good day.l

ok, yes, i recall now that you can have the 2 schedules, but anyone who utilizes them, must like making their life difficult. Let me ask you this: if an ESOP that has no intention of further funding, OUTSIDE REALLOCATE FORFEITURES, past 2006 and will most likely be terminating in the near future, then they can and perhaps should, operate the plan using the 7 year graded?

sieve, so a non leveraged ESOP that makes a contribution, which this plan does not, must have a 6 year schedule. the draft of the restated doc, mentions nothing of making a contribution after 2006, it just states "provided however, that in the case of any participant with at least one Hour of Service after, 2006, the following normal vesting schedule shall apply...." six year graded. Your last sentence in your first para has me a bit confused

an ESOP that had a 7 year graded schedule, the new restated draft doc states that any participant who has an hour of service after 2006 will now be on a 6 year graded schedule. Is this now the case for all ESOPs who had 7 year graded?

A small DC plan is terminating. A participant is deceased, his wife is deceased and there are only children and step children available. The plan is wanting to close out his account. Can they pay the balance(appx $5300) to the children and be done with it? There was no estate trust set up.

any thoughts????? after a month trying to get this info for a client, the actuary we use offered us this response: "I do not have good news. After reviewing the Fasb 158/132 requirements with our actuary and Evaluating our software system we do not have the ability to do these calculations without purchasing Additional software. Since this is the only plan that we service that would require additional FASB Calculations it is not feasible for us to purchase the additional module. I apologize for putting you in this situation but I think you understand this business decision." :angry: