Lori H

Bird, do you mean replace the cash value with cash from outside the plan? Say for instance the cash value was $200, 000 and this doctor just happened to have that in his regular savings account. Just sub the savings for the cash value and assign the policy to him? Thanks

The management company is a Safe Harbor and does have a higher number of HCE's. The other is a group of hotels with a non matching 401(k) and 3 month eligibility requirement. This plan was established after the management company.

Nondiscrim testing has always been done separately. The plans have been operating as non affiliated and are in the process of checking with their corporate atty to determine if they are in fact an ASG.

A doctor in a 3 participant pension plan has a USAA life policy with a face amount of $300K and a cash value of over $200K, they have to pay quite a bit in PS 58 costs each year on the policy. The doctors wife was inquiring as to how this may be avoided and if the policy could be assigned in the doctors name rather than the plan. I explained this would possibly be a taxable event. He is 65 and still in practice. If he gives up the insurance he loses the face amount. Is he stuck with these costs? A 1035 exchange???? I always felt life policies had no business being held in a qualified retirement plan

Suppose two companies, each who maintain their own retirement plans, are determined to be an affiliated service group under the management organization definition. Yet they have operated independent plans with different eligibility requirements and employer funding. Definite VCP candidate?

Is the only available option to exclude bonuses to restate the plan to a Non-standardized prototype and submit to the IRS for determination?

Found em. Thank you David.

A participant wants to terminate, get paid out her vested balance and the come back the following week as a part time employee. Quite obviously this participant wants access to her funds. While this does not seem like an option, review of the plan document does not specifically address such a situation. What is to prohibit such a distribution? She just shows up as a rehired participant with a distribution on the 2007 census.

Should these be with held in such deposits to a plan? My thinking is absolutely.

Very interesting posts. Thanks for the information. This builder was initially wanting to fund the plan with personal non qualified investments, after explaining that the plan had to be funded with the corporate account, he wasn't so warm with the idea of a DB plan. Might present the cash balance option to him.

412(i)???? withOUT life insurance??? what if he underfunds the DB plan? What excise tax penalty is he looking at?

A builder, who earned in the 7 digits last year, is concerned that the market might go south and he would not have the funds to fund a plain, one part DB plan in a down year. I understand that the funding requirement is somewhat based on income, yet what other considerations should be given if in fact he can not fully fund the plan? He wants to put away as much as possible. What would be the pros/cons of overfunding the plan in a good year, to make up for a possible future underfunding?

Nicholas, 1) Very little time will be alloted to maintaining your plan on a monthly basis. With 5 employees, you will have enrollment, which the advisor will assist you with and submitting with holdings. 2) I would hire a TPA(Third Party Administrator) to oversee your plan on an annual basis. A plain vanilla 403(b) with employee/employer contributions SHOULD run no more than $1000 annually to maintain. This will take some of the administrative burden off of your hands. It should also keep the plan in compliant with the regs. 3) No 4) Yes

Simply include it in our cover letter with our annual admin. It usually amounts to very little as well per client. Lunch money, however, we get quarterly payments which are broken down by plan. Also, it seems as if these incentives are being amended towards producing new clients(3 a year seems to be the standard) and since we do not sell/promote products, I doubt this incentive will be much of an incentive for us.

Would you generally use the Ordinary business income Line 1 Part III or the Total to Schedule K-1 which generally has deductions and shows up in Part II section N when running the ADP and the def. of comp. has no exclusions?

We are a TPA firm , we handle small one participant DC plans with no plan exceeding more than 200 participants, so we do not see transactions dealing in the 7 digit range, 6 even. You practically have to kill someone to get a plan disqualified. I'm not saying we are infallible, but the high cost of E&O and its increasing premiums would force me to cut benefits

We do A LOT of hand holding. If the asset manager wants to provide us what is usually a small percentage of the plan assets, then I have no problem accepting that as a payment from the manager and disclosing it to the client.

Our government in action. A participant just received an IRS notice that they disallowed their IRA deduction for 2005 because their modified AGI exceeded the $80000 limit for married couples filing jointly who both have a retirement plan at work. So if you have a retirement plan and receive a contribution whether discretionary as a profit sharing or mandatory as in a Top Heavy allocation, you can not deduct an IRA contribution?

So I was wrong it is the lesser distribution amount and the greater divisor.

This might be a silly question, but I want to do it right. An owner is 70.5 july 10th 2007 has an account balance as of the last valuation date(9/30/06) of 2,913,757 and his wife, who is the beneficiary, her DOB is 11/2/43. It states if the participants spouse is the sole beneficiary, then you use the divisor in the joint life expectancy table, in this case 25.4, but only if that amount is larger than the amount from the Uniform table. Well the DIVISOR in the uniform table is 27.4. However, when using these divisors the RMD in the Uniform table is 106341 and the Joint Last Survivor is 114715. I am thinking the rule means the highest RMD amount not the highest DIVISOR. Also, wouldn't you use the Joint Last Survivor table unless the spousal beneficiary is more than 10 years younger than the participant? Thanks.

yeah, i tend to agree. The gentleman's f.a. was throwing it out there as a possible option. I might just have him contact the IRS directly.

a builder,who is the sole employee, wants to establish a 401(k) and add a DB or possibly a 412(i) plan, but has already put in the max into his SEP for 2007. What is to prevent him from requesting those funds back, paying the penalty and setting up the aforementioned plans? It would benefit him despite the penalty.

Sole employer has a SEP in place and has funded it for 2007, but is looking for other ways to shelter some additional money. His earnings in 06 were 1.4 mil and expected to be the same this year. I was told he can not fund the SEP if he establishes a DB, but I do not think that is accurate.

Gentlemen (I assume), I think you have straighened me out and thats wonderful news. I feel confident that they are in compliance. The allocation of the PS cont is defined as "each participant in the proportion that the participant's compensation for that Plan Year bears to the total comp for the plan year of all qualifying participants". I appreciate your points and your next rounds are on me

Section 6.2(e) in Corbel