WDIK

I do not believe this is permissible. On the other hand, the plan's vesting schedule is a factor in this situation.

http://benefitslink.com/boards/index.php?showtopic=31417

I do not think that it is a requirement that a trust have a separate identification number, although I think that most members of this forum would recommend it.

Perhaps you are confusing the "401(k)" catch-up limit with the "Simple" catch-up limit.

If the document truly is silent, I guess that you would have to rely on the break in service rules found in the Code and Regulations. You might start in 410(a)(5).

Was the SUV itself suggested by the doctor as a medical necessity or only the running board?

It is likely that the plan document has language similar to the following: "The Sponsoring Employer may remove a Trustee by giving such Trustee 30 days written notice in advance." A board resolution and a letter of notification seems likes a reasonable course of action to me. (Please note that there is a distinction between a sponsoring employer and a plan administrator.)

My experience with lack of accountant's audit and the DOL - http://benefitslink.com/boards/index.php?showtopic=20201

Thanks for the information.

Although not strictly on point, the following thread does discuss some of the ramifications of an unauthorized distribution. http://benefitslink.com/boards/index.php?showtopic=28915

What form is California's state equivalent to the federal form 945?

If it were me, I would not be offended. I already know that I need to Quit Eating Doughnuts.

I do not believe that you can establish a "new" 401(k) plan with safe harbor provisions if it will be treated as a successor plan to a prior 401(k) plan. If it would cover 50% or more of the employees who were participants in the prior plan, it will be considered a successor plan.

My comment about the adjustment was not meant to refute your argument. Essentially, I would be more interested in the average tax rate rather than the income tax share, and you would probably argue that the average tax rate also supports your assertion. I appreciate your explanation about insignificant adjustments and can understand your logic. Although I have no empirical evidence with respect to your premise, one major reason why I would disagree with your statement, is that at least a portion of the non-taxed 50% (poorer group) would not support a tax-increase on the other 50% (richer group) because they hope to realize the American dream and become a part of the other 50% (richer group). Others might be opposed to tax increase on principal only. Finally with respect to Roth taxation only, it would require that only the "other 50%" have Roth accounts.

I may have been the source of your confusion based on comments in a previous thread. http://benefitslink.com/boards/index.php?showtopic=23275

It seems inconsistent to discount the need for an adjustment because it is only "sample data" and yet still use said "sample data" to try to strengthen your previous statement.

The most recent information I have seen can be found at the link that follows. http://www.relius.net/News/technicalupdate...?ID=352&T=P

If it were me, I would make an adjustment based on the share of adjusted gross income for each category.

Additional information may be found at the link below. http://www.michigan.gov/taxes/0,1607,7-238...56348--,00.html

Are you currently a resident of Michigan?

A 50% excise tax applies on the shortfall. However, the tax may be waived if it was due to a reasonable error and reasonable steps are taken to remedy the shortfall. You might also want to review the calculations made in determining the RMD.

According to Treasury Reg. 1.415-b(b)(6), if the excess annual additions are "a result of the allocation of forfeitures, a reasonable error in estimating a participant's annual compensation, a reasonable error in determining the amount of elective deferrals (within the meaning of section 402(g)(3)) that may be made with respect to any individual under the limits of section 415, or under other limited facts and circumstances" then "the plan may provide for the distribution of elective deferrals (within the meaning of section 402(g)(3)) or the return of employee contributions (whether voluntary or mandatory), and for the distribution of gains attributable to those elective deferrals and employee contributions". (emphasis added) Please note that the plan must contain a provision that permits such a correction and the violation must have ocurred due to one of the reasons described in the regulation.

Was there income allocable to the participant's account?

With respect to part 1 of your post: It appears that the pertinent wording in Rev. Proc. 2002-42 in determining whether or not a partial termination has occurred in this situation is "the employees vest in the continuing profit-sharing plan under the same vesting schedule that existed[.]" It further appears that the word of emphasis in this phrase is continuing. On the other hand, this Rev. Proc. specifically applies to the merger or conversion of a money purchase plan.

With respect to part 2 of your post: First, I didn't think the reasonable classifications test came into play if you passed coverage using the ratio percentage test. Second, Treasury Regulation 1.410(b)-4(b) states the following - (b) REASONABLE CLASSIFICATION ESTABLISHED BY THE EMPLOYER. A classification is established by the employer in accordance with this paragraph (b) if and only if, based on all the facts and circumstances, the classification is reasonable and is established under objective business criteria that identify the category of employees who benefit under the plan. Reasonable classifications generally include specified job categories, nature of compensation (i.e., salaried or hourly), geographic location, and similar bona fide business criteria. An enumeration of employees by name or other specific criteria having substantially the same effect as an enumeration by name is not considered a reasonable classification. This regulation does not necessarily mean that all job category classifications would be reasonable. It is a facts and circumstances test.