WDIK

There are probably too many unknown factors to make an appropriate recommendation for this doctor, but I do have one observation. Electing to defer his salary under the Roth 401(k) provisions seems to defeat the stated purpose of "maneuver[ing] his income from this practice to help offset the taxable income from the annuity." This observation does not mean to say that the Roth approach wouldn't be beneficial.

You might want to take your shovel and head over to 1.414(q)-1T, Q&A-3(c )(2).

(None of my colleagues get my sense of humor either.)

You ain't seen nothin' yet! http://www.gavroche.org/vhugo/sentence.shtml http://www.plainenglish.co.uk/ouch.html

Both were Gilda Radner characters, but I think that AndyH is right in this case.

You might get some additional information from the following website: http://muslim-investor.com/

Distribute the remaining balance?

Internal Revenue Code Section 415©(2): (2) Annual addition For purposes of paragraph (1), the term "annual addition" means the sum for any year of-- (A) employer contributions, (B) the employee contributions, and (c ) forfeitures. For the purposes of this paragraph, employee contributions under subparagraph (B) are determined without regard to any rollover contributions (as defined in sections 402(c ), 403(a)(4), 403(b)(8), 408(d)(3), and 457(e)(16)) without regard to employee contributions to a simplified employee pension which are excludable from gross income under section 408(k)(6). Subparagraph (B) of paragraph (1) shall not apply to any contribution for medical benefits (within the meaning of section 419A(f)(2)) after separation from service which is treated as an annual addition. It does not appear that the holding account earnings to which you refer are included in the definition provided in the IRC.

That is the approach I would take. See ERISA 3(2)(A). (2)(A) Except as provided in subparagraph (B), the terms "employee pension benefit plan'' and "pension plan'' mean any plan, fund, or program which was heretofore or is hereafter established or maintained by an employer or by an employee organization, or by both, to the extent that by its express terms or as a result of surrounding circumstances such plan, fund, or program-- (i) provides retirement income to employees, or (ii) results in a deferral of income by employees for periods extending to the termination of covered employment or beyond, regardless of the method of calculating the contributions made to the plan, the method of calculating the benefits under the plan or the method of distributing benefits from the plan. (emphasis added)

Might the participant mean that they want to designate a trust as a beneficiary?

It is certainly the prudent approach.

http://benefitslink.com/boards/index.php?showtopic=30505 http://benefitslink.com/boards/index.php?showtopic=15327

If contributions are made to the SEP, they must also be made on behalf of eligible employees who are over age 70-1/2.

http://benefitslink.com/boards/index.php?showtopic=23411

If self corrected the late payment penalties are 1% of late premium per month up to a maximum of 100% of the premium payment. This rate if 5% if the PBGC sends notification prior to the filing. Interest charges will apply, and the PBGC may impose additional penalties for failure to provide premium-related information.

I would certainly hope that both plans have procedures, policies and plan language in place that need to be followed in such a situation. It does not seem reasonable to me that a plan administrator would want the affected participant to determine the allocable earnings.

Is it just me, or does it seem that employees are many times more likely to notice a shortage in their paycheck than an overage?

Some observations: 1) It appears that GoldenBear03 may have misunderstood the original post, as the followup post, while true, does not appear to address RCK's question. 2) IRC Section 404(k) and 1.404(k)-1T do not seem to provide a deminimus exception to the deductibility rules (but I must admit that I don't know for certain if the issue is addressed elsewhere). 3) It is my understanding that the timing required for distribution to the participants is "not later than 90 days after the close of the plan year in which paid," so perhaps annual rather than quarterly payments could be considered.

It appears that the approach you are proposing as a reasonable allocation method is consistent with the method that is used by the plan for allocating income to participant's accounts. You should also determine if the allocation method is being used consistentely across all participants and all corrective distributions. Does the metholdogy you are using for earnings on ADP returns take into account the deposit date of the deferrals? Or to put it another way, are you using the same formula in both the ADP and ACP scenario and coming up with zero earnings on the returned matching contributions?

From what code section or regulation are you paraphrasing?

Are you referring to a specific plan document, because I don't think that "Solo plan status" appears in the Internal Revenue Code or corresponding regulations?

I have heard the term "super comparability safe harbor 401(k)", and would suspect that is the type of plan to which reference is being made. However, there certainly are a lot a marketing terms out there. Is there a link that you can provide?

I must be missing something, too, because I see no reason that a plan's eligibility requirements cannot be amended. Furthermore, in this case the amendment will result in more liberal plan provisions, so no benefits or rights are being eliminated.

I'm sorry, what was that you said?

http://benefitslink.com/boards/index.php?showtopic=23411