WDIK

George Costanza?

Isn't it only the contribution amount that is discretionary? The allocation formula is stated in the document is not discretionary. With regard to discriminating against HCE's wouldn't that still need to be written into the plan document? Sorry about the cross-testing thing. I had to reread your post three more times before I caught it.

This discussion was one of the shorter ones. However, your post does not indicate whether the plan is cross-tested or not. In my opinion, if there is no cross-testing, you would need to allocate equally (based on the formula) to all partners. If your document allows, there may be a possibility for those interested partners to make an irrevocable election not to participate in the plan. This raises some other issues as well.

See, this really is a good idea.

Works Diligently If Kicked (Actually, it's in the signature.)

Paranoid Schizophrenic OR Pension Subtilties OR Post Script (Take your pick)

Most are familiar with email acronyms such as LOL, IMO, BTW, FYI, etc. I got to thinking that BenefitsLink posters could save a lot of typing (and possible carpal tunnel syndrome) if some BenefitsLink acronyms were adopted. For example: CPP - This topic has already been discussed ad nauseum. Use the forums search capabilities and check prior posts. PD - What does the plan document say? OR You must follow the plan document? OR Have you read/referred to the plan document? OR It depends on the plan document? etc. LC - You should obtain competent legal counsel on this matter. OR Sorry, you're going to have to pay for this advice. OR You may already be in a lot of trouble! These seem to be the three most popular responses. Any other suggestions? (P.S. Please do not take this post too seriously. It is all in good fun.)

Point well taken. I should have considered that the match might be very minimal, since the employer apparently is only interested in increasing benefits for HCE.

I do believe that your scenario qualifies as a "Document Failure" as described in Section 5.01 of Revenue Procedure 2003-44. Pay the appropriate fee and forgiveness is available.

I know that this isn't answering your original question, but I am curious as to why they are opposed to a safe harbor plan. If the plan already provides a match and participation is still poor, what additional exposure does the employer expect? It sounds like a perfect situation for a plan with a safe harbor match.

Does it make a difference if the participant turns 70-1/2 after the rollover date? In this case, what if the participant turns 70-1/2 after March 2004?

What is their current plan design?

The current thread is with regard to loans available for hardship reasons. The other thread discusses hardship distributions.

For starters, there are disclosures on Form 5500. There may also be issues with unrelated business taxable income which are reported on Form 990-T. You might want to look at previous threads that discuss the pros and cons of investing retirement plan assets in real estate.

dh003i: I don't mean to be difficult, but could you clarify what you mean by: 1) a company that usually makes 80% a year: A) 80% investment return? B) What is usually, 2 out of 3? C) What company is this? Can you provide a link to corroborate? 2) they work with such an excellent percentage (say 90%) A) They make money 90% of the time? B) What type of return? C) Again, would you be kind enough to document your assertions? 3) I also disagree that one investment style won't work all the time. A) Even in the two extraordinary examples you gave you qualify them with "usually" and "90%" B) Why then do you recommend other styles of investment?

Poker.

I wouldn't be worried about reporting a different trust ID number on the Schedule P. As you noted, there seems to be no coordianation between the different agencies, and I don't think that any confusion with the 5500 will result. I think that the issue here is to make sure that the tax withholdings are reconciled with whatever trust number they were deposited under. If it can't be done by a 945 filing, you will probably have to write a letter explaining the situation so that the taxes can be properly credited. Are there really over 1 billion numbers already assigned so that they need to start reusing old numbers?

The $10,282.50 in your calculation file does not limit compensation to $200,000. Also, can you integrate at the TWB using 5.00%?

Qualified first-time homebuyers may withdraw penalty-free (from the 10% excise tax) from IRAs, up to a $10,000 lifetime limit. This exception is not available for hardship distributions from qualified retirement plans. I am not familiar with any timing requirements that may apply to rollovers and subsequent IRA withdrawals. The participant should get qualified and compentent advice with respect to whether or not they qualify for this exception.

If the participant is eligible for a cashout, what is the advantage of taking a hardship instead?

This seems like a reasonable and logical assumption. I'll take a stab. I would provide the section of the plan document that authorizes the sponsor to appoint a trustee. I would also provide a signed copy of the document where the new trustee accepts appointment. One other thought. A sole-proprietorship is the perfect example of why it is beneficial to name more than one trustee.

Although I have no personal experience, I have heard that when you are always right it is annoying to have people question your judgment.

Try here.

Please clarify. When you refer to the "EIN for the plan" do you mean an identification number for the trust that you show on Schedule P? The reason that I am confused is "the fact that the annual 5500's have always (and will) use this EIN" sounds like you are referring to the identification number of the plan sponsor which would be used for the Form 5500 filing.

Would rephrasing the scenario as follows alleviate your concerns? Employees of Company A participate in a multiple employer 125 plan. What would prohibit the employees to have uninterrupted participation in the plan under the following scenarios? 1) Employees transfer from Company A to Company B. Company B has the same ownership as Company A and also participates in the multiple employer plan. 2) Employees transfer from Company A to Company C. Company C has a different ownership than Company A and also participates in the multiple employer plan. Company C purchases the clientele of Company A and employs the same staff. 3) Employees leave Company A and are rehired to Company D. Company D is an unrelated entity with respect to Company A, but also participates in the multiple employer plan.