WDIK

I think the question arises because the plan is being filed on an accrual basis, but the instructions for Schedule I Line 2f indicate that you "include all distributions paid during the plan year of excess deferrals...excess contributions". You could argue that you could accrue those distributions as well, however the instructions for Schedule I Line 2e (Benefits Paid) specifically refers to including payments due for accrual base filers. Do the instructions mean that you should not report excess deferrals/contribtuions on an accrual basis?

Why not file 2 Schedule P's?

I reviewed several similar topics from the message boards that discuss top-heavy issues, but I have a slightly different twist. The Employer sponsors a defined benefit pension plan. Accruals have been frozen. The Employer also sponsors a safe-harbor 401(k) plan. If the top-heavy minimums are provided through the 401(k) plan, which is the correct amount? A) 5% B) 3% C) No top-heavy minimums are required. So far, my research has me leaning toward "C", but I could also make arguments for "B".

I agree. Maximum loan minus largest outstanding loan during preceeding year. $50,000 - $45,300 = $4,700.

In my experience, marking the box for a final return while end of year assets exceed $0 results in a letter asking for clarification. I believe that the situation you describe would require a letter of explanation.

I would assume that you will eventually get a notice pertaining to the discrepancy (final return versus nonzero assets at PYE) which asks for clarification. You should be able to correct the error at that time.

List separated participants entitled to future benefits on line 7c.

A similar discussion is going on in the thread entitled "401(k) top heavy exception"

Just a bit off topic, but I've always wondered what is the purpose of an "automatic" extension (when no tax is due), other than creating additional paperwork.

I have seen several "401(k)" prototype adoption agreements where a box much be marked to elect the salary deferral provisions. I think that this is what g8r is referring to.

Mbozek, Thanks for the catch. That will teach me to trust citations from reference material.

If neither spouse is an employee or participates in the management of the other spouse's business, I think that the attribution rules to not apply per IRC Section 1563(e)(5).

Is the benefit over $5,000?

So under section 202, Form 5500-EZ is no longer the "Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan"? I'm not sure if this is useful, but exempting one-participant plans with under $250,000 in assets from filing may make some happy.

Are the wages reported on the 2002 or 2003 W-2's? I think that the answer is the same for both questions.

For what it's worth, I agree with your conclusion relating to the Schedule I. You may also need to report some participants on Schedule SSA using code C.

I have seen a prototype document that allows the adopter to choose which unpaid terminated vested employees will also be fully vested as of the plan termination date. The options are: 1) Discretionary (no plan reference) 2) Only those with less than a 5 year break 3) Only those with less than a 1 year break 4) Only if terminated in plan year of termination 5) All unpaid terminated vesteds

Pardon my ignorance, but if any changes in the "word-for-word" language are made, doesn't this essentially mean that the plan is treated as an individually designed plan? If so, doesn't that mean that the GUST extension period (to 9/30/03) does not apply?