E as in ERISA

At the end of Announcement 2005-70, the DOL says "The Department of Labor ... will not treat any person as having violated the provisions of [ERISA] solely because they complied with the provisions of this Announcement." KETRA amends 72(p). 2005-70 says plans should follow 72(p) rules on loans but procedures can temporarily be relaxed. The DOL has indicated that the comment at the end of 2005-70 would apply to the change in the 50 percent limit based on those references to 72(p).

Are the amendments retroactive or prospective?

I've heard an IRS employee jokingly say that they don't like to look at their paychecks. So their position is based on the fact that they don't want to force other employees to look at their paychecks and find errors either.

I think that the proposed regulations are generally intended to deter termination of plans. If you "terminate" you can't make distributions. So that technique can't be used to accelerate distributions. But if you terminate all plans of the same type then you can make distributions. So if this is the only plan, I would think that would work.

Just don't use the link for "Regulations" on the left bar -- or you'll end up with only regulations from 2000 and before when you click on "Final regulations".

Kirk: Why do you think that this is a significant change? They have been indicating that the second set was fairly complete from a drafting standpoint since at least July or earlier. They have just been waiting for approvals. Is it possibly the third set that you heard was to be released much later?

The IRS is supposed to issue two more sets of guidance. It could be that some stuff is moved to the December release.

Heard that a Treasury representative is reporting it will be out within two weeks.

The Joint Committee on Taxation's explanation agrees with mbozek: The provision amends section 408A©(3)©(i) to exclude minimum required distributions from IRAs (but not distributions from qualified plans) from the definition of AGI solely for purposes of determining eligibility to convert from a deductible or nondeductible IRA into a Roth IRA. Under present and prior law, the required minimum distribution is not eligible for conversion and is includible in gross income. http://frwebgate.access.gpo.gov/cgi-bin/ge...id=f:52240.wais

The regulation is silent on qualified plan RMDs. So maybe it's just a clarification regarding IRAs. The statute seems to clearly exclude RMDs under 401(a)(9). But technically speaking, Sections 408(a)(6) and 408(b)(3) merely indicate that IRAs are subject to rules SIMILAR to 401(a)(9). So maybe the regulation is simply a clarification that the RMDs from IRAs are also excluded.

Just remember that they will have two or three of everything else: 2-3 5500s, 2-3 plans to amend (which is becoming almost yearly); 2-3 SPDs and SMMs; 2-3 base annual costs from recordkeeper; more time spent figuring out what goes where.....

2005 IRS regulations http://www.access.gpo.gov/cgi-bin/cfrassem...gi?title=200526 2005 DOL regulations http://www.access.gpo.gov/nara/cfr/waisidx...v9_04.html#2509

For some reason, they won't update the links on this web site's Regulations page: http://benefitslink.com/regs.html They still connect you to the 2000 version of the CFR. Over the years I've asked them a couple of times to update that, but they still haven't done that.

I think that we are moving toward more "fixed fees" but also full disclosure of who gets what fees.

Discrimination prevents you from pre-funding only one account on a discriminatory basis, but it doesn't prevent you from pre-funding at all. So these arguments might not prove to the guy's lawyer that the contract provision cannot be fulfilled as written. They only prove that if they deposit the $X for his account, then they also have to deposit the rest of the $$$ at the same time for all the participants. And that's not really this guy's problem! But I might check to see if the contract is worded poorly: "Company agrees to make a contribution for 2005 for employee A in the amount of $X and it agrees to deposit that amount into the plan immediately" (without specifically referring to allocation to the guy's account). You could argue that provision could be satisfied with a $X contribution now -- but that only part would legally be allocated to his account now -- and the rest will be deposited and allocated later.

Is the check just for $X -- or does it cover the entire year's contributions for everyone? If they deposit only $X I think it needs to be allocated across all accounts per the terms and formula in the plan, doesn't it? So this guy only gets a portion of $X?

Roth 401(k)s are not effective until January 1 2006. And many won't implement until later than that. So if your question is purely administrative, you might not get any takers for a while.

Why do you think that the 415 definition of compensation would be different for after tax and Roth than it is for pretax? Doesn't the exception for 911 compensation work for you?

Don't want to open the file. Sounds like maybe the pics are downloaded from one of those DVD movie games like Scene It or Shout About Movies. I know one or both have that game.

I'm thinking that telemarketer probably added that name and number to the "Do Not Call" list after this...

I'd recommend discussing with the tax preparer for the 1041 and 1099s and W-2s for the trust. Do all of these "employees" get W-2s? Or are some 1099'd? I would assume that the farm income and workers would be reported on a Schedule F (and they are W-2'd) So I can see the trust sponsoring a plan for them. I don't know, but I'm guessing that the payments for nurses would not be reported on any business schedule like a Sch C or F. I'm assuming that they are actually treated as distribution to the trust bene for tax purposes? So again I think you'd want a separate arrangement there -- and since they are probably domestic workers then you'd probably want a SIMPLE? I don't know about the administrator and the mother. Are they W-2'd or 1099'd? Sounds like those would not be a business of the trust like a Sch C or F. Probably reported on the 1041 as administrative expenses of the trust? So don't know how that would look. At the end of the day, I don't think it's a matter of whether you can set up the plan. It's a matter of how you set it up to keep it all straight. And it's a matter of whether you have a nondeductible contribution to the plan subject to excise taxes. (Which is the reason you go with a SIMPLE for domestic workers like nurses).

This touches on the issues I'm talking about http://benefitslink.com/modperl/qa.cgi?db=...employer&id=214 I think that might suggest that they might want separate plans for business employees (farm workers) and a SIMPLE for domestic workers.

The farm employees would be a business. I'd look up the rules on household employees in regard to the nurses, etc. It used to be harder to provide retirement benefits for household employees. But I think that they eased up the rules a few years ago. Just haven't followed it closely myself.

Do a search for "incidental benefit" or "incidental death benefit." When you have life insurance in a retirement plan, you are providing another type of benefit and such other benefits can generally only be "incidental."

Why not just tell the participant that they have been flagged for inconsistent home addresses. Tell them that you want to send the checks to the correct residence and you need the paperwork to be consistent.