david rigby

Try page 10 of IRS publication 590. http://www.irs.gov/pub/irs-pdf/p590.pdf

Huh? I don't see any double attribution. Are the families related to each other?

Entirely dependent on Canadian tax law.

... a bit more. Schedule B is open to public inspection except when attached to Form 5500-EZ. Schedule E is not open to public inspection. Schedule F is not open to public inspection.

Andy, I think you are on the right track. The occurrence of a distributable event is important. If the person has attained such an event but returned to employment, then you have some flexibility. For example, EE leaves at age 50 as a VT. Reaches age 55 and commences payments under early retirement provisions. Rehired at age 58. The plan could suspend payments, subject to the existence of such provisions in the plan. The plan is not required to have such provisions. The accompanying discussion by KJohnson and Kirk focuses on whether a plan can be amended to add such provisions when not already present.

What do you want to do? If the goal is to permit employees to manage their retirement, then the plan provisions and the personnel administration can, in tandem, help. Suppose the employee has a legitimate severance of employment amnd commencement of benefits under the early retirement definitions. At a later date, the employer rehires the employee (possibly parttime, but not necessarily), and the plan benefit does not change. Ideally, the plan should make it clear that no suspension will occur, the employee can contine to earn credited service, and that benefit at subsequent severance of employment will be redetermined at that time, likely with an adjustment for the value of any benefits received. In the real world, this very often means that the benefit does not change at the later retirement date. This might be a very good process, depending on the type of employer. Example, a hospital. Note, that the original severance of employment should not be on Friday, with a rehire date on Monday. Don't play games with the timing.

In what way does having employees join a union affect whether a plan is top heavy? Are those employees exiting the current plan?

Yes. To elaborate on Frank's alternatives: the method chosen is an accounting method. The plan sponsor chooses it the first time. To change it may require prior IRS approval.

Your title to this question confused me. Are you asking about retirement benefits in pay status? LTD coverage as an active employee/LOA? What type of plans are you referring to? Are they covered under a benefit program of a Canadian company? US company? US subsidiary of a Canadian Company? Canadian subsidiary of a US company? How are these employees paid? Are they Canadian citizens living in the US? Paid in US dollars? Do they work for a US corporation? It seems unlikely that Canadian law could modify the terms of any plan in the US.

I agree, it may not matter. Just curious about whether this owner is applying the same standards to all employees. Also curious whether the owner actually understands what plan he really has. One of the worst scenarios is a top-heavy 401(k) plan (unless there is another plan to absorb the minimum).

Are all employees being treated the same?

That is my understanding as well. Since there is no investment/expense risk being born by plan participants, this issue gets less attention, but I think the same rules would apply. Also of note is the "risk" born by the PBGC, so it should not be considered irrelevant.

It is my understanding that the insurance company cannot require the use of SSN as the ID number. Others may have more information on this subject. Identity theft (which by the way is really all about money) is a very serious problem. You might find some useful info here: http://www.idtheftcenter.org/

My hunch is that the employee will look to the plan sponsor to keep that data, assuming that the after-tax deductions were done properly in the first place. The prior recordkeeper may not be co-operative for a number of reeasons. For example, raising the question may have made them realize they made a mistake, or perhaps the prior TPA knew there was a problem earlier and did not follow-up. It is also possible that the employer did not report it properly to them. There may also be a TPA prior to that one. At any rate, the affected employees are going to be mad at somebody. Probably cannot assume the employees have records; not sure if a W-2 would help, but asking is better than ignoring the problem.

To be precise, the equation of balance mentioned here is really a subset of the correct equation: PVB = PVFNC + sum(outstanding balance of amortization bases) + (Assets - Credit Balance) See IRS Reg. 1.412©(3)-1(B)(1). http://www.access.gpo.gov/nara/cfr/cfrhtml...26cfrv5_00.html (Of course, this reg. pre-dates the existence of the Reconciliation Account.)

You are correct that the federal withholding would be zero for a lump sum distribution of $200 or less. (State tax laws vary.) However, the amount of the tax owed will depend on the individual's total income and tax circumstances in the year of distribution. I tend to agree with responses from MGB. However, whether or not the account should be distributed is governed by the terms of the plan. Most plans will require distributions of accounts less than $X (such as $5000). But this plan might have different provisions, and the plan should also define whether a certain time period must elapse before any disbursement is made.

No, the PBGC program is not open to a terminating DC plan. Seems to me that paying anything to an "individual bank account" is not the right idea. How about using an IRA? http://benefitslink.com/boards/index.php?showtopic=11246 http://benefitslink.com/boards/index.php?showtopic=3754

Recent article related to this issue: http://www.shrm.org/hrnews/articles/defaul...age=020702a.htm

Yes and no. The base for the plan amendment is the change in the unfunded accrued liability. If that is zero, so be it. But don't forget about the credit balance. If you have one, then you will have to establish a new base in this amount, which the IRS reg. calls a "loss", to be amoritzed over 5 years (for 412 purposes). To be precise, this base is established before you do the plan amendment, so the equation of balance is maintained.

BTW = By the Way

Sounds like a PT to me. BTW, 401(a)(26)?

Have you contacted that state revenue department to ask them for procedures?

Allowing a very high percentage deferral (say 50%) is a plan design that should be considered by any sponsor who has concern about passing the ADP test. The likely users of such high percentage are "second wage earners". If someone earning 20K wants to defer 10K, why not let them? It helps them and it helps the ADP test.

DOL Reg. that describes the SAR, including sample language: http://www.dol.gov/dol/allcfr/Title_29/Par...520.104b-10.htm

You should probably get your attorney to respond to this, but here is my non-lawyer understanding: The filing deadline is not 2/28/02. However, if you do file by that date, and the IRS finds some "deficiency" in your document, you will be permitted to correct it retroactively (no harm, no foul). If you submit it after 2/28/02, and there is a deficiency, the correction process may not be as "clean". (Sorry to be so vague, but that's what happens when you have to talk to lawyers all the time.) With regard to your specific question, my experience is that the postmark date is what counts.