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A participant takes out a loan at age 53 with a 5 year repayment option. The participant terminates employment at age 56. How should the loan be handled if the participant takes a lump sum distribution? Since the participant separated from service after age 55, would she qualify for the 10% penalty exemption?

Can a new employer established in 2002 allow the owners to participate in a SEP while keeping out all other employees that have not met the 3 year eligiblity?

Employer wants to exclude a class of HCEs from the ESOP plan or any DC plan for that matter (this class of HCEs has suggested this) from receiving employer contributions for one year. These HCEs are already eligible participants. It is my understanding you can amend the plan for an employment classification exclusion as long as you can pass the coverage requirements under 410(b). Since your discriminating against HCEs, there will be no problem passing the coverage testing. Any issues with this?

Just trying to get feedback on how everyone values Israel Bonds when they are in a qualified plan. At face value? And if not, how is the value determined each year?

An employer has a prototype plan document. In order to receive a matching contribution, a participant must be employed on the last day of the plan year. The plan does not pass the 410(B) test for the plan year. The plan document does not address what to do if the plan does not pass the ratio percentage test. Usually, one can bring in terminated participants until you pass the test or run the average benefits test. Is there a problem with doing this if the plan document doesn't have any provisions regarding this?

There has been discussion on PIX and one of our employees attended Larry Deutsch's seminar last month regarding what to do if the xtesting does not pass. Can someone please clarify if we have a xtested document with Group One as owners and Group Two as staff, can we use straight integration if one of the employees receiving an integrated benefit is a NHCE and in the staff group. Do we still need to pass the general test? Thanks.

Employer was on a volume submitter money purchase plan document prior to 7/1/01. Employer then adopted a pre-GUST prototype non-standardized money purchase plan document on 7/1/01 effective for the plan year beginning 1/1/01. Since the remedial amendment period for GUST was extended until September 2003, wouldn't the employer have until then to amend their document for GUST?

A Form 5330 should be completed for late salary deferrals. Since the deferrals need to be listed on the Schedule I, what should be done if 5 deposits were late a few days. Total interest due would be approx 10.00. Penalty is 10% or $1.00. Since the Schedule I was already flagged that deposits were late, wouldn't the IRS be looking for form 5330 even though the penalty is basically DeMinimis?

Are there updated plan documents available for non qualified deferred compensation plans?

We don't know why he did this. He didn't think it was a problem until we told them.

Employer allows HCE to defer from his year end bonus but does not allow staff employees to defer from their year end bonuses. Obviously, this is discriminatory but what corrections can be made, if any.

A client of ours would like to adopt the EGTRRA amendment but limit compensation for allocations to $170,000. Could they adopt EGTRRA and then do an amendment to limit the compensation to $170,000? Also, for deduction purposes, could an amendment be adopted to limit compensation to $170,000?

A CPA has a Dr. client, Dr. P who has his own retirement plan. The Dr. is a 14% owner of a Medical Practice which does not have a plan. The staff employees are leased through a PEO and have a 401(k) plan through the leasing company. The CPA is not sure of the rest of the ownership of the Medical Practice but Dr. P has a monthly draw from the Practice to his corporation from which pays himself and his expenses (auto, etc.). Dr. P sees all his patients through the Medical Practice. His current TPA tells him that there is no problem with this arrangement. We do not agree. Am I missing something here? Thanks...

We have a client who has deposited the profit sharing contributions after the filing deadline of the corporate return (including extensions) for the past 3 years. CPA is reluctant to file amended corporate returns. It does not seem clear if a 5330 is necessary for the late deposits since the deposits are not required. If a 5330 is required, what type of tax/penalty would this be classified as? Do we amend the last 3 valuations to show the actual deposits made and let the CPA worry about his audit liability? Any help is appreciated.

Has anyone heard of Entrust Administration? Would you recommend them?

Plan allows for self direction of accounts. Management fees are currently taken out of each individual's account during the year. One partner wishes to reimburse his account for any fees taken out during the plan year. Can this be done if none of the other participants that are self directing do not reimburse their accounts for any fees taken out during the year?

Prior 5500 had pension code of 2C under question 8a but no schedule R was prepared. Are there any exceptions for not filing a schedule R for a collectively bargained plan? Is a collectively bargained plan subject to the same minimum funding requirements as a regular money purchase plan?

Employer sponsors an ESOP. Client wants to know if the ESOP can loan money to an unrelated 3rd party.

Plan sponsor has filed for bankruptcy and has no money to fund the money purchase plan contribution for 9/30/01 PYE. Too late to file for minimum funding waiver. Corporate tax return has not been filed yet. Would the trustee (owner) ultimately be responsible for the contribution? Any options available to plan sponsor?

One of the owners of an S-Corp is thinking about donating some of his stock to a public charity. Public charity would then sell the stock back to the ESOP that is sponsored by the S-Corp. Can this be done?

Are there different filing requirements for a publicly traded company versus a non-publicly traded company?

An ESOP sponsor has one owner/employee who is key to the company operations. It is believed that in the event of his death, the value of the company will greatly decline. The ESOP participants have considerable value in the plan in excess of the cash within the ESOP and the liquidity in the company necessary to redeem all outstanding ESOP shares. The company is growing concerned about the dangerous situation should the key employee die. Does anyone have any ideas or recommendations on how to hedge this risk? We have considered the purchase of term or whole-life insurance, but understand that this raises different issues. Has anyone delt with this situation before? Your advice/comments would be appreciated.

Company B is owned 50% by JB and 50% by Company A. JB does not own any portion of company A. Company B is starting up a 401(k) plan and wants to move same participant balances from Company A's plan to Company B's plan. Participants will no longer participate in company A's plan. Supposedly company B was spun off of company A even though company A still owns 50%. Can company A's plan move assets to Company B's plan with or without paperwork from participants?

Can subchapter S owners count pass through income for plan compensation?

Aggregate plan testing was not done originally to determine the top heavy status of the plan. Plan was top heavy for 1998 and therefore employer owed additional contributions to the plan to satisfy the top heavy minimum contribution requirements. The employer is located in Georgia.