Francis

To clarify even further, let's say we have 20 HCEs who make $100,000 each and all 10 defer $15,500 into the 401(k). And let's say we have 2 HCEs making $225,000 each and these two $225k HCEs also defer $15,500 into the 401(k). Then there are another 30 non-HCEs. To correct a failed ADP test, would all of the HCEs have to receive back an equal dollar amount? Is the percentage of income deferred into the 401(k) not important? It seems unfair to hit the $225k HCEs less hard from a refund percentage viewpoint than the $100k HCEs. Equal dollar refunds would hurt the $100k HCEs more than the $225k HCEs as a percentage. Is this how it's done?

May an employee who is in the USA on a G-4 visa participate in an employer's ERISA 403(b) plan without jeopardizing his G-4 visa status or his spouse's G-4 visa status? The employee's spouse is an employee of an international organization and both are in the USA on G-4 visas?

If a 401k plan fails the ADP test, how in general is it corrected? Let's suppose there are 20 HCEs with various salaries and deferral percentages. Do the highest paid HCEs take the largest refunds or do those with the largest percentage contributions take the largest refunds? Or is it on a percentage basis or dollar amount across the board? Or something else?

It has been suggested that I set up a separate IRA account for nondeductible IRA contrituions (Traditional IRA) to not mix deductible and nondeductible money. Is this a good idea or it is really not necessary because the 8606 takes care of the tracking? Any good reasons to set up a 2nd IRA for only nondeductible money? Thank you.

We have an employee who worked for one employer from Jan 1, 2007 until May 31, 2007 and during that time he deferred $7,100 into a 403(b) plan and the plan had a limit of $15,500 for the year. He stopped working for this employer 5/31/07. July 5, 2007 he started with a new employer and he is eligible to participate in the new employer's SIMPLE IRA with a $10,500 limit for 2007. Since he already deferred $7,100 into the 403(b), what is his limit for the SIMPLE IRA for the remainder of 2007? Thank you for any help you can provide.

An IRA owner died at age 73 and he had been taking required distributions. Just after his death, his spouse beneficiary asked the custodian for a check for the remaining value of his IRA which was about $45,000. She was hoping to "rollover" the check into an IRA in her name within 60 days. She is age 72. But now her new IRA custodian has told her that she cannot deposit the $45,000 as a tax-free "rollover" because she took a full distribution from her deceased husband's IRA and instead she should have left it there and then had the two custodians handle a "trustee to trustee transfer" of the $45,000 to avoid taxes. Does the above sound correct? Is there a way for her to "rollover" the funds within 60 days to avoid having to declare the full amount as taxable income? Thank you for any help you can provide! Frank1971