stephen

I do not think the document would allow for this. Nor can I think of how this could work. What does the document say regarding hardship distribution sources?

Thus, if Tom's calculations are correct should the Yankees not win the World Series next year they will have spent more than ONE BILLION DOLLARS ($1,000,000,000) in this century and not have a single ring to show for it. I'll also guess that the Yankee fans (if there are any on these boards) are gloating about the 26 World Championships they won in between the years mentioned by Tom and 403. (Corrected "403b" to 403 as pointed out by Mr. Preston)

Tom can be found Monday November 7th at 11:00 am- Workshop 18: Safe Harbor 401(k) with New Comparability The new 401(k) regulations clarified a number of issues pertaining to safe harbor plans. The first portion of the presentation will review the safe harbor requirements. The remainder of the talk, while briefly looking at how safe harbor contributions effect non-discrimination testing, will look at some of the issues pertaining to cross-testing. You will learn how to calculate an E-Bar and as a result hopefully you will determine by eyeballing census data whether you have a good candidate for a cross-tested plan. Other features like grouping accrual rates and whether to test using SSRA will be discussed. Believe it or not, it is possible to get all this in plus a fractured pension song! Thomas E. Poje, CPC, QPA, QKA, Dorsa Consulting, Ponte Vedra Beach, FL or presumably at the Dorsa Consulting Booth...

yes

yes, for 404 and 415; disaggregate for 410(b)

She will get 1 year of vesting credit for the first calendar year 7/1 - 12/31 and another year for the second year if she has at least 1,000 hours in the following calendar year.

Please provide an example-

What about the interest on the loan? You are paying the interest with after tax money and when you take it out you are taxed again on this portion. I believe there are several threads on this topic...

By the way if this filing is for a calendar year plan on extension the filing was due on Monday October 17th...

But clearly he cannot withdraw more than his account balance...

beccafaith, I do not think we have gotten totally off track of what was originally asked. I do think it will be a shame if the participant receives a $100 distribution and has to pay taxes on $10,000 if it is not neccessary. I woul dnot want to be one trying to explain to them that they owe approximately $2,800 in taxes (assuming a 28% tax bracket) on their $100 distribution. Best of luck to you in dealing with this situation.

I do not have a citattion for what John Neslon describes but I do know that many ESOP practicioners belive that the ESOP needs to be designed to satisfy the "primarily invested in stock" over the life of the plan not necessarily on an annual basis. This is a gray area and there have been no final regulations on the matter. I also know that some ESOPs start by accumulating cash to fund the initial stock purachase and that as long as there is a plan in place for there to be a big purchase (e.g. 30% to satisfy 1042) that the plan may continue accumulating cash for several years in this manner. Perhaps Tom's plan is saving for such a purchase? See this thread Perhaps Becky, Kirk, or RLL will chime in with more...

But if you have deemed the distribution and given them a 1099 on it why would you then make them pay taxes again on this amount when they finally take a distribution? Wouldn't you offset their distribution by the deemed amount of the loan? Do you know that this loan was never reported on a 1099 before? I know that submitting a 1099 does not mean that the loan has not been paid nor does the loan have to be repaid but to tax them twice on the loan portion of the distribution just seems wrong.

If the plan is never going to default the loan why should the participant take a distribution from the plan? ( Perhaps because the plan has a doucment or loan provisions that say it must be defaulted after x months of no payments. ) It seems to me the recordkeeper from 1995-2000 did the participant wrong by not defaulting the loan at that time and now the participant is having to pay (literally) for past errors. By the sounds of it I may be in the minority on this one...

Perhaps we should get all of the facts before responding. I find it hard to believe that a participant could have a $10,000 balance $9,900 of which is an outstanding loan balance and only $100 is cash in the plan without having some previous distribution(s) or loan default. If in fact the loan balance has already defaulted and the balance is $100 cash and $9,900 in loan balance it seems that they will get a distribution of $100 and be taxed on just this amount as the loan has already been defaulted and thus the participant has already been taxed on the loan portion of their balance.

Thus, it would be ok to allocate additional amounts to the NHCEs by either by a flat dollar amount or comp. to comp..

If the $150,000 contribution was used to buy shares you could allocate the cash comp. to comp. and then use the contribution cash to purchase the shares OR use the cash to buy the shares and then allocate the shares. It is probably easier administratively to do the latter.

It seems to me if the contributions are allocated comp. to comp. and the employer is making $150,000 in stock contribution to the plan that the stock would be allocated comp. to comp.

Pehaps PAX can help with this one.

Thre is joy in mudville since the Evil Empire (NYY) are out of the playoffs. Perhaps we'll get the Astro's (never been there much less won a ring) vs. White Sox (have not won since 1907) in the World Series.

We use it (even though it is redundant).

yes

Jevd, I thought you were talking about the movie quiz not the number of kids you have.

If it is all one plan and available to all employees on an equal basis it seems ok. Things to think about: How will the repurchase obligation be handled in the ESOP if all of the cash is transferred to the 401(k) portion? Will you allow 401(k) portion to be transferred back to the ESOP.

Yes.