stephen

Not yet...

If you still have stock in your account it should be purchased from you at the current fair market value price. If your stock balance was exchanged for cash in the plan and you only have cash you should only get the vested portion of the cash in your account thus you would not get the 2X value for the stock. Forgive us for our cynicsm, in your initial post it seemed like you were a third party administrator looking for advice not a participant.

I would expect it to be very soon since the Form 5500 and instructions for 2006 were released earlier than in years past.

1. Seek ERISA Attorney advice on this entire (1-4) process unless it is spelled out in the document. My what a tangled web we weave when trying to exclude participants from benefitting in the gain of the ESOP when the company is sold and the shares significantly increase in value. I have seen plans handle this by 100% vesting everyone who still have a balance and by only vesting the participants who were still active at the time of the buyout. 2. When an employee is "cashed out" of the ESOP they are entiled to the current fair market value price. 3. I think not. I would not want to be involved if one of these participants called the DOL and said, "My employer just cheated me out of $XX,XXX.XX. Please help me." An employee with a balance under $5,000 could have been mandatorily cashed out if given the proper notice etc. But it seems too late for that now. The fiduciary is supposed to look out for everyone's best interest. A terminated employee who has an account balance is still a participant. 4. In my opinion, the employee would have to receive a check not simply an accounting entry.

What I meant by in this example is the calendar year plan you referred to in your origninal post and the employee hired 12/20/2006 is that you could set up the plan for age 21, 12 months of service with 1,000 hours and the employee noted would be excluded from participating until they met the requirements and reached an entry date. The earliest this employee could enter the plan would be 1/1/08 as noted above. However, you could set up the plan to allow for 6 months of service to be eligble with dual entry (1/1 and 7/1) and the employee noted above would enetr the plan 7/1/07. Also, note if you have the 1,000 requirement and the employee hired 12/20/06 never meets the hours requirment they will not become eligible to enter the plan.

In this example, dual eligbility would impact eligbility if the plan required 6 months of employment and had entry dates 1/1 and 7/1.

See this thread

I hope your plan is a safe harbor plan and the notice was posted timely... because otherwise you'll fail ADP.

The thread named above may be #1 of all time not just 2006.

#18 Plot Outline: A boy who communicates with spirits that don't know they're dead seeks the help of a disheartened child psychologist. #40 Plot Outline: Set in 1954, a group of Florida high schoolers seek out to lose their virginity which leads them to seek revenge on a sleazy nightclub owner and his redneck sheriff brother for harassing them.

Wolves1962, I believe you are referring to the PPA rules which are effective for plan years beginning after 12/31/07.

Yes-

I think that once a former key you stay a former Key unless you become Key again...

What about participants who were deferring 5% so they received the full match? I think they should be given ample notice so they could reduce their deferral amount if they choose to do so as they will get the 3% NEC regardless.

I think the notice should be provided at least 30 days prior to the beginning of the plan year and the notice should reflect the 3% non-elective. The amendment would bneed to be signed by 12/31/2006 to be effective 1/1/07.

What happens if the participant does not cash the hardship distribution check?

Based on the information given I agree with your thoughts on the matter.

Yes. The 70 1/2 year old father of the owner would be required to take an RMD due to attribution of ownership.

It seems to me that you answer your questions with this section of the plan document. As forfeitures occur when the entire vested balance has been paid out you will now wait until the five years have passed to forfeit as this conincides with the vested balance being paid out.

Me too.

It seems to me that the employer is just trying to gather inofrmation about the employer stock in the plan so they can do an informal repurchase obligation study. I agree with you that this information should be provided to the employer. After all doesn't the employer have access to this information via a website or through the annual/quarterly reports anyway?

I agree with these comments. I would send the filing registered mail return receipt requested or using an overnight mail service so you have proof that it was filed timely. Odds are the audit will be complete withing the time frame required for the response and an amended return can be filed. In my opinion the per day late fees are barbarian especially in this scenario where the employer is doing their best to follow the law.

If you file and amend will the amended filing be ready before you get the letter from the IRS requesting the audiotr's opinion?

Pax, The Braves are trying to talk the Yankees into paying $4,000,000 per year of A-Rod's salary so they can get him for the bargan basement salary of $12,000,000 per year (as the Rangers are still paying $9,000,000 of his salary). Stephen PS Another streak for the Braves begins next year!

#16 is The Last Castle