Alex Daisy

Blinky: The current Plan Sponsor is becoming an adopting Employer, and there will be a new Plan Sponsor. Do you still stick with your response? Alex

What about the issue of the Employer Identification Number used to file the 5500. The new Plan Sponsor will have a different EIN. What EIN should we use after we do the amendment and change the Plan Sponsor?

A company would like to change the Plan Sponsor of a 401(k) Plan, and the former Plan Sponsor will also become one of the Adopoting Employers of the Amended and Restated Plan. Is is possible to change the Plan Sponsor without terminating the exsisting Plan? Would we have to merge the old plan into a new Plan? Any help would be greatly appreciated. ALEX

A client wants to offer a 401(k) Safe Harbor (3% Non Elective) with a 7% Profit Sharing Contribution. Is any non discrimination testing required on the 7% Profit Sharing Contribution? I would not think so because the company is giving it to everyone in the Plan (HCE's and NHCE's). Any input will be appreciated. ALEX

This a Plan that we just acquired and the termination amendment was never done. I am trying to clean up the mess. Any suggestions on how I should proceed with the Plan Termination for a plan that was terminated 6 months ago?

What does the amendment terminating the MP plan say with respect to compensation? Typically we word them to exclude compensation paid after the date of termination to avoid any grey areas on when compensation was "earned" vs when it was "paid". The amendment has not been completed yet, but the Plan Sponsor wants to include the Bonus in the Calculation.

A Money Purchase Plan was terminated effective 5/17/2008. The Plan calls for a 10 % of compensation contribution. The company paid a large bonus on 5/20/08. I am now doing the Money Purchase Contribution Calculation. My question is do I use compensation up until 5/17/2008 and add in the bonus paid on 5/20/08 to calculate the Money Purchase Contribution? Any help is greatly appreciated. Thank you, Alex

Assuming I send out the "Maybe" notice now, I cannot wait till the beginning of 2010 and see if my 2009 ADP test fails, and then send out the Notice saying that the SHNEC will be made? If the SHNEC is to be made, a follow up Notice must be given at the end of 2009? Whats the advantage of doing a Maybe Notice then?

A Plan has a Safe Harbor option in it. The client is worried about falling non discrimination testing but is not completely sold on the Safe Harbor route. Can someone explain to me the Safe Harbor "Maybe" Notice and what is required? I understand that it cannot be the Safe Harbor Match and can only be the Safe Harbor Non - Elective. What is the timing involved and does a follow up notice have to be given if the Safe harbor Contribution is made? Thank you in advance. ALEX

Just to clarify, they can let the Union employees in to make Elective Deferrals, but not allow them to get the match, and no special testing is required to pass coverage?

A company wants to allow Union Employees to join the plan and make 401(k) contributions. but does not want them to be eligibile for the Employer Match. I know this is allowed, but what rules and testing have to be passed in order to allow this? Any guidance is greatly appreciated. ALEX

We took over a Plan in 2007, but the 2006 5500 is showing Oxford Health Insurance on the 2006 Schedule A. Oxford Health Insurance is not an investment option in the Plan, and has nothing to do with the 401(k) Plan. I don’t believe it should be reported on the 401(k) 5500? Do you agree? Should it be reported by the company on a separate 5500?

Is a Plan Termination an event that would automaticially cause a participant to be in Default of his Loan? of just an trigerring event that will cause the loan to automaticailly become due and payable?

Laura: I understand and follow your logic 100% up until the part when you say "So, when the change occurs, he has to stay at 40% vested until his vesting percentage would increase under the new 6-yr schedule (which would be when he has 4 vesting years of service)." I do not follow the part about staying at 40% vested until his vesting % would increase under the new 6yr schedule.

So, anyone with 3 years or less of service needs to follow the new longer vesting vesting schedule?

A 401(k) Plan was amended and restated on 1/1/2007. The previous vesting schedule was 5 year graded, and the new vesting scheule is a 6 year graded. Am I correct to say that any employee hired before 1/1/07 must use the 5 year graded vesting schedule and any employee hired after 1/1/07 must use the 6 year graded vesting schedule? Does this have something to do with the anti cutback rules? Any thought would be greatly appreciated. ALEX

A participant in a 401(k) Plan died with a $4,000 outstanding loan balance. His account is worth $100,000 and his spouse is the beneficiary on his account. What are the options of paying back this loan? What if his beneficiary does not want to pay back the loan? Any help would be greatly appreciated. ALEX

Can a participant do a Rollover from an IRA into a Qualified Plan?

Is it correct to say that Column (d) cost information for the Schedule of Assets (Held At End of Year) and the column © cost of acquisitions information for the Schedule of Assets (Acquired and Disposed of Within Year) may be omitted when reporting investments of an individual account plan that a participant or beneficiary directed with respect to assets allocated to his or her account (including a negative election authorized under the terms of the plan). What is an "Individual Account Plan" ? Does a 401(k) Plan for one Corportaion qualify as a Individual Account Plan? Any help is greatly appreciated. ALEX

We are a TPA firm working on a large Plan were an Audit is required. We do not have a SAS 70. The auditor is telling me what since we do not have a SAS 70, they will have to do a full scope audit, as opposed to a limited scope audit. The custodian and recordkeeper of the Plan has a SAS 70. The TPA does not. Is a full scope audit required if the TPA does not have a SAS 70?

We took over a plan last year, and I am reviewing their 2006 5500 in preparation to complete the 2007 5500. I noticed that they included a Schedule A for Oxford Health Insurance, Inc. on the 2006 5500. My question is should a separate 5500 have been done for the Welfare Benefit Plan, or can it be included on the 401(k) 5500?

A participant took out a loan in 2007, and subsequently was terminatated and defaulted on his loan. He did not request a distribution from the Plan yet. How do I reflect this on the 2007 5500? Is the current outstanding loan balance counted in the Plan Assets?

A participant took out a loan in 2007, and subsequently was terminatated and defaulted on his loan. He did not request a distribution from the Plan yet. How do I reflect this on the 2007 5500? Is the current outstanding loan balance counted in the Plan Assets?

Can someone shed some light on the correct way to report Corrective distributions on the 5500? A CPA who is auditing a Plan that I administer is insisting that I reflect the 2007 corrective distributions that were paid out in 2008 as a liability (benefits claim payable) on the 2007 Form 5500 and netting it out of EE Contributions. Is this the correct way to do it?

Yes, we are talking about a calendar year plan, and I am doing this 5500 on the Accrual Basis. Since it is on the Accrual Basis, I thought that the Corrective Distributions must be reflected in the year that they were actually for. In this case, 2007, even thought they were paid in 2008. Can I reflect the distributiions as a Liability on the 2007 Schedule H line 1g, and also as a corrective dist on the 2007 Schedule H, line 2f? Even thought they were not actually paid in 2007, since we are using the accrual basis, can I reflect it as if they were paid in 2007?