John A

KJohnson, Kirk Maldonado: Is there any restriction on what the stated age can be? So could the only restriction be attainment of age 1?

Can a profit sharing plan allow in-service distributions immediately (no matter how long the funds have been in the plan and no matter how little service the participant has) for everyone in the plan by specifying that in-service distributions will be available upon attaining age 1 (or 18)? What would prevent this?

Does the GUST remedial amendment period extension in Rev. Proc. 2002-73 that was released today have any effect on the EGTRRA good faith and/or Required Minimum Distribution amendment due dates? http://benefitslink.com/IRS/revproc2002-73.shtml

Has anyone else heard that the GUST restatement deadline for prototypes may be extended one more time? If you know anything about this, what have you heard?

Related question: How are the 412m quarterly contribution dates for a plan year that starts and ends in the middle of a month (such as January 17, 2002 to January 16, 2003) determined?

The new Blackout Period notice requirements are effective January 26, 2003. Does this mean notices must be given 30 days prior to January 26, 2003 for blackout periods that start January 26, 2003? Or does it mean notices must first be given starting January 26, 2003 and will first apply to blackout periods starting after January 26, 2003? Or do we have to hope that the coming guidance (by October 13) will clarify this issue?

I agree that Arkansas and North Carolina are clearly the only fully nonconforming states. However, is it not still true that there are issues in: New Jersey for 403(B) and 457 plans? California due to the suit to block the EGTRRA conformity bills that were passed? Also, I wish I could find something that said that Michael Mason of Alabama stated that Alabama is fully conforming. Pax, I believe the list you refer to showed Alabama as a conforming state at the time Mr. Mason made his comments - that is what bothers me. Was Mr. Mason wrong? Or does the list reflect only a partial truth? The same list does not mention New Jersey at all, despite the EGTRRA conformity problem in New Jersey for 403(B) and 457 plans. Does anyone disagree with any of this post?

On 5/13/02, Benefits Link showed an excerpt from a Birmingham new source: Excerpt: "Michael Mason, director of tax policy for the state Department of Revenue, says Alabama law conforms to federal law on the initial contribution increase. He says the problem is the catch-up provision. 'Those people will still be able to contribute the higher amount, but it will be taxable for Alabama purposes,' Mason says.... [L]egislation that would have brought Alabama into compliance with the catch-up provision failed during the recent legislative session." However, Alabama is not on any list of nonconforming states that I have seen. Does anyone know if Alabama fully conforms to EGTRRA including the catch-up provision, or does Alabama actually only partially conform, so that Alabama does not conform to age 50 catch-up provisions?

mbozek, Could you provide a cite for: Note: the one year applies after participants have been married for one year even if they were not married for one year as of the date retirement benefits commenced. I'd appreciate it.

The preamble to Proposed Reg 1.414(v)-1 specifically states that matching contributions made on age 50 catch-up contributions will be subject to ACP testing. However, it does not appear to me to clearly address how matching contributions on age 50 catch-up contributions affect a plan that otherwise meets the safe harbor requirements to be exempt from ACP testing.

Do others agree with Alf that: You can still be matching contribution safe harbor and no ACP (not nonelective safe harbor) with a match on CUs as long as you do not exceed the matching contribution limitations set forth in the ACP safe harbor rules. Or do others think that if you match age 50 catch-up contributions, then you will have to ACP test all matching contributions even if the plan would otherwise satisfy the ACP safe harbor?

May a plan document that requires 1,000 hours for vesting service provide that an active employee will be credited with a year of vesting service as of the end of the vesting computation period while a terminated employee will be credited with a year of vesting service as of the employment termination date (in each case provide 1,000 hours of service were credited during the eligibility computation period)? For example, an employee is hired January 1, 2000 in a plan with a calendar year plan year. A year of vesting service is defined as 1,000 hours in the vesting computation period. The plan has a 3-year cliff vesting schedule. The employee worked 1,000 hours in 2000 and 2001. The employee has worked 1,000 hours from January 1, 2002 to May 31, 2002 and would like to take a loan of 50% of the vested balance of their account. Can a plan provide that this employee is 0% vested (and thus not eligible for a loan) until December 31, 2002, provided the plan also says that the employee will get credit for the 2002 year of vesting service (and so be 100% vested) if the employee terminates employment on or after May 31, 2002? The closest previous thread I found to this question is below, but it is not exactly the same question. http://benefitslink.com/boards/index.php?showtopic=8608

I don't necessarily disagree, but I do have comments/questions on some states you do not list: California: While it is currently a conforming state, a California taxpayers association has sued to block implementation of the conforming bills. Does anyone know the current status of that suit? Maine: Did final EGTRRA conformance include deductions for qualifying educational expenses and credit for state death taxes, or are these still open issues? New Jersey: Does EGTRRA conformance include or exclude 403(B) and 457 plans? Alabama and Georgia: Did they both go to full conformity, or is there still some question about state tax deductions for age 50 catch-up contributions (age 50 catch-up would be allowed but would be taxable at the state level)?

Is a 5500 required for an entirely voluntary, group-sponsored vision plan? It that is not enough information to make a determination, what further info. do I need to determine if a 5500 is or is not required?

Is a 5500 required for an entirely voluntary, group-sponsored vision plan? It that is not enough information to make a determination, what further info. do I need to determine if a 5500 is or is not required?

http://www.benefitslink.com/cgi-bin/qa.cgi...d=184&mode=read How many of you agree with the interpretation of the multiple employer plan rules given in the thread above (allocations are not what count, separate trusts are what count)? How many of you would disagree and would be one of the "many practitioners read that to say" (allocations are what count, not separate trusts)?

Mike, So you believe that 404(a)(3)(A)(v) replaced 404(a)(1)(A)(i) for money purchase and target plans, rather than begin in addition to 404(a)(1)(A)(i)? In other words, you believe the EGTRRA deductible limit for money purchase and target is 1) 25% of compensation for the taxable year, rather than: 2) the lesser of: a) 25% of compensation for the taxable year, or b) minimum funding for the plan year ending within the tax year? Why do you think 1) is true rather than 2)?

Thanks, Mike. Would any of the adjustments specified in Rev. Rul. 80-267 apply to the short tax year, 10/1/03-12/31/03, for determining the deductible limit for a money purchase or target plan?

How is the deductible limit calculated for a target plan or money purchase plan when the tax year and/or plan year is changed? For example: 1) Tax Year is Calendar Year 2003. Plan Year is Changed from 7/1/02-6/30/03 to calendar year, creating short plan year 7/1/03-12/31/03? 2) Tax Year is 10/1/02-9/30/03, and is changed to calendar year, creating a short tax year 10/1/03-12/31/03. Plan Years are 11/1/02-10/31/03 and 11/1/03-10/31/04. How is deductible limit calculated?

Is it possible for the same plan document to be used for 2 different plans? For example, if an employer has one plan for non-union employees, and a separate plan for union employees, can both plans be included in the same document (not a prototype, not separate but identical plan documents, but actually the same document which lists both Plan 001 and Plan 002)? Or does each plan have to have its own separate document?

A defined contribution plan had a full plan year from 7/1/00-6/30/01 and a short plan year from 7/1/01-12/31/01. Employee A worked 400 hours each 6 months - 7/1/00-12/31/00, 1/1/01-6/30/01, and 7/1/01-12/31/01, but terminated employment 12/21/01 and did not receive a contribution allocation for the short plan year due to a last day requirement. For coverage testing purposes, is Employee A an excludable employee for the short plan year due to being a terminated participant with 500 or fewer hours of service? or does the 500 hour level have to be prorated (to 250 in this case), so that Employee A would not be an excludable employee?

I don't think there's any guidance in this area, so I would like to know what common practice is in the following area: How do you treat money of an alternate payee for top-hevy purposes? If the money is segregated from the participant to the alternate payee, for top-heavy purposes: do you treat the money as if it still belonged to the participant, as an in-service withdrawal, or how do you treat the segregated money for top-heavy purposes? If the money is distributed to the alternate payee, for top-heavy purposes: do you treat the money as if had been distributed to the participant (in-service withdrawl if participant is still employed, "regular" distribution if participant has terminated employment), or how do you treat the distribution to the alternate payee for top-heavy purposes. The prior threads I found on this topic were: http://www.benefitslink.com/mbmirror/11195.html http://www.benefitslink.com/mbmirror/9220.html What are your practices regarding how alternate payees are treated for top-heavy purposes?

If a participant did not receive a Required Minimum Distribution that was due by 12/31/01 (not first year so no extension to 4/15): 1) Is there really any due date for when the 2001 Form 5329 is filed? 2) Are there any consequences if the 2001 Form 5329 is not filed by 4/15/02? 3) Is the penalty to be paid 50% of the RMD, with no adjustments for interest or anything else, whether the 2001 Form 5329 is filed in 2002 or 2006?

Thanks, Mike. No matter how many years of experience I get, I will never be offended by someone asking if I've read the document. But in this case, yes, I had read both the prior and the current adoption agreement and prototypes, and I did not find anything that required spousal consent (which I think would be an unusual provision for any prototype - though possibly more common for an individually designed document).

mbozek - please look at 1.401(a)-20 Q&A 33(a), last sentence - do you think that gets me the argument I need?