Lou S.

Sieve, thanks for your insite. I found a really interesting IRS piece doing a google search that has quite a few practical examples. None fit my situation perfectly but a few were pretty close and in each case it would appear the BD is not considered a service organization and thus no ASG which agrees with your input. Here is a link to the document for those who want a bit more detail than the regs provide on CGs and ASGs though I'm not sure the date of this publication as it is just Chapter 7 of a larger document and I have not found the full document. http://www.irs.gov/pub/irs-tege/epchd704.pdf

I agree with this. You need to keep the MPPM seperate as it retaing the money purchase charateristics - if you don;t separately account all money would be subject to MP rules. The only issue on vest is if it is not the same schedule, then it would be treated like a change in vesting. Assuming you are keeping the same vesting schedule then you would just march forward with it.

To ask their pension people. Their attorney isn't an ERISA guy. Real Estate would appear apear to fall out side of the deliniated group of FSOs (Health, Law, Engineering, Architecture, Accounting, Actuarial Science, Performing Arts, Consulting and Insurance). I was just wondering if anyone else had something a bit clearer in this specific area without submitting a request to the IRS for determination.

We have a potential client if he is not an affiled service group. He is a real estate broker who has Schedule C income. He also owns about 30% of a real estate broker dealer ship. About 90% of his Schedule C income is from deals run though the broker dealer he has ownership in. To me this sounds like an ASG but I'm not sure because real-estate agents often fall under some strange employement relationship rules. They clearly don't meet the controlled group ownership tests.

Thanks for the input. QSLOB doesn't help as one company doesn't have enough employees to qualify.

Looks like the answer is yes they are controlled. I can't find any thing that would exempt them from the CG rules.

Since the lease and loans are to Corporation Y (I assume directly) I think you are OK under 3(14)(G). Since there is not 50% ownership based on your facts. But I'll be the first to admit this is not my area of expertise. If someone has something clearer, I would go with that.

If a foreign parent cororation with no US employees directly owns 100% of the stock 2 unrelated business with employees in the US, do the two US businesses constitute a controlled group of corporations?

Thanks, that's pretty much what I thought, just was hoping I missed something. We'll probably suggest to qualified replacement plan which should eat up the excess in 2 years.

We have a 1 participant DB Plan that may be over funded by about $100K. The plan was underfunded so he delayed terminating but then had some good investment results along with getting older than age 65 and now the assets exceed the maximum lump sum limit. His 3 year high comp limit is only about $140K so unfortunately we are running into that cap on the lump sum. The question I have is can he payout 1-year worth of anuity benefits as taxable income and then roll out the rest to an IRA or does this violate the §415 limits? If he can't avoid the reversion, can he roll the excess to a qualified replacement plan and allocate to himself and avoid excise tax? He has never had any employees other than himself.

It is allowable and is done with small non-PBGC plans quite often. A lot things are done that don't seem right but the IRS allows them. Just follow the rules of the plan doc and make sure that it is nondicriminatory. In most cases we've dealt with the owner waived a portion of their benefit to make the plan whole but they didn't have to be that nice.

Sounds out of date. I think that was changed quite awhile ago. Perhaps as long ago as SBJPA.

I'm assuming you've always used prior year testing. If that is the case why don't you use option 3. Re run the ADP/ACP test for 2006 with deferral in ADP and qualified match in 2006 in ACP and use those only as your prior percentages for 2007. I'm not sure there is regulatory athourity for this though.

Check your document as to when participants enter the plan, but it sounds like full year comp is correct for the PS. We do this quite often for new plans.

Not sure if it is correct but any time an HCE took a taxable distribution (unless it was a required 401(a)(9) minimum) we reclassify part of the distribution as the refund and isses amended 1099-Rs. That way he/she escapes the 10% penalty if they are under 59 1/2.

Thanks. I've done a bit more digging since my initial post and I'm still a bit confused. Maybe I didn't state the conditions properly. In looking at Rev-Rul 2004-13, IRC 416(g)(4)(H) and IRC 401(k)(12) it would appear that if you have a safe-harbor 401(k) plan that gives the safe-harbor contribution to all NHCEs (no NHCE exclusions), but does not give the S-H to any HCE, and that is your only employer contribution for the year, then your plan is deemed "not top-heavy" under IRC 416(g)(4)(H) for that year and you do not have to give the "top up" T-H minimum to the non-key HCEs who are ineligible for the S-H contribuion becuase your plan statifies all requirements of IRC 401(k)(12)©. Assume all notices proper and timely. Am I reading the code wrong, or is it just wishful thinking on my part trying to save the client from making an addition contribution that they don't want to make?

If a safe harbor 401(k) plan that makes the 3% safe-harbor nonelective contribution for all NHCEs (HCE excluded) is also top-heavy, does the plan satisfy the T-H contribution requirement if they have non-key HCEs who are not receiving the 3% S-H contrib? They do not want to make any additional er contrib besides the 3% to all NHCEs.