SMB

Does anybody know of a web site that might have what I would call a "reverse" loan calculator whereby you input the loan amount, interest rate and payment frequency and the calculator determines the number of payments and the last (usually slightly different) payment amount? This is for those participants who want to specify a specific dollar amount per pay period that they want to pay on a participant loan. Thanks - any and all info, comments and/or suggestions welcome!

O.K. - what gives? 2 days, 34 "views" and not a single reply! Is it really that difficult - or so obviously simple that I shouldn't have posted the original message?

Ineligible expenses paid from Plan. Employer to make a restorative payment plus lost earnings. Lost earnings in this case must be calculated using the DOL 6621(a)(2) "underpayment rate" approach (i.e., applicable federal short term rate + 3%). That much has been determined - but I don't have a clue as to how to actually do the calculation. Suppose, for purposes of this example, $10,000 was incorrectly paid from the Plan January 2, 2004 and repaid by the employer July 15, 2004. Do I calculate using each month's annual AFT (+3%)? For example, January 2004's short-term annual AFR was 1.71% Is the calculation $10,000 x 4.71% / 12 = $39.25? Do this for each month and add up the pieces? Or what?! Thanks for any and all responses. (Read a quote last week that seems to apply- at least in my case: "There is often a wide chasm between reading the map and hiking the trail."!)

Dear Tom, AndyH & Blinky, As much as I enjoy your warm ups for the "Last Pension Comic Standing", I'd really appreciate some serious feedback on my initial question. Thanks!

Dear WDIK, Yea - those were my major concerns, also, but thought I should have the "big guns" (and anyone else) weigh in on the subject...

Have reviewed most of the prior posts in this section, but did not come accross exactly my situation. If addressed previously, just point me to the post. Have a 401(k) sponsored by an LLC (taxed as a partnership). The partners (6 of them) would like more flexibility in designating the amount of their individual "profit sharing" contribution amounts - i.e., some would prefer nothing, others the maximum available, still others somewhere in between. Sound familiar?! Can this be accomplished via "class allocation", with each participant constituting his/her own class? Or, since the amount of a partner's profit sharing contribution directly affects his/her "compensation", would such profit sharing contributions for the partners be "deemed deferrals"? Also, even though the "employer" would technically be designating the individual profit sharing contribution amount for each partner, we all know that, in reality, each partner is making the call. The plan is already a 401(k), so the "deemed CODA" aspect didn't seem to be an issue, but since the common law employee participants do not have the same ability to designate the amount of their profit sharing contribution, I suspect there might be other issues with which to contend. Thanks for any any all comments.

Reply to SRM: Corporation A is 100% owned by Dentist A. Corporation B is 100% owned by Dentist B. Corporations A and B will each own 50% of the new partnership.

I have a pending controlled group situation in the offing and need to know just what issues need to be considered and/or addressed (this is uncharted territory for me). The situation is thus: Corporation A and Corporation B are forming Partnership C (a partnership of Corporations A and B). Corporation A currently sponsors a DC Plan. Corporation B currently sponsors a DB Plan. Some employees of Corporation B will be splitting their time between Corporation B and Partnership C. Partnership C will likely also be hiring employees in addition to those individuals being "split" with Corporation B. Don't even know where to start! Any any all input most appreciated.

Participant in a participant-directed DC plan is doing some estate planning and has inquired as to whether the Plan would allow an individual designated under her durable POA to direct the investment of her Plan account in the event of her "incapacity". Has anyone ever run into such a situation? What are the "considerations" relative to a qualified plan? Any and all comments appreciated.

Partner in a law firm went to "Of Counsel" status as of 01/01/03, essentially becoming an independent contractor (at least that's my very limited understanding of the change). Does this individual need to establish his own 401(k) Plan, or could the Partnership Plan be amended to cover former partners who become "of counsel"? If the Plan is amended to extend coverage to this individual, would that make the plan a "multiple employer" plan? Any and all responses most welcome - especially from those of you who might have encountered such a situation in your own Plan or practice.

Does anyone have a sample of a QDRO for a DC plan that they feel is well drafted and unambiguous (if there exists such an animal) that they would be willing to share (via e-mail or fax)? If so, please post or provide contact info. Thanks!

Wasn't sure just where to post this, since we don't have a specific thread for QDRO's... Divorcing parties have not been able to come to an agreement on the separtion of assets. Judge wants to draft an order requiring that participant use a portion his Profit Sharing Plan balance to pay off all marital debt, with an additional portion to be paid to the ex-spouse, as alternate payee. It would seem to me that QDRO payments can be made only to an alternate payee who is a "person" (i.e., spouse, ex-spouse or child). Has anyone ever seen such a QDRO provision? If so, to whom (participant or alternate payee) is the amount paid to creditors taxable? I guess an alternate approach would be to include the marital debt amount in the alternate payee's distributable portion, but what guarantee would there be that it would be used to pay off the marital debt? My QDRO experience is (thankfully!) extremely limited, but this approach would not seem to pass muster. Thanks for any and all responses!

Have a dental group with 3 dentists that wants to establish a new-comparability class allocated profit sharing plan. Are there any considerations and/or adverse repercussions to defing a participant class specifically by name for each of the dentists, with a fourth class for all other eligible participants? Thanks for any and all responses!

One individual is the sole owner and only employee of multiple incorporated businesses - an obvious "controlled group". Owner wants to adopt an SEP, especially given the new 25% deduction limit. This cannot be done via a Form 5305-SEP due to the controlled group issue. Does anyone know if this can be accomplished via a non-model prototype SEP? Thanks!

I have an owner-only client who has never had a cash flow problem. Is there a "magic age" at which a significantly larger contribution (i.e., more than $40,000 in a DC plan) can be achieved with a DB plan? Since my experience is limited solely to DC plans, I'd really appreciate some input from you DB folks. Thanks!

LLC (taxed as a partnership) sponsors a Profit Sharing Plan. Plan allows participants to "opt out" on an annual basis. Other than possibly being considered a deemed CODA if such an "opt out" affects compensation, are there any other issues or considerations - especially with regard to a LLC member opting out? I seem to recall that with a 401(k) Plan , a partner's opting out had to be irrevocable, but this is a Profit Sharing Plan. Thanks!

I am trying to assemble a list of providers who offer prototype (i.e., non-model) SEPs. Any and all responses are most appreciated!

The following question was posed to me and I didn't have a clue - Individual is a partner in "Partnership A" that sponsors a Profit Sharing Plan. Same individual is also a partner in "Partnership B" that does not sponsor a plan. Individual has earned income from Partnership A and a loss from Partnership B - with a total net loss for income tax purposes. Does the net loss affect this individual's ability to deduct his Profit Sharing contribution received from Partnership A? (For purposes of this question, assume no controlled group or ASG issues.) Thanks for any and all responses!

401(k) plan with dual eligibility/entry - immediate for 401(k) deferrals, 1 Year of Service/semi-annual entry for employer discretionary (no matching). Employer discretionary contribution is cross-tested class allocation. I am "assuming" (always dangerous!) that for purposes of the 401(a)(4) non-discrimination testing on the employer discretionary contribution that employees who have not met the 1 Year of Service requirement are excluded from testing, even though they are "participants" by virtue of being eligible to participate in the 401(k) component. This is my first experience with this particular situation and would certainly appreciate any and all input from those of you who have "been there, done that"! Thanks!

Client currenlty operates both its business and its PS Plan on a 11/01-10/31 tax year/plan year. Wants to change plan year to calendar year effective 01/01/02 and add 401(k) provisios to take advantage of (1) new increased PS deduction and (2) non-inclusion of 40(k) contributions in the deduction limit. Will obviously involve a short plan year 11/01/01-12/31/01. The businsess is to remain on its original 11/01-10/31 fiscal tax year. I am confused as to what contributions for what plan years will be deductible for which business tax years. I would appreciate any comments, suggestions, recommendations, cautions, etc. from our more knowledgeable and experienced readers regarding this situation. Thanks for any and all responses!

I am trying to determine if there are any providers of participant-directed investments (with recordkeeping/sub-accounting by contribution source) that offer investments among various fund families, similar to that offered by insurance company group variable annuities. I know some of the mutual fund families (e.g., American Funds, MFS, etc.) offer a vehicle using their own family of funds. Does anybody know of anybody that has a "best of the best"-type product - other than via a variable annuity? Thanks!

I have some 2 and 3-participant DC plans and have a real problem with the SAR requirement - especially when the investments are participant-directed. Obviously, it's fairly easy for employees in such situations to figure out the amount of the business owner's plan account (and, potentially, his/her salary) - information which in definitely not "open to public inspection"! Has anyone else out there grappled with this "privacy" versus (relatively meaningless) "disclosure" issue? Has anyone ever seen/heard the DOL comment on the issue? Thanks for any and all input!

Have found next to nothing with regard to and have no prior experience with "multiple employer plans". I would appreciate any and all comments from my "esteemed and learned peers" regarding the following situation: "Dad's" company sponsors a 401(k) Plan. Dad's adult "Son" owns his own small business. No overlapping ownership interests, so I am assuming (hoping?!) not a controlled group. Dad wants to let Son's company become an adopting employer of Dad's company's 401(k) Plan (to save start up document costs and to help defray ongoing admin costs). Would this be a "multiple employer plan"? What are the considerations, ramifications, benefits, downsides, etc., of such an arrangement (e.g., recordkeeping, testing, 5500, etc.)? Thanks to all for your valued input!

401(k) plan failed ADP test for 1999 (calendar year plan year). Corrective distributions to HCEs were not made by the end of 2000. Consequently, correction of failed ADP test for 1999 plan year still needs to be effected. QNECs to all NHCEs would be prohibitively expensive. I heard, read (or dreamed!) somewhere of a correction method called "dollar for dollar" where corrective distributions are made to the HCEs and a QNEC equal to the total amount of the corrective distributions is made and allocated to the NHCEs. Can anyone point me to a prior post or information regarding this subject? Thanks!

Client wants to terminate its traditional 401(k) and establish a SIMPLE IRA yet this year. Employee salary deferral contributions have been made to date in 2001 under the existing 401(k). It is my understanding that the SIMPLE IRA program cannot be established in 2001, since contributions have been made in this calendar year under the existing 401(k) plan, and the SIMPLE IRA cannot start any sooner that 01/01/02. However, whoever is helping the client establish the SIMPLE IRA has indicated to them that this is not the case. Am I correct in my understanding of the SIMPLE IRA rules - or did I blink and miss a change?! Thanks for any and all responses.