SMB

A question for the "product people" (especially those of you who deal with insurance companies)- A client was informed that they could not purchase an equity indexed annuity contract as an investment of their Profit Sharing Plan due to the "Harris Trust Ruling". Can anyone enlighten me as to what the "Harris Trust Ruling" is and says? Thanks!

LLC taxed as a partnership (domiciled in Texas, in case it matters). Accountant has provided compensation information to calculate and allocate the contribution for the LLC Profit Sharing Plan for the LLC "members". However, the members have both W-2 income and K-1 earned income. Is this actually possible? Thanks!

Are Forms 5558 still filed with the "appropriate" IRS office (i.e., Holtsville, NY Atlanta, GA or Memphis, TN) versus the DoL? Thanks!

Am looking for providers of an "integrated" SEP (which must be on a prototype SEP document versus IRS Form 5305-SEP) with which readers have had experience. Thanks for any and all responses.

Client is considering adopting a new 401(k) Plan for 2001 (no existing or prior plan) and may need to go "safe-harbor" (i.e., 10 ees - at least half of whom will be HCEs). Ideally, the decision would have been made 60 days ago and the safe-harbor notice distributed by 12/01/00. However.... Am I correct in my understanding that, if the 401(k) Plan is to operate under the "safe-harbor" provisions, it cannot be made effective until at least 30 days following distribution of the safe-harbor notice, resulting in a short plan year? Could the Plan be made effective 01/01/01 (so the Plan could use full calendar year compensation), with salary deferrals not starting until 30 days from the date of the safe-harbor notice - or is this too logical to be legal?!

What are the consequences (deemed distribution and/or plan disqualification and/or ?) of a more than 10% partner receiving a loan from the partnership's Profit Sharing Plan? Is there any corrective remedy available under EPCRS? Thanks for any and all responses.

How are "ownership interests" determined for members of a Limited Liability Company (LLC is taxed as a partnership]?

Need to terminate and distribute a DC plan yet in 2000. Since, at least to my limited knowledge, there are as yet no approved "GUST"-restated prototype plan documents available, how does one amend a plan for "GUST" in order to terminate? Thanks for any and all repsponses.

When must a "traditional" 401(k) plan, with a 10/01-09/30 plan year, have to have been amended to convert to a "safe-harbor" 401(k) for its plan year ending 09/30/00? Thanks to all respondents!

How can an employer whose employees are being enticed to join a union "discretely" determine the funding status of the union's DB pension plan? Thanks!

Client currently maintains a salary deferal only 403(B) plan and a separate 401(a) profit sharing plan. Client is considering maintaining just a single program - either by providing for the employer contribution in the 403(B) plan or by adding 401(k) provisions to the profit sharing plan. The client is not considering an employer matching contribution under either scenario. I am not familiar enough with the pros and cons of 403(B) plans to determine which might be the better approach. Any input from "403(b)ies" would be most appreciated!

"Parent" is the owner of a company which sponsors a profit sharing plan. "Parent" wants to switch plan's investments to "Son", who is a broker. Doable - or a prohibited transaction? Would appreciate any input and/or references to PTE exemption or prior threads where discussed. Thanks!

Company A acquires Company B (asset sale). Company's B's employees become employees of Company A as a result of the sale. Company A sponsors a 401(k) plan. Company B had no plan. Company A wishes to grant the new employees coming from Company B credit for service with Company B for eligibility and vesting purposes under the Company A 401(k) plan. Any problems or issues in doing do?

Is there an issue with regard to the loan collateral?

Am trying to get quotes on E&O insurance. Does anyone have a phone number (and possibly the name of a contact person) for either Cal-Surance or CIMA Companies, Inc.? Thanks!

Dear mming - First of all, I have some difficulty believing that you have a CORBEL document that does not address this issue. I have a number of plans that use a CORBEL prototype (versus volume submitter). Check the underlying Plan & Trust document. Look towards the very end of "ALLOCATION OF CONTRIBUTIONS, FORFEITURES AND EARNINGS" - Section 4.3(n) in the doc I have - which specifically addresses how to correct a failed 410(B) test. Also, I assume from your post that you failed the "Ratio Percentage Test" of 401(B). Did you check to see if you may have passed via the "Average Benefits Test"? You can sometimes be pleasantly surprised!

Existing 401(k) Plan with a 10/01-09/30 plan year. Wants to convert to safe-harbor (getting killed on ADP test). Am I correct in my understanding that this plan cannot add safe-harbor provisions until the plan year beginning 10/01/2000 (i.e., may not be amended for the current 10/01/99-09/30/00 plan year)?

Have a 401(k) Plan which does NOT provide for return of ee salary deferrals in the event of a "415 excess" - uses the "415 excess suspense account" approach. Participant incurred a 415 excess for the 1998 plan year (employer made a large PS contribution). A "415 excess suspense account" was created for this participant, which presumably would be allocated as part of the 1999 PS contribution. However, a PS contribution was NOT made for 1999 plan year. Is the "415 excess suspense account" allocated to this participant for the 1999 plan year (despite the fact that no PS contribution was made), or does it continue to be held in suspense until the employer makes a PS contribution? Document (CORBEL volume submitter) does not address this specific situation. Anyone with prior experience and/or any thoughts? Thanks!

Am I correct in my understanding that a corrective distribution of employee salary deferrals to correct a 415 excess is not subject to the 10% excise tax? Need to confirm before the 15-month deadline for filing Form 5330 expires 03/31/00. Thanks to any and all for your response!

Dr. is an employee of his own incorporated medical practice. He is also an empoyee of the local hospital and participantes in the hospital's TSA program. Does Dr.'s TSA contribution affect his 415 limit under his practice's PS Plan? I know it used to (at least we ran the Plan as if it did!) - but with all of the recent changes, I'm just not certain anymore. Any and all input and cites welcome and appreciated!

Had the same thought regarding both SIMPLEs and safe-harbor 401(k)s when first introduced. From a purely financial aspect, there is absolutely no incentive for an employer to promote either type of program, especially if the employer is making the required match (vs. a non-elective contribution). In a small plan - single HCE/owner - who is happy with a $10,500 deferral and a 3% match, doesn't really care if no one else "shows up".

Just to make a clarification to Spencer's post - a plan is never "required" to file a request with the IRS for a determination letter, although it is usually recommended (especially by those who get paid to prepare the submission packages...).

Partnership which sponsors a PS Plan is going to incorporate. Should the new "corporation" adopt its own plan prior to year-end (granting credit for eligibility and vesting for service under the partnership plan) and the partnership merge its plan into the new corporate plan - or is there a better way? If addressed otherwhere in Message Boards please advise. Thanks to all who take the time to respond.

Does anyone know of or has worked with an investment provider (i.e., mutual fund family or brokerage) that maintains participant accounts by source of contribution - deferral, match, er discretionary, QNEC, rollover, etc. (i.e., similar to a group annuity w/o the insurance trappings and associated costs)?

(I previously posted a similar query under "Retirement Plans in General". Thought I might generate more response here.) Want to install a cross-tested MPPP with the understanding that the allocation formula might need to be amended from time to time in response to changing revenue and/or employee demographics. Have seen a number of threads noting the IRS' "dislike" of frequent formula amendments in a MPPP. Does anyone know if this "dislike" has any statutory basis? Has anyone had any experience with the IRS regarding this issue?