Lori Foresz

I'm having an unusually hard time confirming this but do SIMPLE IRA salary deferrals count towards the 402(g) limit? Does it matter SIMPLA IRA vs 401(k)/ Thanks for the guidance.

Thanks both. The actuary did confirm that the amendment will not reduce the accrued benefits for 2003 (since employees have already worked 1k hours) but will decrease future plan year accruals. So, we need to send the 204(h) notice out (I presume at least 15 days before the amendment is adopted) and it is NOT a 412©(8) election since there is no retroactive reduction. Got it! Thanks!

Hi, Can a DB plan be amended before the end of the plan year to decrease the accrual rate under the plan for the plan year and future plan years? From reading the instructions to the Schedule R it seems to say such an amendment under IRC 412©(8) and ERISA 302©(8) must receive approval and must relate to a business hardship. I have been out of the DB world for a while. Any help is greatly appreciated. Thanks!

Hi, The spouse can roll over a death benefit to a qualified plan or IRA. A non-spouse beneficiary cannot. Hope this helps!

Hi, So, can an employer have a 401(k) plan and a simple IRA but only contribute to the SIMPLE? Apparently, we have a client that started up the Simple before terminating the 401(k) due to audit issues. They treat the 401(k) as frozen pending termination. Can they contribute to the simple while the 401(k) is frozen? I'm sorry, I'm not the expert on simples. Thanks for any help.

Hi, I've read the PGGC Form 1 instructions as well as ERISA 4021 and can't find an exemption from PBGC coverage for professional associations with less than 25 employees. However, someone is telling me these plans are exempt. Does anyone have a cite or can confirm this is true?? I'm just getting back into the DB world. Thanks! Signed Girl Missing the DC World

Hi, We are having some trouble defining the Net Asset figure. The auditor thinks the 5% figure is based on EOY assets. For the 5500, beginning of year always seems to be the benchmark date but I realize the audit may have different requirements. Do you know? I checked the AICPA guide and it was as clear as mud. Sorry for the questions. I appreciate the help!!

Hi, I guess when the letter arrives, I just reply back that the plan was never required to file a Form 5500-EZ. Hopefully, that will suffice and they will go away. Anyone had this happen? ???

Hi, 4a should be $10,000 and 4d should be $400. Hope this helps!

Hi, Thanks! Makes sense. Can you expand on the required disclosure of the > 5% single asset. I was unaware of this and don't want to sound stupid when the auditor calls. I appreciate your help!

Hi, Help. Can the assets held in participant-directed brokerage accounts be combined into a single asset on the financial statements as well as the Form 5500? In other words, can the auditors use the simplified reporting method that is available to Form 5500 preparer in which all assets can be combined into "other assets" and any change placed in "other income". If anyone knows, I would like to advise the auditor to check the AICPA guide. They are questioning why we combined the assets on the Form 5500 and are telling us to break them out. Many thanks!

Hi, We have a few 1-participant plans that have effective dates in 2000 and 2001 and have NEVER had assets exceeding $100k. However, EZs were filed for 2000 and 2001, apparantly due to an oversight. The employer does not employ leased or other employees, there are no other plans to aggregate, and the plan covers only the sole proprietor and his spouse. Can we just stop filing until the plan is terminated and then file a final in the year all assets are distributed? The instructions seems to imply yes, but I don't want to make assumptions and then get a failure to file notice. Does anyone have any experience with this issue?? If so, I greatly appreciate the insight. Many thank!!

Hi, Thank You. So, if I understand you, the document may informally consist of an SPD or group booklets from the insurance carriers and may not actually look like a formal plan document for a retirement plan? I'm assuming SPDs would be required. Also, do you agree that a Form 5500 would be filed? Are there types of welfare plans that are just arrangements and not actually plans required to file? I'm thinking, no, but I thought it best to confirm. Thanks!

Hi, Sorry for the basic question, but I have been out of the welfare plan area for a few years. Our client received Schedule A information from Blue Cross showing the premiums paid and the number of subscribers for the period 6/1/02-6/1/03. The number of subscribers are over 100. It is my understanding that a Form 5500 would need to be filed since the plan is fully insured and covers over 100 participants. A Form 5500 never hs been filed before, but they had filed for the POP plan through 2001 when the filing requirement for 125 plans still applied. We asked the client for the plan document for the welfare plan so we could get the plan name, plan year and effective date. The client said they do not have a plan document that he is aware of. Questions: 1) Are welfare plans required to have plan documents like retirement plans? 2) Am I correct that the plan needs to file a Form 5500. The client thinks they don't have a "plan", just a contract with Blue Cross. Is this possible? Many thanks for anyone's help!

Hi, We have been told that in the state of California, participants can elect to stop the witholding since California is a state that requires the participant's consent to withhold. I have a slight problem with this approach, since it could be used as a way to get money out of a plan that would otherwise prohibit a withdrawal. However, we have done it and will continue to allow participants to instruct re-payments to stop. I would be curious to hear what others say.

Hi, It's been a long time since I've worked on a NON-participant directed plan so bear with me. This is regarding the Schedule I question that asks if the plan held more than 20% of its assets in a single security. I couldn't find any guidance in the Form 5500 instructions. Would a mutual fund be considered a single security? Also, do you look at the beginning of year total plan value to determine the 20% figure. My recollections says yes to both but I just wanted to confirm what others are doing. Many thanks!

Hashing up an old topic, but I always thought the 403(b) had to be universally offered to everyone (or almost everyone) as qdrophile mentioned. Is this not true? Can some employees be excluded from the 403(b)? If anyone knows, please enlighten me. Many thanks.

Hi, I agree in theory, but I think that there are ALOT of plans out there were the owners/partners are individual rate groups and they decide on PS contribution amounts each year. Does anyone out there know of a situation where the IRS has come in and said this type of arrangement is a CODA? I haven't seen any published guidance that individual rate groups are deemed CODAs, however, I wouldn't be surprised if it is out there.

Hi, It is a boys and girls club that I don't think is related to a church or a government, but I will check. Does that change the requirements? Thanks for your help!

Hi, We have a not for profit company that set up a 401(k) plan. Their administrator told them they are a non-ERISA plan and did not need to file Forms 5500. I just assumed that if a not for profit set up a 401(k) plan in 2002, they were subject to all the same rules as a regular 401(k) plan including testing and reporting. Does anyone have any insight? Please advise. Thanks Lori

Hi, I wasn't exactly sure what happened, but we will call the broker and find out if the trustee simply borrowed against the cash value of the policy to pay the premium or if it was a more "creative" transaction. What was odd is that the cash value of the policy reported on the statement went down almost as much as the outstanding loan. So, it looks like the cash surrender value has already been decreased by the policy indebtedness. Seems odd. Will check it out. Thanks!

Hi, This is in response to LJRs comment in which the amounts were transferred to 403(b) account at mutual fund companies and a final Form 500 was filed. What is the basis for the final Form 5500? Doesn't the 403(b) plan still exist it just is now in MFs? Our issue is we have a 403(b) plan that was actually terminated via resolution and we want to file a Form 5500. Was it legal to adopt a resolution to terminate the plan? If not, what does a sponsor do, just continue filing a Form 5000 forever, even with no participants in the plan? Just curious. Thanks

Hi, I guess I was thinking there was some "special" way to take a loan against the policy that somehow didn't have to satisfy 72(p). I don't know that much about the mechanics of life insurance policies. Can it be a loan from the insurance company and not against the policy? I guess that's what I was thinking. Does anyone know how these work? Many thanks!

Hi, I have read the threads regarding the reporting of the cash surrender value of life insurance contracts on the Form 5500. We generally report them especially if it is a takeover situation in which they have been reported in the past. Question. A participant took a loan out against the policy, presumably to pay the large $20k a year premium required on the policy. The cash surrender value went down considerably, I presume because of this loan. Would it be appropriate to include the loan form the policy as a plan asset as well? If anyone has any thoughts, please let me know. Thanks!!

Hi, I am trying to remember the rules on which employees a SEP IRA must cover and I don't have my ERISA outline book to refer to (ouch). Can someone refresh my memory? Must the SEP be offered to all employees? I seem to recall it must cover all employees who have worked 2 out of the last five years, or something to that affect? Please let me know. Many thanks!