Earl

potential client referred to me was told (in writing by a major HR firm) that it is too late by regulation (not laziness) to start a 401(k) Plan for 2007. "plan must be in effect for one month. 12/1 was the deadline." this is not a Safe Harbor plan - there are no employees. I have searched about and can't find any reference to any deadline other than last day of year. (I told him to tell HR company to set up the plan with a 2/28/08 year and then have a short year 12/31/08. seems to work around OK to me. can't be that easy if that is a real reg.) thanks

a corporation that is not a professional service corporation under state law cannot be treated as an FSO with respect to any A-orgs. [Prop. Treas. Reg. § 1.414(m)-1©] Thanks for your replies.

I thought the 8/15 deadline went away. Doesn't the 4868 give you 6 months now? So the Sole Prop has until 10/15, I think.

Would a Headhunter be considered a Service organization for Qualified Plan Affiliated Service Group rules? Thanks

Ver 12; we had Participant A forget log-in and request email to re-set. The system sent him information to log-in to Participant B account. Anyone seen this? Know a fix? Thanks

Thank you - I appreciate your time responding.

Tom - Why do you think it applies to Prototypes only (because it says "Nonstandardized plans only")? Thanks

Husband and wife are both in a plan. Both over 80. Husband dies. Since the money then goes to the wife, would RMD calculation be the total account based upon her age or would separate RMDs continue to be calculated? Thanks

I called EBSA and they basically said what VDBadmin is saying. Any hand marking will cause a rejection on the software generated forms. They said just enter the dates of the final period in Part I and don't make and hand written marks. And at this time they said to use the 2006 form, by the way... Thanks -

I just had two of these rejected. They were final filing for terminated plans that made final distribution in Feb or March 2006. I used a 2005 form and marked it final and wrote 2006 by the 2005 in the upper right. I filed them in August, 2006 (way before the 2006 form was available). IRS issued a letter saying "not in government approved format". Any ideas on how to do this? I see that the instructions do not seem to say "mark up the form" any more. Thanks

Thank you.

What is the effective date of the new $250,000 threshold? (Is it known?) Is the question about prior filers with under $250,000 needing to continue resolved? Do they need to continue filing if they ever filed? Thanks

A payroll company put in a PS/401k plan for a client who had a PS/401k plan with me. They established it as a new plan rather than a restatement. I seem to remember but cannot find that the TP Grp election must be consistent for all plans of the employer. I used the top paid group election. They did not. Since their document is executed later than mine does that effectively amend my doc? (I would just tell the client that the payroll company is now handling the entire thing (the new plan vs restatement treated as a mistake) but they used a standardized PS doc and that will cost the employer thousands of dollars compared to my new comp plan to get the same max allocation to the partners. So I am trying to see if I can do anything to work around all this. Lots of issues to chuckle about...) Thanks

408(d)(3)(H) (once I figured out what it said) and page 23 of pub 590 answer it for me. Thanks mjb

As of today for a person with pre-tax and after tax IRA who rolls money to a Qualifed Plan: Can he rollover just the pre-tax IRA? Or would any rollover be pro-rated between the two types of money like a conversion that he would do today? Can a plan imposed limit on money received enable the rollover to be restricted to just pre-tax money? I realize everything/anything can change tomorrow, next week, next year. I look over 408 and I don't see an answer in the regs that are there today. Thanks for any knowledge anyone might share pointing me in the right direction.

A Person has a traditional pre-tax IRA. Plan is to roll it to his retirement plan so that the non-deductible IRA contributions between now and 2010 can be converted to a Roth IRA and the conversion would be 100% non-deductible to Roth as he would only have post tax IRAs. Do you think that the roll to the DC plan has to take place before the first non-deductible IRA contribution? CPA is saying that if he makes a non-deductible IRA contribution and then rolls to the DC Plan the roll to the DC plan would be pro-rated between deductible and non-deductible amounts. I think the plan does not allow for non-deductible contributions (doesn't say anything about non-deductible rollovers) so I think he could take the position that he is not allowed to accept the non-deductible money. So I think the rollover to the DC plan just has to happen before 12/31/09, not before the first non-deductible contribution (4/16/07). Any thoughts? Thanks.

I have a 3 group plan, 1) owner, 2) Son, 3) All others So 1 & 2 are HCEs. If son does not get a Profit Sharing contribution is the HCE ratio percentage 50% or 100%. There would be an elective declaration of $0 to his group for this year. He is not terminated or denied money by anything other than employer election. My thought was 50%, but this case has me wondering. http://www.investmentnews.com/apps/pbcs.dl...E/70323019/1037 Maybe it is 50% and he is still an active participant? (a combination of the two issues) Thanks Earl

Thanks, Denise Since that guess was wrong, here is another. I am guessing that IRAs means IRAs and not individual account plans so that 403(b)s would not count? Great web site, too, by the way. Earl

It is my understand that the conversion calculation includes all IRAs. You can't carve out a specific IRA as a non-deductible IRA and convert only it. What does all IRAs mean? I am guessing that SIMPLES and SEPs are excluded when calculating the percent of the conversion that is taxable? Thanks

Thanks - I kept thinking something about "universal availability" - but I think maybe that is catch-up contributions... I appreciate you taking the time to respond.

2 Cos. are a controlled group. Co 1 has no owners on payroll, no HCEs, no Keys. If Co 2 has Safe Harbor provision in the 401(k). Must Co 1 also have Safe Harbor provision? Co 2 has about 50 EEs and Co 1 has 4 so coverage issues are not in play. No other plans or contributions other than 401(k) defs and SH match in each company. Thanks

How does this work mechanically with PPA? You mail distrib materials and updated 402f notice and now wait 180 days then involutarily roll to an IRA? Thanks

Seems to be. 3% of full year comp tested on 8 months of comp. (for the EEs) Thank you

Once more, sorry. This plan was PS only in 2005. Owner only eligible EE. 401(k) added effective 5/1/06. EEs enter 401k on 5/1, PS on 7/1 and plan is Top Heavy. Would you cross test on 5/1 - 12/31 comp using 3% of full year comp as the allocation? I am solving for the max to the owner based upon the TH min only. Thanks again.

Thanks, Mike. It's 1 plan. From my document: Compensation Taken into Account. The Employer in its Adoption Agreement Section 1.07 must specify the Compensation the Plan Administrator is to take into account in allocating an Employer contribution to a Participant's Account. For the Plan Year in which the Employee first becomes a Participant in the Plan (or in any portion of the Plan), the Employer may elect to take into account the Employee's entire Plan Year Compensation or to limit Compensation to the portion of the Plan Year in which the Employee actually is a Participant. For all other Plan Years, the Plan Administrator will take into account only the Compensation determined for the portion of the Plan Year in which the Employee actually is a Participant. The Plan Administrator must take into account the Employee's entire Compensation for the Plan Year to determine whether the Plan satisfies the top-heavy minimum allocation requirements …. Eligibility is 6 months for 401k, 12 months for PS. You are saying use full year compensation for the 401(a)(4) testing for a person in the k portion 12 months and the PS portion 6 months? If yes, that makes the AB%T simpler, but if no, what comp and allocation do you use for the AB%T? Thank you.