Earl

regarding the various names.... a financial adviser called me early one morning a couple years ago wanting to know what a "eunuch plan" was. Took me a couple of minutes to figure it out..... until I asked him to spell it. Now I use that story to describe a simple 401(k) plan.

I have used the mail to St. Louis/Financial Agent method literally hundreds of times. I have never had a problem other than: 1. Stale Tax ID numbers. For some reason they credit it to the plan sponor's Tax ID number. That's a hassle to fix. 2. Change name of plan. It is a nightmare to change the name associated with a Tax ID number. Now that they have the web SS-4, I am getting new ones in that case. For a while I was filing 401(k) taxes under "ABC Co., Inc, Pension Plan". That's too hard to keep track of. If the name doesn't match - credit goes to the sponsor's tax ID number. 3. I try to get the sponsor to enter the tax period so I am not setting them up for a late deposit penalty if they don't get around to it for a month or so. Frequently they forget to enter anything. IRS usually guess right in applying the payment. They generate a letter telling which period they applied it to. Apparently with name change/stale number they look up the 5500 and find the sponsor. I wish they would freakin' call up the telephone number on the coupon. Sure would save some time.

if the trust uses the sponsor's tax id number it is subject to the payment requirements of that number. if the trust has its own tax id number: Withholding Procedure: Deposit with 8109 coupon, as 945 TAXES, under the Trust Tax ID # at your Bank. However, your Bank may not accept tax deposit if check is not drawn against an account at your Bank. ALTERNATIVE: Make check payable to United States Treasury and forward with 8109 coupon under the Trust Tax ID # to the following address: Financial Agent Federal Tax Deposit Processing P.O. Box 970030 St. Louis, MO 63197 you can get a trust tax id number in two mins @: http://www.irs.gov/businesses/small/articl...=102765,00.html

works for me

Isn't it true that SEPs and SAR-SEPs are aggregated for Top Heavy Testing?

aren't the spousal consents irrevocable unless the participant changes the original election? My forms so specify although I don't know if that is a reg.

Unless you want to get rid of J&S

beautiful....

Seems to me to be one plan and I would assume that B enters PS 1/1/04 or later and thus, if disaggregated into componant plans, B, as an otherwise excludible, could get just 3% if that componant passes coverage and non-disc. (exclude from gateway)

I would assume that the biz could take the deduction for that expense. That doesn't relate to the interest paid by the participant to the plan.

You would be looking at a short year and the pro-rating. Luckily I put in a DB and just did a BOY valuation.

If its not a Key Employee and not 401(k) money and secured by the house.

Or what if the older of two owners sells his stock to a new employee that is 10 years younger than any other employee of the company? (And actually he was hired before the prior year but since he was not eligible he did not "need" to be on the census report.) So now he is key, HCE and eligible. (ka-boom... the sound of a retirement plan exploding.) Think that might make a difference and think you might ask your administrator BEFORE the sale takes place to see what might happen? Well, hmmm, maybe.... Naaaahhhh....

I would apply the payments to whatever loans were not defaulted when the payments were received. (not the 3rd one) Reclassify.... When the money went out it wasn't a hardship distribution. I wouldn't mess with that.

just to further the devil... Don't you have to be a doctor to own a medical corporation? so the kid couldn't inherit it?

There is a rule for change in vesting schedule when a plan goes top heavy, but I am unfamiliar with effect of voluntary change. It sounds consistent with the concept below, but I can't find anything that says you can. § 1.416-1 Questions and answers on top-heavy plans. T-43 Q. What happens to an individual who has ceased employment before a plan becomes top-heavy? A. If an individual has ceased employment before a plan becomes top-heavy, such individual would not be required to receive any additional benefit accruals, contributions, or vesting, unless the individual returned to employment with the employer. See Questions and Answers V-3, M-4, and M-10. In addition, if the individual is receiving benefits based on annual compensation greater than $200,000, such benefits cannot be decreased.

Maybe loan #3 should be deemed also since it is not a permissable loan.

Thank you very much. Earl

Employer has DB plan that doesn't cover all the employees. It is Top Heavy. One of the excluded employees participates in a second Safe Harbor 401(k) Plan. Is the Top Heavy minimum for this employee bumped up from the 3%? (to 4% minimum?) Thank you

Not if he is THE highest paid employee. How about reducing his comp so that he is an NHCE, then the plan could be amended to be cross tested and he could be in his own allocation group. Once he is an NHCE the company could fund his full reduced comp amount and then some as a Profit Sharing contribution. Just watch out for writing this down because it is actually a cash or deferred election.

Thank you. I appreciate your comments on this. Earl [Your welcome-gsl]

Fiscal Year employer (3/31). Has had a SIMPLE Plan for a few years, wants to start a DB Plan for this year end, 3/31/04. As I understand it a SIMPLE plan has to be a calendar year plan. The ER contributions made for the year ending December 31, 2003 should not be an issue - could remain in the SIMPLE. Would they count against the 404 limit for the year ending 03/31/04? Would plan have to be effective 01/01/04 for this to be true? And thus short year issues arise... Otherwise, deferrals & ER contributions since 4/1/03 would be invalidated? Or since 01/01/03? If the SIMPLE is "invalidated" I think I read that the deferrals and ER contribs are included in Box 1 of W-2. So new 2003 W-2s are needed? Grossed up by the 2003 ER contributions... And 2003 contribs must be withdrawn by April 15, 2004? (408(d)(4)) And the Jan/Feb/March 2004 contributions would have to be withdrawn by the employees as under 408(d)(4) by April 15, 2005. If done so there would be no 6%, 10% or 25% penalty. (No penalty). Correct? As the SIMPLE is "invalidated" so does that mean that the ER would not be required to make the ER contribution for 2004? Although at one time there was an announcement commiting him to the contris. Thanks for wading through this and any comments... Search did yield: COMMENTS

thanks - I was referring to the mandatory not the waive-able 10%. I need to be more precise. (I have the book on cd but can't figure out how to do a search in it.... kind of frustrating...)

and, so it seems, since there is no spouse a rollover is not an option so no withholding applies. Thanks

wheew