jkharvey

Thank you! The pattern thing in 401(a)(4) regs was EXACTLY what I was looking for. I knew something was ringing a bell in my head about this.

Three guys start a new company in June. They don't hire any employees until July. They want to set up the plan to have effective date 6/1 w/ immediate entry if employed by 6/1. They will then amend the plan to require 1 year of service for entry. The amendment will be effective after 6/1 but before 7/1. What would prevent this from being ok? It just doesn't "feel" right.

There are no HCEs in this plan. The employer would like to base match on participant's age. The match will actually be greater as the participant gets older. Can we do this?

What, if any, amendments are needed by the Plan and by the separate employers that are no longer going to adopt the multiple employer plan? I'm thinking a resolution by the employers leaving would be sufficient? Would it even need to be a corporate resolution?

I don't think I was very clear and I apologize. The document clearly says that contributions are allocated comp to comp. My question comes in as to how to allocate the stock that is purchased with the cash that is contributed as the contribution.

The Plan Document says that the company stock account of each participant shall be credited as of each anniversary date w/ the Particiapnt's allocable share of Co. Stock purchased and paid for by the Plan. This is not a leveraged ESOP. My question involves the definition of "allocable share". Suppose the ER makes a cash contribution of 150,000 that is allocated based on comp to comp. Let's say that the ER purchases $150,000 of ER stock. Do I allocate the stock to the Participants in the same manner as the ER contribution that year or is it based on the ending balance of ER accounts?

An individual was a partner in a partnership that maintained a 401k plan. The individual leaves the partnership in 2004 and establishes his own Sole Prop. The Sole Prop adopts its own 401k plan. Can I count as compensation for the Sole Prop plan purposes the Schedule C and the partnership income allocated to this individual?

If you do, would you be willing to let me ask you some specific questions off the board? TIA

I'm new to administering ESOPs and I have a general question. The ESOP has investments in mutual funds and some GNMA bonds. I'm wondering when it comes to allocating earnings on these non ER stock is the allocation made on a participant's total account including the ER Stock or account minus the ER Stock? I'm going to read the document carefully to see if it specifically addresses this but thought someone who administers these on a regular basis could give me some guidance.

Tom, Thank you so much for that link. I searched the DOL website but didn't find that. May I ask what your "secret" is to searching for things at DOL?

Client received a call from DOL saying that since they answered the F5500 "no" with regards to fidelity bond coverage we are wondering what DOL will do if they actually come out to "audit" the plan. Does anyone have experience w/ DOL and this type of failure? I'm not concerned about IRS, just DOL. Thanks

Self employed doctor in city A sells his clients and moves his practice to another city. Dr. sponsors a 401k plan. Can the dr simply terminate the employees in city A (creates a partial plan termination) and when he moves to city B and sets up practice use this same plan with provisions for employees he hires?

I log into my company computer system from home using a remote desktop connection. I am able to log onto Relius Admin and Govt. Forms without any trouble but I have problems with Relius Documents. I was wondering if anyone else logs into Relius this way and would be willing to answer some questions.

When I searched the message board archives I found a discussion on this topic that dated back to 2003 and 2002. There was some talk about a comment made by the IRS at an ASPA conference (2002 conference) that indicated the contr. receivable should NOT be removed from participant account balances when determining top heavy status. This position, however, appeared to be contrary to the Regulations at 416. I was wondering if there is any more recent discussion on the matter. Are most administrators removing the receivable from the end of year balance when determining if a plan is top heavy or are you leaving it in the balance? I know that this issue only pertains to plans not subject to minimum funding (412) or to first year of a plan.

The client terminated the MPPP two years ago and has been working to distribute all of the assets. Well, all assets were distributed early in 2005. Part of these assets were life ins. policies. It seems now that the Ins. Co. that provided these policies went through some kind of sale and has notified our client that additional money will be coming as a result of the ins. company sale. They can't tell us, however, how much it will be and when it will come. My question is whether or not the Trust has to keep the MM account open with the broker. It seems to me that if the INs. company issues checks in the name of the trust at some point in the future, the trust will need someway to deposit and then distribute these amounts. Suggestions?

I'm wondering if this is happening at all. THanks.

I'm not looking for any "secrets" or "proprietary" information. I'm just hoping to get some suggestions to help me better handle the SH notice situation in our office. If a new client wants to establish a SH 401k plan and you start discussions w/ them in middle of December, let's say how do you handle the new plan? Let's say you aren't able to get the client to commit to the 401k SH until early in January. Obviously they can't start deferrals until they decide to do a plan. Do you draft a plan document that is effective 1/1/2005 (let's pretend it is 2005) with SH provisions effective 1/1/2005 or do you date the sh 401k provisions later into the year? When do you give the notice? I was under the impression it had to be given 30 days BEFORE deferrals started. My boss says we have up to 60 days AFTER to give notice. I'd like to exchange info with anyone willing to discuss the topic.

That's my problem, I don't think there is a basis for removing the money. I was hoping that someone else might come up with one...lol

The Employer deposited $125,000 in excess of the 415 limits into the ESOP a couple of years ago. This amount was never deducted on the Corporate 1120 and was never "allocated" to participants. It is just sitting in the ESOP. This is excess contribution subject to 10% excise tax, correct? Also, can the ER remove this money?

I am not planning to recommend that they hold off on making the deposit. I'm not sure, however, when they actually plan to make it. If they aren't going to make it in the next few months, this issue about whether or not the deferrals even count toward ADP may be valid.

Good point Mr. Butler. I need to find out when they expect to make the deposit. The whole thing is a mess which is crazy since it's such a small amount and they now are terminating. Bankruptcy, divorce and the works.

No, plan is a corporation. I called the DOL and they were MOST unhelpful. Actually, I thought the guy was rude. He did tell me that the owner would be treated as any other participant other wise it could be discriminatory. I didn't understand that one. Anyhow, I really just wanted the ER to treat this amount (it's only $1400.00) as never having been a deferral in the first place. Amend the W-2 and related filings. They don't want to do this for some reason. To make matters even more interesting, they fail ADP and have to return part of this amount that was never even deposited.

The only deferrals not deposited were those of the HCE. Anyone know if DOL looks "more favorably" on this type of late deferral than one where all deferrals are not deposited timely?

I understand that elective deferrals are not made from severance pay that is paid to an employee after the date of termination. My question is related to the 3% nonelective SH contribution. The Plan defines compensation as W-2 wages. The severance pay is included in W-2. Does the severance pay that is paid after the employee terminates count when determining the 3% SH contribution?

I need to learn more about ESOPs and administering ESOPs. Can anyone recommend some course material and/or reference books?