DP

We have a client who recently terminated his Simple Plan. The funds were invested in a life insurance annuity, and all participants except one chose to leave their account balances with the insurance company. The lone participant who asked for a taxable distribution was paid out. Now we are working on their corporate tax return and find that the employer still owes some match contributions to the Simple Plan. The insurance company refuses to take the match contribution for the employee who took a taxable distribution since her account balance has been paid out and the plan was terminated. What is the proper way to get this match contribution paid out as a taxable distribution to the employee?

When calculating the 15% contribution limit, can forfeitures first be deducted from the total contribution and then 15% be contributed? For example, 15% of eligible compensation is $50,000. Forfeitures of $1,000 can be used to reduce the contribution. Can I calculate a total contribution of $51,000 so the actual contribution being deposited ($50,000) does not exceed the deduction limit? Thanks.

I have a 401k plan that consists of deferrals and employer match only. The plan became top heavy during FYE 5/31/00. Does the employer have to make a 3% non-elective contribution to all eligible employees for the 5/31/01 plan year? If the plan adopts a Safe-Harbor formula for FYE 5/31/01, can this 3% top heavy contribution also be used to safisfy the 3% Safe-Harbor non-elective contribution?

We have a 3-employee group where the father is the sole proprietor. The other employees are his HCE son and a secretary who works less than 1000 hours a year. The father wants to start a 401k this week, effective 1/1/99 so he can defer $10,000 for 1999. There is only one pay date left for the son during 1999. Can this be done this late in the year, or is it discriminatory to the son?

We have an employee who was eligible to begin deferrals on 1/1/99. She was not given election forms until 11/23/99. What is the corporation's responsibility to make up her "lost" deferrals and match. What about earnings?

A client has an integrated MPP and a PS plan with a 6/30/99 FYE. The integrated MPP was merged into the PS as of 12/31/98, and the MPP was funded through 12/31/98 (no last day rule). Can the PS be amended to a cross-tested formula for FYE 6/30/99? I wasn't sure if the cross-tested PS plan falls into the same category as an integrated plan. I know you can't have two integrated plans in the same year.

If a practice has a Section 125 plan for health insurance only (employees pay 100% of premium), how much advance warning is required before the employer can cancel the plan?