rcline46

This method is known as 'elapsed time' vesting, perfectly legal, 1,000 hour rule is not applicable, point to point is. Anyone who is considered employed for the calendar year gets vesting credit regarless of number of hours.

Determining the best design would require a census of all of your employees, including yourself, total income available for benefits (ie, salary and K-1 income not required for your living expenses), future viability of your business and of course an idea of your risk tolerance. Many on this board can do an excellent job of designing a plan for your. However, no one wants to give away their hard won knowledge. Without some assurance that you would place your plan(s) with them, a fee may be involved for a study of your unique situation. You can use the email function to contact members privately. You can follow different threads for a while to see if you 'like' one or some people more than another. Locality may be important to you if you desire 'face' time. If this is so, let us know what region or even more specitic to a city would help.

If the promotors of the tax shelter don't have the guts to take a client in for at least a private letter ruling, then they should be avoided like the plague. The additional cost after getting an attorney to draft an opinion is minimal. Not doing so certainly exposes their greed at the very least.

You need to read both Rev Proc 2003-44 and the DOL Voluntary compliance program to determine the interest amount, proper amount on 5330, and how to avoid filing the 5330.

coverage is for employees, so the question is, was that person an employee in 2004? Pay amounts, types, etc are not relevant.

I concur. Here its the % that counts, and if you don't make it you fail.

Note that we are NOT questioning your abilities. However, the rules are very involved and literally take years of experience to handle properly. COmpliance in a 401(k) is very tricky, let alone rules on deferrals, eligibility, loans, hardships, reporting, etc. If you are the 'contact' person, kudos for trying to learn. If you are THE person for the plan without outside help, the company is making a big mistake. Qualified plans NEED professional oversight.

You should also talk with the firm who does the work on the plan. (TPA) If you do not have someone else doing the record keeping and compliance work..... Well your company is asking for nasty results from an IRS or DoL audit.

A plan for Domestics may be established, but there is no deduction permitted. That is because running a household is not a 'trade or business'.

Also need definition of 'Compensation'. Does it say 'while a participant in that portion of the plan', or does it say 'plan year' and nothing else. That will govern the measuring pay - whether from 5/1 or from 8/1. THen you see how the match is applied.

It should based on the rules of constructive receipt.

First you need to follow the terms of the loan note as to whether it is in default. If not in the note, the the DOL regs which say a loan is defaulted at the end of the quarter in which no payments are made. Then the trustee has the final say on extension of credit and at last a deemed distribution.

Corbel prototypes allow both a service and hrs requirement (ie (blank) hours in a (blank) period of service.

Just prorating the hours makes no sense to me in light of the fall back 1000 hours rule. You can make the hours 500 if you wish. But you still must use the 1000 hour/12 month fall back.

Ahhh Blinky, guess we had better ring up Sal? We disagree, but that's ok. Until a field agent decides to make an issue of it and we get a definitive ruling we can do our own thing. Observers can make up their own minds as to which interpretation to take. And of course if you depend soley on your software to do the testing....... YOU might be a redn.... er ..... surprised!

Did you check against the maximum 404 contribution? Remember that limit is up to (old) current liability, and use the low end of the range.

So where does the plan pay the expenses of drafting a QDRO??? The fee that may be passed on is only the PA's fee for REVIEWING the DRO to see if it is a QDRO. Only expenses of administration of the plan may be passed on, and drafting a DRO is certainly not an expense of the plan nor of the sponsor.

If the participant showed, then she is still local! How about putting an ad in the paper? Asking other participants? Calling the phone company? So many easy ways.

First, the IRS fee for a PLR is about $1750. Document prepartion would be presenting the book as is. And then your client would have his own PLR on the scheme. Second, your client should not proceed without proof the scheme has been approved by the IRS for someone! And the PLR for that someone is of public record. Taking an attorney's written opinion (if any, bet it's well caveated) is almost worthless. Why has the promoter been afraid to ask the IRS for a ruling? If it is so good you would think they would spend the time and money on it.

Folks, there is a simple resolution. FIle for a private letter ruling on the 'scheme' and what you want to accomplish. Only the IRS can give an answer. Then, if it IS 'fraudulent' the IRS has the power to go after the promoter and all his clients. Demand to see the IRS approval of the 'scheme' and if not forth coming demand it be filed.

Don't forget that upon termination all participants become 100% vested, so PVVAB is irrelevant. Also the document must discuss priorities on termination, and even though you do not have to file with the PBGC, bet the doc uses the same priorities.

Maybe so, maybe not too many have thought about it! However, there is no refutation of my position (ok, maybe I am stubborn!) of concurrent vs consecutive. Has anyone tried to get a explanation from Mr. Tripodi? Why has the IRS approved Standardized prototypes with this feature since under the design of the plan you cannot fail 401(b) by definition? But Mr. Tripodi's position is that you can fail. THis alone would indicate the IRS agrees with me on this situation.

I think Mr. Tripodi is using a too conservative interpretation. The reg and the examples are all of concurrent eligibilty. That is two plans or two groups in one plan with different eligibility. The situation described is consecutive eligibility. One on the first day of the year, and a second one from the second day forward. Anyone hired after the first day can in no circumstance (by changing groups or plans) acheive a different result. Therefore you do not have what is termed 'dual eligibility'. That is why it works in standardized prototypes. In my opinion of course.

If you amend a plan to now exclude union ees, are those already there in or out? And yes, how was the amendment drafted? Our docs specifically mention moving to an ineligible class so the doc anticipates such an amendment.

Isn't it strange. When the actuarial community was asked for comments when FAS 87 was being drafted, we told the board that the only valid measurement of the ABO was the termination liability. Now they are recognizing the fact that we were correct all along.