rcline46

An SAR goes to all PARTICIPANTS. This means participants at the end of the year. If no participants then who do you send it to??? We never do an SAR for a 5500 with a zero participant count at the end of the year.

ERISA and 125 plans are essentially not related. There is a separate requirement under the 125 (and related code sections) to communicate the plan(s) to the employees. To make life easy this communication is called a Summary Plan Description.

It is my opinion that it is 25 loans per year. This ties into the question on the 5500 which asked if an extension of credit (loan) was made to HCE in current year. We only answer yes if a new loan has been issued.

Consider the normal ABPT rules - you do not include anyone who has not met the eligibility rules, the maximum of which is 21/1, dual entry. The caution on the 2 year eligbility is watching for the entry date. Elapsed time rules would give you an earlier entry date (usually) than Year of Service rules. BUt suppose someone is hired Jun 1, 2000. Their entry date is Jan 1, 2002 because they have completed two plan years in which they worked 1000 hours. If they terminated Apr 20, 2002 they would have 500 hours in and need to be in the ABPT. Yet they had not actually completed 2 years of employment. That is how I understand the rules.

The problem here is lack of knowledge of UK laws. That said there are usually certain items that are applicable: 1. Full disclosure of assets by both parties - if assets were concealed the the property agreement is based on fraud and can be reopened. 2. Malpractice claim against your solicitor for not pursuing your request. The big problem here is that you did not terminate your solictor when he/she refused your request. 3. FIle for a DRO to become a QDRO against the plan even though the divorce is over. Claim that asset was never covered in the property settlement. File in the US of course. Note that most plans are written that the spouse is automatic beneficiary. Unless there is a claim that is paid elsewhere then there is no claim on your part that you were not the beneficiary. The instant you divorced you were no longer a beneficiary.

415(B)(2)(E)(v) - added mortality to the adjustments. This is explained in the preambles to 98-1, so 98-1 is effectively the regs interpreting 415(B) adjustments.

I don't think earnings are ever excess assets, let alone trying to divert funds from a DB plan to another account. Only benefits could possibly be moved. After all benefits are paid you might have excess assets, but not before.

Our friends at the IRS have issued statements about 'springing' cash values. You need to use the interpolated terminal reserve values.

Maximum annual additions are $40,000 or 100% of pay, whichever is less. So 401(k) plus any PSP cannot exceed $40,000. If over 50 and maximum 401(k) put in, another $1,000 (but not in excess of 100% of pay) can be contributed. The article is wrong.

My opinion is yes with a caution - much testing refers to the 500 hour rule, so if you end up crosstesting / using the ABPT then they are counted as zeros. For the 'normal' 70% test they would not be counted

You got it right. Always something in transition times.

In 2002, yes. In 2001 - maybe. If the 3% is on comp while a participant, and participation may start any time in addition to the first day of the year, the you also need a 3% T/H contribution on that pay while NOT a participant.

No problem. The amendment changing the plan year changes the MPPP formula to -0-. The same amendment can set the formula back for the next normal year. Don't worry, be happy!

First, make sure your plans are coordinated so that TH is not required to be given in BOTH plans. Second, you must give the 3% to the non-PSP ees in the ESOP. TH is required, under most allocation schemes, to be given first. Then if any of the $1000 is left, allocated generally to OTHER participants in ESOP (up to 3%, etc). If $1000 not enough then er must deposit enough to make the 3% for the three.

Stevea - how did the $ get distributed without a signed form? As a TPA, we will not permit any liquidations until we have signed paperwork. Of course we cannot stop a client from bypassing us. Was a broker involved who just liquidated and sent the money without trusttee orders? Then you have yet another party involved! Also, as a loan, it is still in the account balance, so it cannot be 'hidden' from the spouse anyway.

Lets take simple answer. EE committed fraud. Trustee files suit for fraud against ee. Otherwise plan has problems due to impermissable distribution. Also if amount is over $5000, required spouse signature if annuity options in the plan. Possibly if no annuity options not required but I have never checked that out.

Matching problem - Effective date of change should be prospective, not retroactive. If your company is going to honor the match anyway, then there is no problem. In fact, since it is intended, why not do it NOW! SHort year amendment should be done before the end of the short year. Otherwise there are some IRS rules which get triggered. It is normally done during the short year or possibly immediately prior to the beginning of the short year. There should be a business reason to change years. Otherwise the IRS frowns on changing years to accelerate implementation of law changes.

Best way is daily balance. TO do this multiply each balance by the days left in the period. IE for a quarterly val - opening balance times 90 (or 91 or whatever) plus first deposit in period by days left plus.... This gives denominator. Numerator is total earnings over the period. Result times 365 gives rate.

Regs definitely say you cannot use it for 401(l) which is integration.

To determine reasonableness, we need to know: Is this a daily valued plan or not - if not then a distribution would have to wait until the 6/30 valuation (or whatever valuation date necessary) was completed. Also need to wait until last deferral had cleared. So if a quarterly valued plan, and your last deferral did not reach the plan until after June 30th, and payouts are after succeeding valuation, you would not be paid until after 9/30! Even in a daily valued plan, distribution would not be until after last deferral had cleared or longer. Putnam for example will not release deposited funds until 2 weeks after deposit. So, monthly payroll submission, sent in sometime early July, cleared say July 15th, two week 'hold' at mutual fund, earliest distribution would be beginning of August, a delay in submitting forms for payment, early September, market closed ...

You need to obtain a copy of the trust agreement or trustee section of the new plan document. If your plan is self-directed and a 404© plan (see the document) then there are special limits to your liabilities and responsibilities.

I think you cannot do a match! First, you are using the 3% non-elective safe harbor, not a matching safe harbor. Therefore your match must pass the ACP test, and in your example, with no NCEs having a match it will fail. However, if the match is announced, it is possible that some of the NCEs will contribute and some match may be possible.

Definition of comp important. Say doc says max def is 15% of pay, and pay is while participant. 10,500 divided by .15 gives final 3 month comp of 70000. But if short year (NOT A GOOD IDEA) then comp must be 170000/4 or 42500 so hces could not contribute max. Line up you ducks properly and it will be ok. Mess it up and you have a non-qualified plan.

In 2002 yes, this year depends on type of company.

Yup, instructions say so.