rcline46

For 1997, the employer made a fully deductible contribution to the plan of 3%. Not a problem, not 'correctible' since no error was made legally. 1999 is short on T/H. Make the contribution and allocate it based on 1999 figures. Of course, the T/H determination for 1997 was based on the 12/31/96 account balances, and for 1999 was based on the 12/31/98 account balances correctly, including payouts for the 96 (or 98) and 4 preceding years, right?

Jim and Dick said that but without substantiation as to WHY they did not like them. In fact the 5500's themselves provide rules as to how to divy up the assets, so de facto they are acceptable. Anyway, it is an asset issue and that is governed by th DOL anyway.

The real question is pay scale relative to the industry. Assume 10 days vacation, 10 holidays, so out of (365-104) or 261 days, you would work 241 days. Free time is 8.3% of working time (20/241) In your case you are working 52X4 or 208 days which means everyone has 53 days a year off (plus weekends). This is 25.5% of working time (53/208). You hav 33 days more off than the 'industry'. SO if your pay rate is x% more than average, you ARE being paid for vacations and holidays and sick time. The percentage could be figured as 241/208 or 16% more.

Buy stock or assets? What happened to existing plan a very critical item! Could have two plans going and would then merge plans, ees could be w/o a plan and have to resatisfy eligibility, agreement may have amended document for immediate eligibility or granted prior service. You need much more information to properly handle this. Mergers and Acquisitions are very tricky.

I will assume by total buyout, you mean asset purchase. Then there is NO past service unless specifically granted by plan amendment. Also means no controlled group. Under these assumptions, only pay since employed by A will count with full 415 limits. If the stock were purchased you have controlled group issues, full year pay, SEP and Qualified plan coordination and a boat load more. Such information is critical to your problem.

Did A buy stock or assets of B? If stock, did A retire stock or keep B essentially as a subsidiary? This is to determine when B's employees became A's employees for eligibility for the plan. Did A grant past service or immediate eligibility to B's employees? Plan amendment could have a lot to say on what is counted. Does plan say comp while a participant? Retroactive entry? You need to get all of the facts concerning how the B employees got into the A plan, and the rules in the A plan. Then it becomes easier.

MP and PS combine as one trust is fine. DO NOT combine with DB plan. DB has too many actuarial losses to get mixed up with PS/MP combo, and frequently investment objectives are different.

This is addressed in the plan document, and the IRS regulations on missing participants. You gotta find 'em!

It certainly can be do with a resolution. However you must first see what the eligibility to receive a match is - is it EOY, 1000 hours; 500 hours; eligible to defer? Next, is the resolution evergreen or self limiting? That is does it say 'for 1999 only' or just state the match amount? The problem is when the match is accrued! To avoid problems either the resolution must be done before the first of the plan year, or before any match is accrued which means Dec 30 if EOY 1000 hours is used. Otherwise you will have two different match rates during the year quite possibly unintentionally.

Yes, under 414(B) and 414(m) - all considered together for Top Heavy.

Multiple empoyer plan usually refers to union plans. Multi-employer other is what you will have If you are not in a controlled group / affiliated service group with the other company. Parent sub controlled group requires 80% or more ownership.

Over 100 at boy is audit material - show them the 5500 instructions! Have the party saying no quote YOU verse and chapter of why not.

John A - Standardized do include, Non-Standardized plans it depends on the the particular document - what was put in by the doc sponsor. As always - RTFD - read the fine document.

Did you check document to verify that TH only goes to non-Key to accomplish what you desired? I believe that since TH is mandatory, it is accrued and counts for 1999 no matter when deposited. As a note, if a 401(k) plan then a nice QNEC or QMAC in the proper amount (if HCE = KEY) which may be less than 3% is a nice way out of TH for first year, which then includes second year, and can be done after year end as you noted for the first year only.

The answer is a definite MAYBE! Prototype plans typically include automatically any members of the controlled group, so adoption by one corp includes the other. IRS requires this but there is a legal question as to how one corp can bind another corp! Volume Submitter and individually designed plans do not usually automatically include other members of controlled group, but if the plan would then fail 410 or 401, is it a qualified plan?

Merge and be happy. The merger date is effectively a termination date of the old plan, all testing should be to the merger date. On the survivor plan, treat the merged employees as new entrants on June 1st, test the plan with the new entrants at 12/31. Should not be a problem. Remember - a merger is a termination of the old plan. You are not maintaining two plans after the merger.

Don't forget that total deduction is limited to 25% of pay! That rule has not gone away.

Moe, why do you get an ASG? If C corp does not do anything for S corp, and vice versa, then there is no service between the organizations. Now if B was actually Bcorp...

Since you are exposed as a trustee if never removed and you never resigned, the file with the DOL. You are required to file as a fiduciary if you believe another fiduciary has done something wrong. Or, since SMM never distributed, the amendment is null and void, tell former employer that and demand contribution or you will report them to IRS and DOL. You might even collect a whistle blower reward!

File the SS4, signed by trustee. Use Teletin or fax the form in for faster service. THis is faster than getting a 2848 signed, fewer pages.

Any plan with over 100 participants requires an audit by an independent ACCOUNTANT. The clients accounting firm usually handles the audit or has a referral.

Dependent care is under IRC 125. Annual additions are under 415. Dependent care have nothing to do with annual additions under a qualified plan. However, since pay definition under 415 now include all deferrals under 401, 125, 403 and 457 the limit is greater than it was pre 1998. But it is pay definition, not annual additions that includes dependent care.

Not only do you have to pass ACP testing, but each level of match must pass BRF testing. It would appear that personal performance would increase one's level (or two or three) and when done, that level must pass - seems a bit complicated unless determined before year end.

Roberts Rules or ORder, just like any meeting. Keep accurate, detailed minutes. You may be challenged by any participant or fiduciary on your decisions. Actually the committee is a plan fiduciary so act as if you will have your a** sued off for anything.

Your document provider should provide as part of the document both a compliance kit and an administrative manual with all forms, if that is your question. If you question is what does an administrative committee do, then they handle the day to day operations of the plan in accord with the administrative kit.