rcline46

Make your groups divisions in q, then allocate by division. Don't forget to do your testing!

I know someone who's opinion is that use of a Standardized Prototype is tantamount to malpractice. Not all SPs are created equal and some that I have seen allow setting of the deferral % limit. Contributions may be hinged on deductibility, but that is a document issue. Generally, excise tax is the answer.

Half tongue in cheek reply - Pay the excise tax, reduce deferrals in next year to 'recoup' the overage, and sue the plan designer for malpractice. No competent designer would put in a Safe Harbor plan with 20% deferrals especially if other contributions were heavy.

Your source if information is WRONG, WRONG, WRONG. Strong message to follow! The 402 limit is 10,500, the 415 limit is 25% of pay, and the document limit is??? percent of pay. So you get to contribute the lessor of 25% of pay which means 10,500 at $42000 of pay not 85000, the percent specified in the document - usually 15% of pay which is 10,500 at $70,000, or the 402 limit (10,500) so at $170000 of pay it is only 6.176% of pay. If you are Highly COmpensated (making over 85k in 2000) you get these same limits. However, the the non-highly compensated (NCEs) average deferrals is not great enough, the HCE may have to have deferrrals returned due to failure of the 401(k) ADP test. You or your source need to 'bone up' on the testing rules.

Always be careful, but... If the retirement benefit will be more that the TH benefit, the most you will do raise the CLAB FFL slightly at the end of the year (next year will bump up automatically). If you are in FFL, the cost will rise a little. Changes in GATT lump sum values will be more dramatic, as will compensation changes. Also, we do TH on participation and participation comps while normal benefit is on real comps and service, so the difference isn't that great.

The only thing important is the BENEFIT. That must be fixed back to whenever. Funding? its all assumptions with limits on the up side. If you were into FFL before discovering TH, then the FFL would / could change (OBRA FFL most likely). I would not go back to fix funding, let it fix 'naturally' by having the correct current benefits. Projecting TH is an assumption. Do as you please.

OHHHHH David, are you sitting down? The 401(k) must be part of your crosstesting. So you will need deferrals, match, safe harbor contributions. If you are using accrued to date you will need 401(k) balances. Of course the 404 15% limit you know (gross pay less deferrals less 125 etc) times 15%, reduce by 401(k) to get your PSP amount. The Safe Harbor if 3% can be used in cross testing as long as integration is not imputed on it. This means a spread sheet to add different pieces together - 401(K) plus SH plus (PSP with integration) for ABPT, drop the 401k but keep SH for rate group test. And you are getting what to do the cross tested plan? Better increase it!

You have to follow the attribution rules and any community property rules. If they are adopted, then they are treated the same as naturual children. If spouse owns >5% directly or due to community property then the step children are HCEs. Best to read the attribution regs, not some condensed version.

WIth the freeze amendment (or later with a separate amendment) you can freeze participation also. Since TH accruals are technically not benefitting, you escape the 401(a)(26) rules on minimum participation. You still need to keep up to date with all amendments, and make sure the restatement also keeps the plan frozen.

Short answer - yes. Long answer - no, but then there is a REQUIREMENT to submit the amendment to the IRS for approval with full disclosure as to why the short plan year, and they will be checking your document for all of the fun short year / limitation year stuff. WIth the delays in getting approvals today, you probably won't be able to file the 5500 before the (extended) due date!

Are you forgetting the top 20% rule? 20% of 15 is 3, therefore you only have 3 HCEs. SHould pass all testing without problems. DOne many this way.

COmpany or partnership? In any event use the service and pay. I did that for a group of 4 who went individual, counted service and pay back. IRS audited two of the plans (Defined Benefit) - no problems. Just identify predecessor entity in document. Fun part is you get a whole new 415 limit since not a controlled group!

This is fun. First, your document probably has something like a '415 Excess Account' in it. Look for it, read it. Very enlightning. Second, the deferrals were in first, so you cannot refund the deferrals. THird, your document may require excesses over 415 to be reallocated to other participants, so one employee almost never actually exceeds 415 (unless there is a MPPP hiding). Fourth - 404 and 415 have a tenuous relationship at best. Essentially 404 is the sum of the 415 limits for all eligible employees. Just because the ALLOCATION to ONE employee exceeds that employee's 415 does not mean the TOTAL contribution exceeds the 404 limits. Always think this way - Allocations, contributions, and deductions ARE JUST NOT RELATED TO EACH OTHER. It makes your life easier.

Exactly what will the investment manager do when you order a distribution on an under $40 (that seems a bit high) account? If the trustee gives the order, or the participant requests distribution, the investment manager must act, or I would report them to the DOL and/or IRS. Second option is to 'distribute' all of the money to a local cash account (bank account) in the plan name and then write checks from the bank account. Recordkeep the distributions from the investment account.

Obviously you need an attorney here. However, if the contest used the word employee anywhere, and you are not an employee at the time the trip is taken then.... If you are that upset, get a lawyer and provide him / her with all the information on the contest /trip you can. But don't get your hopes too high. Bet your (former) employer has 'been there, done that' and has a pat answer.

My understanding of the rules is that he cannot start the Money Purchase plan until 4/1/01. The concept is that for any FISCAL year in which you have a SIMPLE plan, you cannot have another plan which benefits the same employees. Therefore, since at some time in FISCAL 3/31/01 there existed the SIMPLE IRA, the employer cannot then have any other plan.

Unless you or someone in your organization are VERY experienced in ORACLE and server operations, send it to CORBEL because something will go wrong. Let it be CORBELs problem, not yours.

In my humble, non-attorney opinion - GET RID ON ANYTHING THAT OVERTLY USES AGES! Use -11(g) amendments to pass the tests, even if you think are deducted in the next year.

First check the in service distributions. The Corbel document has pre retirement as in service and a separate permission for post NRA distributions. I cannot speak to other documents, but it is a place to be 'saved'. Check for things like Annuity Starting Date which is almost like NRA but for this participant has been 'postponed'. Second, if the first fails, you have a calculation error which created the supposedly larger distribution, but not in excess of account balance! I would forget about it an go forward.

Several items - must be netscape 4.x, java script enabled, SSL 1 & 2 set, DOES NOT WORK WITN WIN 2000!!!! Explorer 5.x seems to work better.

Read the loan contract itself. I have not seen one where it can be 'called'. Some have provisions for termination of employment or lack meeting payment schedule, but not by sole action of PA. Plan termination means one of parties is gone, and the note is not 'called', it is distributed along with other assets.

It would be very unusual for a first year physician to be an HCE (earn over 80/85k in prior year) so first level may not be attainable! Second you state the formula IS, then you state the Drs. are asked about contributions. A conflict here. Otherwise, it seems fine.

Using the 401(k) rule, the EMPLOYEE tells which entity to return the money. I would doubt the 403(B) rules would be different. Of course, not being a 403b expert....

You must look to the definition of compensation. Pension plan income would look like passive income. Under compensation you are looking for income in respect of services rendered, and pension distributions would not qualify.

Unless he tries to use SLOB rules, it is a controlled group. However, 60% ownership in th B-I-L corp does NOT make a controlled group (80% test, Vogel fertilizer). Only the original sole prop and 2 corps.