rcline46

The employer is SOL. There was no plan exclusion for illegail aliens, so they are plan participants. Tracking them may be fun, but REQUIRED. The standard exclusion of aliens w/o US income does not apply. Oh, bad SSNs? Makes life even more fund. Get their money with earnings to them BEFORE they are deported since they have terminated employment.

401(a)(26) not a problem, can have separate plans if he so desires. Must watch CG/ ASG problems and BRFs with multiple plans. How can he set up a 'new' 401(k) when he does not yet own the company for the company. If he is buying ownership then he is buying the existing plan.

Legally not a problem, not even a BRF problem because years of service can be ignored under BRF. Only problem then is passing the ACP test. IMHO.

First make sure plan is top heavy recognizing all prior plan distributions for the 98, 97,96, 95, 94 plan years. Also make sure Key employees properly identified. If all is ok, then send letter to client, copy their atty and acct of failure to deposit and likelihood of plan disqualification if not deposited. If client refuses, send certified mail terminating client, detailing reasons and return any used payments.

First, no plan is ever required to had a determination letter, so there may not be one. Second, during the RAP, any new plan may not have applied for a letter. Third, there is no consequence to the recipient plan should the monies not come from a 'qualified' plan. We send the document pages stating the plan is intended to be qualified under 401(a) and have not had problems. You need to quote the final regs to the recipient plan to get them to be reasonable.

Privately held corps - Stock must be valued by recognized authority in valuing such companies, documents drafted just like any other 401(a) plan with all the special ESOP language and decisions made on put orders (corp, ESOP, corp, other shareholders, etc). Stock must be valued each year. Recordkeeping system must keep track of cost basis of each contribution. Just your run of the mill, normal monster headache plan. Public corps - need some sort of SEC registration for ESOP purchasing the stock. Stock is market valued. Otherwise just more of the same as above.

If the participants are going into another plan with another company (or this company) they could roll the loans to their new plan. If there is no new plan, the loans are distributed and taxes are due.

WIth immediate eligibility you must hand the employee enrollment materials their first day of work, get them to sign for the materials in case of slow return, and permit deferrals no later than the second pay after employment. Specific regulations? I don't believe so, but under audit the IRS will want to see what you did, and I don't think anything else will pass muster.

Welcome to the dark hole. If you had put the participant on an SS4 and removed him, the getting prior 5500s from the IRS might prove payment. How were payments made? Maybe the bank will have checks on micro fiche. Was a 1099 issued? The IRS should have copies of 1099s from back then. You could also have participant get copies of his 1040s if he took it in cash. He should have reported anyway. I would take the position that it is up to the participant to prove he did not get it by providing tax returns. Does the company have any files left? Finally, let him sue. It would have to be in Federal Court.

401(k) limit is 10,500 personally, totally. He cannot fund a SIMPLE to 6000 and 401(k) to 10,500. 401(k) must be cut back. If all three are unrelated, he can get maximum $30000 / 25% of pay in each. It is 401(k) that is reduced.

As much as I searched on the RIA CD-ROM, I could not find anything relating to rollovers of governmental thrift plans. Where is the reference?

First, you must know what the optional forms of benefit are in the plan. If the distribution is under $5000 then no spousal consent is required (normally) in any plan. If it is a Profit Sharing / 401(k) plan, and the normal form is joint and survivor, you are probably out of luck. If the plan is written properly, a lump sum does not require spousal consent even if j & s is an option. Consent is required only if another annuity option is required. Determining all of this could take longer than getting consent!

Nice try. Right up there with having participants pay to get their benefits from the plan. You cannot treat plan participants differently. Tell the sponsor to either get them paid out (force out under $5000) or bite the bullet.

Plan assets are the responsibility of the DoL. They have defined broadly settlor (sponsor) items and plan items, such as qualification. Look to the infamous Maldonado letter for details (DoL option letters.)

From the 1999 ASPA convention, question 76. There are two answers. If you are using permissive disaggregation, that is splitting the plan into two plans for testing, then you can use the 21/1year/dual entry requirements. If you are using the new rule effective in 1999 which allows you to only exclude NCEs who have not reached 21/1year then you must use the entry dates as specified in the plan.

A plan qualified under 401 can only take rollover money from another plan qualified uner 401, even if through a conduit IRA. Federal plans are not qualified under 401 so the answer is NO.

OOOOOOOHHHHH, you gots a BBBBBIIIIIIIGGGGGGGG problem there! Or rather your client does! No problem with the 412 plans. And you are correct on the profit sharing side only allowing 5% (in your example) for 2000. If the plan conditions the contribution on being deductible, you might get it back! Otherwise, not deductible going in, excise taxes every year as long as it remains non-deductible, and taxable when coming out. Note, they may NEVER (but be careful - maybe can) be able to deduct, but the funds could be DEDUCTIBLE!

New regs say if optional forms in a profit sharining/401k plan include installments and or annuity options, they can be removed with a 90 day notice PROVIDED the plan otherwise meets the tests which permit lump sum only benefits.

THe treasury is supposed to have sent proposed regs to the Federal Register, effective in 2002, concerning cross-testing. What they are no one knows. I bet they just get more complicated.

Minimum funding under 412 trumps 404. I think it is all deductible in the year it is all caught up.

If it were a PBGC plan, code 1H helps you. I 5 a is a clue to the IRS, and non- attachment of the B is a good sign. Skip part II of the R since not subject to 412. Don't worry, be happy!

We are amending all plans eligible to remove the annuity options. Many will be done with the GUST II restatement. We are providing an SMM or SPD with the removal.

If there is proof that the bank failed to act and had enough time to act, the bank is liable for lost deductions and the excise taxes if this is a 412 plan. On the other hand, there exist PLRs which state in a brokerage acount,if the order to make a transaction is given, it is considered executed that day even if it does not happen until a later date. We won an IRS audit on a 412 plan for a client with that rule. If the order to the bank can be proven, I would take the position it happened. If the IRS audits and disagrees, see paragraph 1.

I have been in employee benefits working for a TPA for over 25 years. We have ALWAYS considered anyone working on the last workday of a year as being employed on the last day of the plan year. There is no known legal interpretation or regulation addressing the situation.

If you are terminated and can prove your 'allegation' that the company is trying to terminate older employees then you are in luck. It would be costly and a long process. otherwise without termination it would be very difficult to prove you are being affected by discrimination.