thepensionmaven

We recently took over a 401(K) plan and the definition of compensation is W-2 Gross (Box 5). The client also sponsors a Section 125 plan. The previous TPA was using W-2 box 5. The plan document states that the ADP/ACP tests shall be based on Gross W-2 w/o reduction for employee deferrals or employee contributions to a 125 plan. Client wants to reduce W-2 by contribution to the 125 plan. Would this be OK??

Anyone have any sample amendments to allow for an "in-service" distribution from a pension plan at age 62?

I believe that in order to have in service distributions at age 62, the plan's definition of Normal Retirement Age must be at least age 62. Anyone have any sample amendments??

Do you need to run the General Test under 401(a)(4) for an Age Weighted profit sharing plan?

Yes, thanks. Changing the eligibility sounds great, but the eligibility is 1 year, so I don't think so. Also, the PS allocation is New Comparability, I don't think the plan will pass the general test if we exclude the participant.

Yes, thanks.

Yes, please.

If the participant worked 1000 hours in 07, went on maternity leave in 08, came back and worked less than 500 hours in 08, she does not get any employER contribution, but must get the 3% safe harbor. She does not get a profit sharing contribution because she did not work 1000 hours. How does the plan pass coverage or would you just exclude her from the profit sharing contribution, and, on what basis?

Perhaps, you can modify the attached Thank you.

Anyone have any AFTAP letters which the participant is supposed to receive if the plan's AFTAP is <60%?? Would appreciate a copy. steve@thepensionmaven.com

Need help calculating contribution for second year of plan.

Could I have that link please? steve@thepensionmaven.com

Standard termination. Appropriate "non-Discrimatory Reallocation of Assets" signed by each principal prior to the termination date.

This is a plan we're terminating because the Company was sold. There are 4 equal shareholders. The plan is underfunded unless these principals waive their benefits, or unless their is a "non-descriminatory re-allocation of benefits on behalf of the owner-participants such that plan assets equal plan liabilities." The plan has been filed with PBGC for termination, no intent as yet to file with IRS. It is my understanding, having dealt with PBGC before on this, that they consider a "substantial owner" as one who owns by attribution or otherwise, more than 10%.

I've got a DB plan with 4 owners who each own 25%.

Which principals can waive benefits upon plan termination? Do they have to own a certain percentage of stock in the company?

Question has come up regarding insurance in a defined benefit plan. Product being sold is whole life with renewable term rider. Based on the insurance formula, the policies for the rank and file do not qualify for the RTR rider, but face amounts for the owners obviously do qualify. Would this be construed as discriminatory?

That is why the older doctor wants to go with as DB. He had one several years ago as a sole proprietor and foolishly terminated it. Thanks.

Prospect currently maintains a profit sharing plan for two doctors and their spouses, no common law employees. One of the doctors wants to initiate a defined benefit plan, the younger doctor does not wish to participate, and wants to contribute to the profit sharing plan. I assume since these are all HCEs there is no problem setting up a DB for one owner and his wife and setting eligibility to exclude the other doctor and his wife.

Thank you very much.

Thank you for the answer. Is there particular case law or a cite you could point to?

I am in the process of terminating a DB plan, accruals have been frozen, notices have been sent out but we have not yet filed with PBGC. One of the principals has retired, wants to take his RMD and rol over the balance to an IRA. Can he do this prior to filing with PBGC? Interstingly enough, I called PBGC, spoke to one of their staff attorneys, and he has not been able to give me an answer.

If the 8 1/2 months ends on a Saturday (in this case 9/15/07), doesn't the client's check have to be dated 9/15 and if he dates his check 9/17, he's OK for deduction purposes but not minimum funding?

Business is business. Send them to us. Steve

I'm looking for a pension study group in the New York-Westchester-Southern Connecticut area. Any leads would be helpful. Thanks, Steve