k man

the employer is using insurance. the plan is basically an unfunded SERP, there is no rabbi trust (or any trust for that matter), and the accounts are not vested until 10 years. the employer is using life insurance and the investment returns have been less than the account balances should be. is it possible to amend the plan in order to change the benefit due each participant? the plan seems to allow for this. i was thinking however there might be some contractual obligation and that the employee would have to agree to a lesser benefit. any thoughts?

we have tons of plans where we exclude based on job classification. this one does not fit into that kind of format.

i think your citation to the regs might be incorrect. i dont see a subpart (e). but does it have the same effect as an age and service. they would be permitted to participate if they were secretarys or paralegals. just lawyers have to be employed for 5 years.

can an employer exclude employees from plan based on duration of service. for example the employer wants to allow only lawyers with the firm for 5 years to participate in the plan. the eligibility will not be 5 years. just for this class they cant participate unless they have a certain seniority.

I have DB plan that drafted by someone else that was not amended for EGTRRA. Would it be permissable to simply adopt the amendments the IRS issued as good faith amendments in 2001-57? There is no way i would be able to amend the plan properly since it is customized. The plan is terminating and it needs to be in compliance.

would all LLC income be considered dividend income? i know it would get reported on a K1.

We have a client, presently a citizen of Venezuela. He has applied for U.S./Puerto Rico citizenship, and is waiting and working on that process. He resides in Puerto Rico (over 2 years), and is treated as a Puerto Rico resident for tax purposes. He is the sole owner of an LLC (disregarded entity, he files Sch C) that is a member of a Fl LLC, located in florida. He does work for business in its Puerto Rico office. The LLC is profitable, and he draws a salary from the LLC as well. Thus, I believe he is paying Puerto Rico taxes on his salary, and U.S. taxes on his share of the LLC profits.

just putting this on the front page.

it is available on CCH. have you tried the irs website?

Is anyone aware of something in the Florida that says you must have the employees actual consent before taking any funds from payroll and putting them in a 401(k)? If it exists, I believe there would be a preemption issue but i still need to know. ps. i did see the earlier thread but it was fairly old and did not mention florida.

can anyone envision a plan design that incorporates a standard vesting schedule with normal retirment age as 65/5 and an additional provision that says all participants are vested at age 60 upon termination?

here are some more details. the plan is fully funded. actually now it is overfunded. there is one participant and the plan year end was 12/31.

it is a 401(k). that is the only plan they could have a matching contribution.

assuming a last day rule and 1000 hours, our plan document says the match must be allocated by the last day of the plan year. the question is when does the money actually have to be put into the plan?

they have to take the contribution back. the plan is terminating i believe. but i am trying to determine whether excise tax applies if you get the letter from the service. do you know?

basically the client simply made a significantly large contribution for no apparant reason. kind of bizarre but sometimes clients have a mind of their own. would i be correct to say that by going for the letter ruling you don't have to pay the excise tax?

Recently I heard that there was a case where a participant's widow was able to sue the trustees of a plan for losses her husband sustained in his directed brokerage account within his 401(k) Plan. I believe she prevailed. is anyone aware of this case?

we have a client that made a nondeductible contribution to his DB plan, well in excess of 25,000. the only way i can see to get the money out and avoid the excise tax is to follow rev proc. 90-49 and get a Private Letter Ruling. is this the only way to do this?

the code is pretty clear that the transition rule applies only to coverage when two companies merge but choose to run the plans separately. the rule does not apply to adp/acp. this may be a silly question but then do you have to aggregate the two plans for adp/acp test but not for coverage?

if the participant is from DC and receives a distribution from their 401(k), do you have to send a copy to the district of columbia?

i agree, they are still included in coverage testing. so the bottom line is that the client org. needs to adopt the leasing company plan as a participating employer?

jaemmons, i think they are all employees of the leasing organization. i guess this is where it gets hairy because i am not sure about the specifics other than the fact that the employer's attorney (who is of no use) says that the employer is leasing all of his employees from the PEO.

let me summarize again Client - HCE's and some NHCE's participate in Profit Sharing Plan. Leasing Org - Client would like all NHCE's to be able participate in the K portion of the leasing company plan, including those that participate in the PS plan.

does the client org have to adopt the leasing co. plan or can the leased employees just participate in both? they dont want to offer a 401(k) because they will be top heavy and have to give a contribution to all employees.

this particular profit sharing plan carves out some employees. it passes the discrimination tests.