k man

when her son is 5% owner do 318 attribution rules apply?

the code only requires you to get a valuation if there has been a transaction involving the stock. the only question question on Form 5500 asks whether the plan purchased or received any nonpublicly traded securities that were not appraised by an independent third-party appraiser. i dont think you need to get an independent appraisal.

does a plan sponsor need IRS approval to amend a plan 91 days after a determination letter is issued to retrocactively correct a disqualifying provision?

pax, thanks. i discovered the reg after i posted.

the sponsor got an independent appraisal last year and the value of the stock was 0. they are not doing any transactions ie. buying or selling stock. are they required to obtain a valuation each year. i don't see a valuation requirement in erisa unless you are buying or selling the stock.

would an amendment removing the deferral feature from a 401(k) be an impermissable cutback of benefits?

i submit a schedule q along with a demonstration 6 (general test) for the reason mentioned by lynn campbell. i think getting a letter on the methodology of the cross testing could be of some value in the future. particularly with no user fee for most plans it would seem to be a good move.

98-1 discussed the first plan year and states that if a plan (other than a successor plan) uses the prior year testing method and for its first plan year the plan determines the ADP or ACP for NHCEs for the prior plan year using the ADP or ACP for NHCEs for that first plan year (in lieu of 3%), then the use of the prior year testing method in the next testing year is not treated as a change in testing method. my plan has checked off current year election for the first year. However, they will be using 401(k)(3)(E) which provides that, for the first plan year of any plan (other than a successor plan) that uses the prior year testing method, the ADP for NHCEs for the prior year is 3%, or, if the employer elects, is the ADP for NHCEs for that first plan year. in the second year they will use current year testing. am i operating correctly under 98-1 or should my plan have elected the prior year method for year 1 to be consistant?

it seems to me an investment advisor could be responsible for a portion of the trust fund (certain investments) and not be responsible for other assets. If this is the case does it logically follow that an investment advisor can exclude employer stock from the assets for which he renders advice? if an IA did this and subsequent problems arrose with the stock and failure to diversify, could the IA be held liable for this failure to diversify?

I am looking at a similar issue and was wondering if anyone has anything to say on this in light of the recent opinion in the enron case. the court made several statements on diversification but it is simply an opinion denying a motion to dismiss so there is not much to go by in my opinion. additionally, enron was a fraud situation so it is easy to question the fiduciaries decisions.

we do a letter of instruction from the plan sponsor to the trustee per terms of the volume submitter document.

the statement i made regarding 401(a)(4) was inaccruate. i realize the plan must pass 401(a)(4) and the gateway. however, the first sentence is not incorrect as someone stated. i believe i have resolved the question. the plan must satisfy the gateway regs or have broadly available allocation rates. thus, if each rate group does satisfy 410(b) you are probobly using the minimum allocation gateway. if this is the case the contribution must be allocated without regard to the allocation conditions in the plan. blinky, can you clarrify when you would suspend allocation conditions? it seems as though you have to give a gateway allocation to anyone receiving any other nonelective contribution (ie. top heavy) regardless of allocation conditions in the plan.

the gateway regulations say that the Plan Administrator must allocate the gateway contribution without regard to allocation conditions. i am wondering when the contribution is actually classified as a gateway contribution. lets say for example the employer decides it wants to give HCE's 15% and NHCE's 5%. this of course satisfies the gateway regulations but if it satisifes 401(a)(4) on its own would any of the contribution to the NHCE's have to be allocated in accordance with the gateway regulations?

my understanding is you return the 402(g) excess and issue a 1099. also you include the excess for HCE's but not for NHCE's. is this in in the regs and do they permit other methods of returning the excess such as returning the money through payroll?

Does the code allow for participant loans from Simple 401(k) plans?

is anyone aware of an exemption to the 100 participant rule for simple plans if the sponsor is dissolving or winding down?

if they are classified as deferrals that would be a deemed coda correct?

what filing deadline are they talking about? you dont even have to file plans and i always thought you could file at any time.

is it permissable to allocate PS contribution to HCE's during the PY and NHCE's at the end of the PY? Among other things, it seems discriminatory to me.

I have heard there is a possibilty that the IRS may extend the RAP one more time. anyone hear anything about this?

to add to the first post, can a participant roll a roth IRA account into a traditional 401(k) plan if the plan allows for rollovers?

can a person roll his Roth IRA into a qualified plan if the plan permits?

Two part question - 1) If two participants are actually paid out (checks made) on January 3 of 2003, does that require that a final 5500 be filed for 2003? and 2) The instructions talk about a final 5500 after all participants have been paid out but we have a case of funds being left over for the specific purpose of paying the trustee's fee. can the date the trustee fees are paid out be used as the date for the final 5500 or must you use the date the last participant is paid out?

i have a similar question with regard to the form. we have the same problem in our office. we do not have the new software release. anyone know what to do? can you define "hard coded"?

Pax, we have done all of your suggestions and are still left with the large excess. the sponsor was never a corp. he is just a sole proprietor and there are no plans to stay in business going forward.