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I'm aware of that. I just considered Last Day/1000 hours to be accrual requirements as opposed to class definitions. Not sure if I mis-read the question. Good Luck!

The non-discriminatory classification test.

They can test under the average benefits test. It appears they will have already passed the non-discriminatory classification test at the maximum ratio for passing the test is 50%. Good Luck!

Well, the one thing we do know is that whatever the deferral is, it will become taxable in the year it is no longer subject to a substantial risk of forfeiture. So, how would taxable medical or reimbursements be subject to a risk of forfeiture? Not sure if that addresses the issue. Good Luck!

Not really. As long as proper protocol was followed when making the hardship determination and issuing the distribution, then you cannot put the funds back; that would be too much like a loan. When making a determination, there isn't a requirement to follow up and make sure the transaction actually took place. Good Luck!

Used it to offset the next payroll. This was typically done during the same year, where the annual totals for the employer would balance the deposits to the trust. This could remain in option, even across year if the employer is contributing a discretionary profit sharing. The primary objective is to avoid throwing something else out of balance when trying to fix the first thing. Good Luck!

It doesn't matter. After the spin off, each plan would continue to pass the necessary non-discrimination and reporting requirements. No big deal; even if the primary reason is to get each plan below the 100 participant count. Good Luck!

You know, I used to fix this by having the employer correct the employee outside of the plan, and offsetting the employee's balance (at least the contribution portion) with a payroll. That was prior to the 2008-50 rules. I am not sure if that would be an appropriate fix, but it would certainly place the plan in the same position had the error not occured. Good Luck!

You cannot amend a 403(b) to a 401(k). They are two different animals. You'd likely have to terminate the 403(b) and begin the 401(k). I would ensure that the free-ride on the deferrals isn't compromised by trying to start a 401(k) without a safe harbor provision. This happens too often as the investments become the primary sale absent any thought of proper plan design. Good Luck!

Different story. When dealing with 403(b) plans, or any plans for that matter, you must remain mindful that different rules apply to different sources of money. The universal availability rules I mentioned applies to the employee deferrals only. The employer side may be eligibility requirements (i.e. 21 years of age and 1 year of service). Good Luck!

The plan document will typically prescribe the method. It's usually a top-heavy profit sharing that doesn't require immediate vesting. So, it wouldn't have to be a QNEC. Good Luck!

If it's a 501©(3) non-profit, I'd suggest a 403(b) and refer them to a financial advisor. They can get hooked up with a 403(b) document, and avoid the ERISA complexitites of a qualified plan (i.e. amendment cycle, and 5500s). Not that this is major stuff, but beats paying annual administration fees to a TPA for nothing more than "keeping the plan qualified". Just a thought. Good Luck!

I think the term "single security" means an individual stock or bond; not a mutual fund comprised if stocks and bonds of several companies. I could be wrong, just shooting from the hip on this one. Good Luck!

A corrected 1099-R would seem to be the best approach. Good Luck!

I was thinking more along the lines of the plan being established for the purpose of retirement income. To say a beneficiary "must" be entitled to payment immediately after the participant's death, regardless of the amount, would appear to be along the lines of life insurance. Not that it cannot or should not exist in retirement plans, but merely stating that the primary purpose of the plan is still retirement. Obviously, there's nothing to preclude that 28 year old from purchasing life insurance. Just a thought.

In order to calculate the individual deferral percentage, you must divide the deferral by compensation. Mathematically, anything divided by zero is undefined. If included, what percentage would you include him at? Good Luck!

My question is are you sure the: 1) Law precludes distribution "PRIOR TO" early retirement age, OR 2) States that in worst case the distribution "MUST BEGIN BY" early retirement age. Again, I'm asking. But, it appears the law may "allow for immediate distribution" but "does not allow for distribution to be delayed beyond the earliest retirement age".

Not sure, but isn't that rule to suggest the benefits must at least begin by that time; as opposed to saying benefits may not begin until that time? I'm asking.

You'd have to follow the form (line-by-line). That's not being sarcastic, but realistic. Say for instance you deposited the funds in 2011 and made the coversion in 2012. Then, your Form 8606 would only reflect the deposit made for 2011. The conversion would be reflected on the 2012 Form 8606; and that would amount to less after-tax being converted should you make an additional deposted before the end of 2012. However, if you made the deposit and conversion during 2011, then the form would create the basis and eliminate the basis on the same form. Remember, the year of conversion is based on the date the conversion was actually done. You don't get a window. I am not sure if this helps, as I am not entirely sure of the series of events. Good Luck!

A SEP does not have the exclusion mechanisms similar to profit sharing plans. Hence, you cannot exclude by class (except for union, non-resident alien, or employees whose compensation during the year failed to meet the $550 standard). Therefore, when you lower the service standard to allow the one employee in, you've actually opened the door to allow everyone in. Also, there is no such thing as a 6 month requirement. You are only measuring the number of "PRIOR YEARS" during which the employee has performed "ANY" service. Good Luck!

The clock with start on January 1st of the year the conversion was made; that didn't require an amendment as the rule is already on the books. I do see what you're saying; but this would be implied since there is no other alternative. All rules for the qualified distribution period begin on the first day of the year in which the first contribution was made. Good Luck!

I agree. It appears as if the IRS contemplated this exact situation when they wrote the procedure. Good Luck!

No. The reason the plan has no eligibility for the deferral portion is because eligibility requirements are not allowed. 403(b) plans are subject to universal availability rules (with very few exceptions). There is no 6 month or 1 year option that you'll see in 401(k) plans. Good Luck!

Typically, they are paid director's fees; which is self-employment income with respect to the individual board member. Hence, they are not employees of the company. Good Luck!

Typically, they work less than 1000 hours per year or they're less than age 21, so they'll be excluded. Good Luck!