dmb

Company A is 100% owned by Owner 1 and Company B is 50% owned by Company A and 50% owned by Owner 2. Owner 1 and Owner 2 are not related, there is no ownership attribution. Is this a controlled group?? and if not, is there a way to have a multi-employer plan where only one company is top heavy and therefore only the participants for the top heavy company must receive the top heavy minimum allocation?? Thanks.

A prospective client receives director's fees from a company that he no longer works for. It is my understanding that he should be treated as a sole proprietor and not an employee of the company and his income be treated as Schedule C income subject to SETD, etc. Can someone confirm or advise on this matter?? Thanks.

Are the requirements for the Small Plan Audit for plans with greater than 5% of assets considered non-qualified the same as the Audit for plans with over 100 participants?? Is it stated anywhere that the Small Plan Audit must be done on a cash or accrual or a hybrid method?? And must the audit match the Form 5500?? Any other info would be appreciated. Thanks.

I've seen threads about having two plans (a DB and a 401kPS) where there are no participants receiving employer contributions from both plans, but all participants eligible to defer. From what I've seen, the deductible limit would be limited to 25% of comp (combined plan limit). What if there were three plans (a DB, a deferral only 401k and a PS) with no common participants in the DB and PS?? How would that effect the deductible limit?? Thanks.

Maybe if they were from California, that might work, otherwise i don't think it's going to happen. (Just kidding)

so would you say that two 50% owners of a corp does not fit the "partners of a business partnership" criteria??

Can a C-Corp with two 50% owners and no other employees file a Form 5500-EZ?? Pursuant to instructions of line 7b, I'm having doubts. Thanks.

A participant terminated employment due to disability and died prior to receiving her distribution from a PS plan. She was not married and her beneficiary was her son. Is the lump sum distribution to the son subject to mandatory 20% withholding?? Thanks.

Can someone tell me the latest news regarding required minimum distribution calculations from Defined Benefit plans?? Have regs been finalized yet?? Thanks.

I have a similar situation. I have a one life sole prop that has a DB and a 401k deferral only. For 2002 would the $12,000 deferral reduce the benefit comp used to calculate the DB benefit/contribution. Thanks.

I have a plan that has over 100 participants and is required to have a 5500 audit each year. Can the fees for the 5500 audit be paid from the plan?? I believe they can, but can't find any confirmation, is there a site that mentions it?? Thanks.

Basically, the question is that like eilano said, two classes, owners and staff. Demographics make cross testing difficult this year. Some participants in the staff class are above the wage base and some are not. It has been mentioned on PIX that if the document provides for allocation based on comp to comp in each class that an integrated allocation would still need to be tested. Is that true??

I always thought that regardless of the allocation formula in the document, if the contribution is allocated based on a safe harbor formula, testing wasn't necessary. Is that not true??

Thanks Mike, that was my first thought also. I just wanted see if there might be an option i wasn't aware of.

I have a client with a DB plan that contains the 100% owner, his wife and a common law employee. The plan year end is 7/31/02. The minimimum required contribution would otherwise be in $150,000 range and the client is strapped for money. I realize the timing is not good, but is there anything i can do to reduce the owner's benefit. He has also almost fully accrued his benefit. Any suggestions would be appreciated. Thanks.

I have a Standardized 401k plan that is top heavy for 2002. The employer matches 100% of deferrals. All participants except one receive enough of a match to cover the 3% TH min contribution. Can the employer simply contribute an additional amount to the one participant to get them up to 3% allocation or must there be uniform allocation to all participants since it is a standardized doc?? Thanks.

I am trying to set up a DB/DC combo plan. There are two HCEs, one over 70 and one in early 30s. There are 8 NHCEs ages 23 - 67. One of the HCEs is 100% owner and he wants to participate in both plans. The DC plan is X-tested PS and the DB plan excludes the youngest empoyees and provides a 2% of comp benefit for the older employees while giving the owner as much as he can get considering the 404(a)(7) limit. The combined ebars pass the rate group test and avg. bfts test. Does the DB plan have to pass the rate group test and avg. bfts test on its own??? Thanks.

The son of the 100% owner works at the company full time, but does not receive any compensation. Should he be incuded in the ADP test or any other non-discrimination testing??? Thanks.

When must the Top Paid Group election be made for a plan year??

Thanks. Now let me ask you this. If the DB plan is a non Safe harbor formula, and i test the DB plan on an allocation basis and the PS plan on a benefits basis, how is the average benefits test performed??

If it was a safe harbor design would i have to test the accruals?? Let's say it's not a safe harbor design.

I have a client who has a X-tested PS plan, the two key employees are fairly young (41,35) so this may not be the best scenario for this, but we are looking at the possibility of adding a DB plan on top of the PS plan. My question has to with comp for testing . The PS plan uses compensation while a participant for allocation purposes. I know i can use participation comp for testing the PS plan. If i add a DB plan with standard 21,1yr elig, 1/1, 7/1 entry dates, can i use the same participation comp for testing the DB accruals???

Can classifications in a Tiered Crosstested profit sharing plan be based on compensation?? and if so, are there any special rules like smoothly increasing bands, etc.?? Thanks.

Mike, you're correct, i got caught up in the new comps, the plan for company A can be a std or non-std PS plan and only give 3% to everyone. And I also found out they want to do a 401k for both companies, so if i set up a prototype 401k PS plan for Company A and a New Comp 401k plan for Company B and pass 410b in the Company A plan can I test the Company B plan independently. Sorry for the confusion.

Ok, but when you say coverage and Mike says 410b, you're not just talking about the 70% overall test. You mean 70% for each rate group or passing the midpoint test, correct.