dmb

You understand the situation correctly, and company B does pass 410b without considering company A. Are you saying that two New Comp plans can be set up, one for each company and company A can give employees 3% of comp regardless of the company B plan??

A client is 100% owner of two companies. Company A, he is only HCE and has about 20 other employees. Company B, there is an additional HCE and about 20 other employees (not same employees as company A). Company A is not very profitable and he would only like to contribute 3% TH min. Company B is profitable and he would like to max out himself while somewhat minimizing employees. Is there a way to set up a plan for each company and accomplish this?? Is there a way to set up new comparability plans and avoid giving 5% to employees of company A?? Thanks.

Can a 3% NEC SH 401k plan have an integrated profit sharing allocation that includes the 3% SH contribution??

Ok, i'm having a brain fart. If the contributions are: 1/1/02 - 11/30/02 = 275,000 12/01/02 - 11/30/03 = 300,000 Can they take the deduction for the full 575,000 or must they pro-rate 575,000 * 12/23 = 300,000 for 2002 calendar year deduction?? Sorry for being so dense. Thanks again.

I was thinking some more (dangerous), since both plan years begin in the 2002 fiscal year, would that make this do-able. Thanks again.

That was my thinking also, actually this situation was brought to my attention by a CPA whose client received this proposal from a firm in Houston. Thanks for the help.

I have a DB plan effective 1/1/02. First plan year is short year ending 11/30/02. Plan year is now 12/1-11/30. Fiscal year is calendar. Beginning of year valuation date. If the contributions for the first two plan years are made in 12/02 would they both be deductible for 2002 fiscal year? thanks.

If an employee terminates from an employer with a 401k Profit Sharing plan and the employee has deferred and receives a PS allocation for 2002, can that employee start their own business and contribute full contr to a SEP for 2002??

Are allocated forfeitures counted toward the gateway test? If the HCEs are receiving greater than 15% of comp and the NHCEs are receiving an employer contribution of 4.7% of comp and .3% of comp from forfeitures, is that considered passing the gateway?? Thanks.

Ok. I have a top heavy cross tested plan with two classes, Owners and others. The owners are getting 20% of comp, the others are getting 8% of comp to pass discrimination testing. There is one active participant who worked less than 1000 hours, but since he is active is entitled to the top heavy min. The document does not have any specific language with regards to this situation. My question is how much should this participant receive?? The 3% TH min, the 5% gateway, or the 8% that the other participants are getting??? Thanks.

OK, now i'm confused. Based on prior threads, i was under the impression that if an active participant worked less than 1000 hours in a top heavy plan and the gateway was 5% but the minimum for the "others" class to pass discrimination testing was, say, 8% that the above participant would need to get the 8% if there was no lanuage in the document. Is that not correct???

I am considering changing the valuation date for a DB plan from Beginning of Year to End of Year. There have been no changes since the plan's inception in 1999. Does this meet the automatic approval for funding method changes or must we apply for approval?? Thanks.

Is it too late to convert a Money Purchase Plan to a Defined Benefit Plan for calendar year 2002 if the plan is more than owner only?? Thanks.

If a cross tested ps plan excludes bonuses for allocation purposes, what comp must be used for discrimination testing??

When is latest that a calendar year standardized profit sharing plan be amended, for example to a cross tested allocation?? Is it before any participants work 500 hours or is it prior to the plan year since active participants only need 1 hour to accrue the std allocation?? Thanks.

Actuallly, now I'm looking at a Cash Bal only.

I have a PS and MP plans that both terminated as of 10/31/00. Plan years end 10/31. The plan term included the GUST amendments, but not total restatement of documents. Final distr of assets took place prior to 10/31/02. Does the document need to be restated in full for GUST or was the GUST amendment sufficient?? Thanks.

Thanks again, but it looks like i'm missing something. LIke i said, I have two onwers in their 50's who are the only HCEs and almost 60 other NHCEs from their early 20s to a couple in their mid 50s and if the allocation to the NHCEs is 3% of comp, it looks like the most i can give the owners is 26% of comp. Does that sound right??

Thanks for the response. There are only two HCEs and this would be the first year for the PS as well as the Cash Bal plan. So I can test the Cash Bal contributions using the 417(e) rates rather than the standard testing rates??? and you're saying that i would convert both contributions to an accrual rate and i would need to pass the rate group test and the avg. benefits test?? Thanks again.

I've done a few cash balance proposals, but it's been a little while and i'm still not totally fluent with regards to testing and such. I am working on a proposal for a two owner and 50 or so common law employees to possibly set up a Cash Balance with a PS plan. I have two groups, owners and others, would like opinions as to the best way to test for discrimination regarding the DC and Cash Balance contributions, whether cross testing is best or not. Thanks.

I have a client with a 403(B) plan. I really don't know much about 403(B) plans. The client has less than 100 employees. I was told that a Form 5500 was not required to be filed. While i don't know much, i see from other threads that Form 5500s are filed for these plans. Are there any circumstances where a Form 5500 would not be required for an active 403(B) plan?? Thanks.

I have a client that fits the split DB/DC criteria. Young and Old Owners, and a similar mix of employees. They currently have a 401k plan. Can the DB participants continue to defer in the 401k (without getting a PS contribution) without the plans being subject to the combined plan 404 limits?? Thanks.

so even though the employer is contributing over 15% for the HCE, as long as the total allocation for each NHCE is at least 5% the plan's ok???

Along the same lines, i have another question. Where do forfeitures fit into the gateway minimum. I have a plan with one HCE and a handful of NHCEs. the NHCE gets $7,000 in forfeitures so his PS alloc is $33,000, which based on $200,000 of comp is 16.5%. the forfeiture alloc is 3.5%, which is the same for everyone receiving an allocation. The gateway would be 5% (assuming plan passes non-discrim testing). Are the forfeitures included in that gateway minimum or is the 5% on top of the forfeitures?? Thanks. The plan is not Top Heavy, let's not go there this time.

I like to name my owner classes as "Direct Owners" and "Children of Direct Owners" and even "Spouses of Direct Owners" if necessary.