dmb

One Owner owns two distinct and separate companies. It is a controlled group, but also QSLOB. One company has nothing to do with the other, no overlapping employees. Each company has it's own 401k plan. Should or must the plans be tested on an aggregate basis or could each plan be tested on it's own for ADP & ACP as well as 410(B). Thanks.

If a participant in a DC plan turns 70 1/2 in December of 2002, it was my understanding that age 70 should be used to calculate the first RMD regardless of whether the distribution occurred in 2002 or by April 1, 2003. Someone has told me that if the first distribution occurs in 2003 it should be based on the age the particpant turns in 2003, in this case 71. I don't think that is correct, but couldn't find anything definite in the regs for either case. Any help would be appreciated.

Thanks for the quick response. I understand that i have to use the top heavy contribution if it's greater than the plan allocation. I'm also aware of the non-key HCE problems. I just want to confirm that i can use compensation from date of participation for testing when someone who enters in the middle of the plan year receives a top heavy contribution based on full year's comp. Thanks.

I have a Cross Tested PS plan that defines compensation for allocation purposes as comp while a participant. The plan is also Top Heavy. The Top Heavy definition of comp is for the entire plan year. If a partipant's Top Heavy allocation is greater than his plan formula allocation, which compensation is used for testing?? Thanks.

I have a prospective client who has leased employees and the client himself is paid by the leasing company. Can an employer be a leased employee and sponsor a plan??

Can a one life calendar year standardized MP plan terminate currently, adopt a DB plan for 2001 and fund only the DB plan for 2001??? I'm thinking this since a DB plan is considered a greater benefit than a MP plan.

Thanks again. It was my understanding that when a document refers to 417e rates, those rates are now the 30 yr rate and the 1983 GAM table, instead of the PBGC rates.

Thanks for the response, the main issue of my question is when to stop using the PBGC assumptions, when the GUST doc is adopted or after the 2000 year?? Thanks.

When amending a DC plan to a safe harbor DB plan is it possible to use service from 5 years prior to the effective date of the DC plan or is the 5 year rule only from the effective date of the DB plan?? If you can only use the 5 years prior to the DB effective date, what needs to be done to allow all prior service as far as testing and document issues?? Thanks.

I have a client with two plans, DB and PS. Assuming he would be able to deduct a contribution in the PS plan as he has in the past, he has made contributions to the PS plan for 2001 during 2001. The assets in the DB plan have not done well (suprise) and the DB contribution looks like it will excee 25% of elig comp. If this happens, would it be acceptable to move the PS contr to the DB plan as a mistake of deduction and if so when would the contribution be considered made to the DB plan, the date it was contributed to the PS plan or the date it was moved to the DB plan?? Thanks.

An attorney is drafting a GUST document for one of my clients. One of the sections explains the rates used to calculate the PVAB. It says to use either the Act. Eq. rates (which includes language for the 30 yr rate) or the PBGC rates, whichever rates produce the greater benefit. I don't think that the PBGC rates should be included in this document and I'm looking for some confirmation. Another issue came up. The question is when the GATT rates replace the PBGC rates prior to the adoption of the GUST document. I was under the impression that prior to 2001, valueing lump sums would be based on the greater of benefits provided by using GATT rates or rates specified in the plan doc (including PBGC rates). And beginning in 2001, PBGC rates would no longer be used. The attorney thought the cut off date for using the PBGC rates was the adoption of the GUST document, not 2001. Any confirmation or correction would be appreciated. Thanks.

If a particpant in a DB planis in a coma, what is the procedure as far as getting the participant to waive the J&S for distribution purposes?? The spouse would like to roll the money from the plan. Does she need power of atty?? or a court order?? Any help would be appreciated. Thanks.

Are non-qualified plans subject to minimum distribution rules??

Does anyone know if minimum funding deadlines (9/15) or 5500 filing deadlines (9/15 or 10/15) or any other pension related filings have been extended due to the terrorist attacks?? Thanks.

I know govt. plans aren't subject to IRC 412, but are they subject to Full Funding limits?? This is my first govt. plan and it's funding method is PUC, and the full funding limit is $80,000 and the Normal Cost is $130,000. Thanks.

Here's the situation as far as i know: An employer sponsors a qualified plan. He is thinking about terminating his plan. He has invested some of the plan $$ in limited partnerships and says he'll get killed (i guess he means tax wise) if he terminates and gets out of the limited partnerships. He says he read somewhere that a plan didn't need a plan sponsor and i think he wants to terminate the plan and leave it without a sponsor. I got all this throught a third party so i don't have all the details but that's what i know.

Are there any situations where a plan does not need to have a sponsor?? Thanks.

Thanks for the response, I would greatly appreciate a copy of the worksheet. Thanks.

A client has a Money Purchase Plan and the owner is over 70 1/2. His wife doesn't want to give spousal consent to waive the J&S. How is the MRD calculated without spousal consent when the J&S must be provided?? Thanks.

Does anyone know of a court case involving owners self directed accounts that made a large gain and all other employees in general fund with a loss or small gain? Were owners sued for fiduciary breach? (assuming owners are also trustees) Thanks.

A client has a Tax Deferred Annuity for an IRA. He turns 70 1/2 during 2001. He has mentioned that it is a Non-Qualified IRA. Is there such a thing as a Non-Qualified IRA?? If not, how must his RMD be calculated and can it be taken from one of his non-annuity traditional IRAs?? Thanks.

It was always my understanding that for partnerships and LLCs that did not use W-2s that the earned income would be the partners' net K-1 income. What i was recently made aware of is that net K-1 income is net of any Unreimbursed partnership expenses from the Schedule E (Form 1040). I was wondering if this is correct and if i should be requesting the Schedule E info in addtion to the K-1 income?? thanks.

Ok, my feelings have been confirmed on the rollover issue. Thanks for your responses. Now I have another question, since the money cannot be rolled over, how is it taxed?? Is taxed as part of his U.S. return or should he file a Chinese return, since it is Chinese money??? Thanks again.

I am designing a cross-tested profit sharing plan for an owner and 7 employees. The owner's son who is 12 years old is a part-time employee. He has never worked 1000 hours. Would it be legal and/or ethical to allow anyone employed on 1/1/2001 to enter plan and class exclude owner's children??? This way the son won't benefit, but will still be included for testing. Thanks.

I have a client that was employed by a company registered in China. The company made pre-tax contributions on my client's behalf into a retirement plan "Provident Fund" mandated by the Chinese government. The client made a small amount of after tax contributions to the plan. The client has left this firm and has received a letter from his former employer telling him he can move the funds out of the "Provident Fund". The client will continue to live and work in China. The account has a balance of approximately $170,000. Can the client transfer these assets into an IRA in the United States (and received all the benefits associated with a traditional IRA)?