R. Butler

I can see your point, but I am not sure there is a solution. If your employer is in fact remitting deposits within 5 days of each payroll period, that employer is doing a better job than a vast, vast majority of plans. Its probably not administratively or economically feasible to remit deposits any quicker than that.

Yes

You need to see the discussion entitled "DOL dings up...." started by K Man under the 401(k) topic.

You cannot rollover the funds to another qualified retirement plan. Based on the information you provided your best bet is to probably to just leave it as it is. If you first participated in the plan on 8/4/98, you will be able to treat it as a traditional IRA on 8/4/00. If you take a direct distribution or attempt to rollover the funds to a traditional or Roth IRA within two years from the time the account was originally established, you will be subject to a 25% penalty.

The employer is correct.

I have always been under the impression that it is a prohibited transaction. It is a loan from the plan to the employer. If it is not classified as a prohibited transaction I would be curious as to where your classifying it on the 5330. I thought the whole purpose in filing the 5330 in such situations is that it is a prohibited transaction.

I know that premiums paid for a whole life policy within a DC plan cannot exceed 50% of the contributions to the participant. Is this rule applied on a cumulative basis (contributions vs. premiums since plans inception) or a yearly basis. My client generally makes the maximum contribution, but this year only paid premiums.

Its not attribution per se, but the spouse of a lineal descendant is a party in interest. (Erisa §§ 3(14), 3(15)). Also, brothers, sisters and their spouses would be considered parties in interest.

It is my undersatnding that k-mans experience is the current trend. The rule states that assets must be segregated as soon as reasonably possible, in no event will this time period exceed the "15 business day stuff". The DOL's position is that generally assets can be segregated within a few days of the payroll date. I attended a 5500 workshop and we were advised that the DOL is going to start hammering this one hard. If the employer is concerned about increased administrative expenses assoicted with weekly, bi- weekly, etc. deposits, it was recommended that at a minimum the plan sponsor establish a seperate checking account under the Plan's name, segregate the assets immediately into the checking account and still continue to remit monthly deposits to the investment company out of the checking account.

§318 is the place to look for determining attribution for top heavy and ADP/ACP testing, however, for controlled group purposes you use §1563. Under §1563 the "50% stuff" does come to play, however, there is never attribution to or from an "in-law" and you don't attribute the same stock twice (i.e., wife to husband to husband's father).

I am fairly certain the CPA is correct. The example you rely on merely states a general of deductibility; it does not supercede time limitations for making elective deferral contributions. The rules clearly state that salary reduction contributions must be made within 30 days after the end of the month for which the amounts would have been payable. Generally compensation of a self-employed individual is deemed available as of the last day of the tax year.

I think you are misunderstanding 408(p)(9). A matching contribution under that provision on behalf of a self-employed individual is not treated as an "ELECTIVE CONTRIBUTION" for purposes of the $10,500 limit on such contributions. The purpose of the provision is to treat self-employed pesrson in the same manner as employees for purposes of the limit on elective contributions. See also Notice 99-55. In your initial question you ask specifically about matching contributions, but in your reply you state that SIMPLE IRA's can only be funded with deferrals and a match. That is incorrect. Instead of a match the employer can make a 2% nonelective contribution for all eligible employees. The instructions to the 5305-SIMPLE form does a pretty good job of explaining the SIMPLE IRA. I hope this helps.

Yes.

Yes, assuming deferrals are not limited by the document and would not exceed the lesser of 25% or 30,000 of eligible comp.

I have always handled it in the same manner as Mr. Hunzelman.

Plan loans are genrally not available to owner/shareholders of an S-corporation. Probably not allowed with LLC status either, unless the LLC is tretaed as a C-corp.