Alan Simpson

The trust does not have to be created by will. That is just my personal scenerio. Also, since the trust immediately comes into effect upon my death (and that of my wife) then there is no probate as far as the IRA/retirement plan goes and everything goes into the Trust.

I use "XXX Family trust as created by Will". This leaves no doubt that the Trust is the beneficiary and I don't have to worry if the Trustee changes.

I have since talked with a representative with the PE division of the IRS and was told that up to a week ago he would have said 100% vesting is not required. However, there is to be a meeting on the first of the month (I believe in Washington) and this will be discussed. Perhaps we will get some final guidance after that.

Does anyone have a definitive answer on the IRS position regarding whether you have to 100% vest participants in a MP plan that is being merged with a PS plan?

ACH stands for Automated Clearing House. Basically this is where money is dedcuted from one account and deposited into another account either in the same financial institution or different institutions. What this does is allows money to be moved from one account to another account without having to do a wire transfer or prepare a check. For example, most paychecks are now ACH deposited into the employees checking/savings account and you only receive a paper notice (paycheck stub) indicating the amount that was deposited.

Are you sure that moving to a document sponsor that doesn't know about the letter of intent to adopt. To me it sounds like the person you are talking to doesn't work with retirement plans to much - perhaps they could spend a little time going up the ladder until they find someone who know about this. You are correct in that the letter of intent should be signed by both the employer and the document sponsor. Basically what the document should state is: 1) Employer intends to adopt the XYC Company prototype once it has been approved by the IRS and that it is being done to extend the remedial amendment period. 2) The document sponsor should indicate the date that they received the "letter of intent". There is more to the actual "letter of intent" than I mentioned above (i.e. specific references to tax regulations and revenue procedures), but that is the basics.

Are you sure that moving to a document sponsor that doesn't know about the letter of intent to adopt. To me it sounds like the person you are talking to doesn't work with retirement plans to much - perhaps they could spend a little time going up the ladder until they find someone who know about this. You are correct in that the letter of intent should be signed by both the employer and the document sponsor. Basically what the document should state is: 1) Employer intends to adopt the XYC Company prototype once it has been approved by the IRS and that it is being done to extend the remedial amendment period. 2) The document sponsor should indicate the date that they received the "letter of intent". There is more to the actual "letter of intent" than I mentioned above (i.e. specific references to tax regulations and revenue procedures), but that is this basics.

I would also include either an amendment to the plan document removing the loan provisions (if not using a prototype) or a new adoption agreement (if using a prototype) indicating that the loan provisions have been removed from the plan. Either of these two options should be backed-up by a Board Resolution. As a side note, if there are any outstanding loans how are you going to handle them?

While not an expert on this subject I had problems using a version of Internet Explorer which had been cusomized by AOL for use on their site. (I don't use AOL, but that was the copy of Internet Explorer that was installed on my machine when I had a cable modem installed). If I recall correctly it seemed that the Java Script did not act correctly using the AOL version. However, I feel the problem is with the customized version of IE since as soon as I updated to a true version of IE the problem did not occur again. Perhaps you could write a little directional summary on how the participants could get a "true" version of IE from the Microsoft site and install it on their machine. It wasn't that hard to do. As a side note, some of the participants using Netscape had problems accessing the WEB site. However, this was cleared up when we went to 6.0.

What about going to the participants that were paid out and getting the overpayment back. Yes, I know it is not an easy thing to do but it is the financial responsible one. Also, how are you going to handle the 1099-R for the distirubtions if you don't get the overpayment back?

If by segregated accounts you mean individually directed accounts, yes it is possible. However, I would consider the following: 1) Does the plan document and investment policy allow for individual direction? 2) Will the Trustee of the plan be willing to be the signer on the account and work with the investment advisor/broker? Since the trustee is responsible for the plan and its assets they should be the only signer on the account. The account could be established with the Trustee as signer but giving the individual participant written authority to direct the investments in the account as long as the trustee is comfortable with that setup. 3) Will the ability to have an individually directed account be offered to all participants? If not then you may have a problem. As long as the ability to self-direct is offered and communicated, it does not matter if they take the opportunity to direct the account. 4) How will fees for the individually directed account be paid? 5) Who will review the individually directed account and its transactions to ensure that no prohibited transactions have occurred?

Why not see if there is an independent TPA in your area that will allow you to invest in multiple families of funds. I am a TPA and currently work with a broker who executes the trades among a number of fund families which are selected on a plan-by-plan basis. Please note that in past conversations with some of the firms mentioned, I have learned that you can have other fund families. However, your options may be restricted to which funds are available and how many investment options must be with the "primary" fund family.

As I recall there was an article on this website regarding corporate trustees. I would use the SEARCH for CORPORATE TRUSTEE and see if you can find the article. Also, just as common sense scenerio, if they have the ability to hire/fire a corporate trustee then they ultimately have some responsibility since they do have some control (although maybe not on a daily basis) over the plan and the assets.

I actually have worked with an IRA holder that made loans from his IRA to other individuals (none of which he was related to). While this is permissible, the one major hurdle to overcome is finding a Trustee/Custodian for the IRA that will hold the notes as assets, ensure that the month payments are being received, and whose fees for these services will be reasonable.

QNECs are employer contributions and are like matching and profit sharing contributions in that they are not subject to taxes (until withdrawn). While QNECs are treated as "elective deferrals" this means that the QNEC is 100% vested as are employee deferrals. Not that they are an election by the employee to defer since the employees have no say in the QNEC.

We currently are looking at updaing our firewall protection for our VRU and Internet servers. Does anyone have any recommendations? Thanks in advance.

Since it appears that the takeover hasn't happened yet I would ask for something in writing from B indicating that they will continue the plan document that A used. Sometimes things change from how they start in situations like this. With that said, why not look at the document for A and B and see which one you would like to use when updating for GUST.

When doing the coverage, ADP/ACP, and top-heavy testing on a multiple employer plan, is it done on a company by company basis or the plan as a whole. Any site would be appreciated.

If the participant had the check in April then it is a distributable event at that time and should not be changed. The rollovers rules do not change just because the participant did not take any action with the check that she did receive.

Why not just have the participant cash the loan check and then make a payment that pays off the loan. If the loan payment had been made under a mistake of fact (i.e. loan not really funded) you might be able to get that payment back to them. However, in appears in this case that the participant was aware of the loan, the loan was funded, and just wanted to change their mind about having a loan. My position would be that once the loan paperwork is signed, and the loan has been funded, you have a loan and that the only way to get out of the loan is to pay it off, not just give the check back. Remember, you are setting a precedent here and what do you want other participants who take a loan to know -- that they can change their minds and create more work for other people, or that it is their responsibility to fully understand what they are doing.

This actually was a question posted to an IRS representative from the EP division and the answer in general terms was: While the information that I have seen appears to allow the credit, the real question is whether the tax return will have the line items that will allow you to take the credit.

You could also try http://www.irs.ustreas.gov/prod/forms_pubs/forms.html

She could also place into the IRA the amount of taxes that was withheld from the distribution.

If you will provide me with an e-mail I will e-mail you a participant statement I have created that summarizes the participants account (per investment fund) on the first page and then breaks it out on subsequent pages. You should be able to use this report (deleting what you don't want - however, you may need to make a little modification to the report since I have my accounts setup differently that some). As a disclaimer - verify the information produced by the report to ensure that it is correct. Also, I would be interested in hearing how your conversion from 5.0 to 6.0 goes as I will be doing the same in the near future.

Are you looking for a participant statement or just a report for your internal use?