wmyer

Belgarath, I assume you mean 100% limit, not 25% limit? BDZ, I agree that Form 5310-A needs to be filed for both plans.

FJR, topheavy would have nothing to do with it. The question, as I understand it, is about terminated participants (who wouldn't need a topheavy contribution since they are not employed on the last day). But because the participants get the SHNEC, they must get the additional 2% gateway.

That's correct--no final 403(b) regs yet.

Needless to say, I mean, YES, it is available...not yes, it is a stupid question.

Yes it is.

The mandatory IRA rollover was effective for distributions on or after 3/28/2005. Are you trying to avoid rolling over <5000 distributions to an IRA? If so, why not simply reduce the cash-out amount to 1000?

I assume you are still working for the employer with whom you have the 401(k), and that you are not 59 1/2 -- if you are no longer working for the employer or are over age 59 1/2, you could have another distributable event. Recall also that harship distributions are subject to federal income tax and possibly also state income tax and a 10% penalty.

Indeed that used to be the case, but was changed by EGTRRA. Thus IRS Publication 590 (page 65) states: After the 2-year period, amounts in a SIMPLE IRA can be rolled over or transferred tax free to an IRA other than a SIMPLE IRA, or to a qualified plan, a tax-sheltered annuity plan (section 403(b) plan) or deferred compensation plan of a state or local government (section 457 plan).

You are correct. The 25% penalty only applies if the 10% penalty would otherwise have applied. The qualified plan has to accept rollovers from IRAs.

So if the short plan year is a 2005 short plan year, and you want to use final regs that are generally effective 1/1/2006, that's okay, but you will have to be in compliance with all aspects of the final regs for the 2005 plan year.

I'm assuming that this is not a successor 401(k) plan. You can start the plan up by October 1, 2005 and give notice on October 1, 2005 if you want the plan year end to be 12/31/2005. Alternatively, you can start it up later with a different plan year end and still have a 2005 plan year. You could also have a traditional 401(k) the first year and amend to Safe Harbor for 2006.

That information would likely be in the prospectus.

Maybe the DOL schedules should come first, then the IRS schedules. Or vice-versa. Where in the alphabet does the letter "SSA" come...is that before "T"?

Is this plan going to have an audit from an independent accountant? Will the financial statements match the Schedule H? Will the accountant give a clean opinion on the financial statements?

R. Butler, recall that DFVC is not available for EZ filers.

See this link to the on-point ASPPA Q&A: http://www.reish.com/practice_areas/Techni...s/IRStip149.cfm

Austin, as I read the question, they're not decreasing the vested percentage...they're increasing from 6-year graded to immediate vesting for new money. This can definitely be done, assuming no system, administrative or plan document issues.

What you are asking about is an age-weighted or new comparability plan. The profit sharing contributions are tested for nondiscrimination based on projected benefits at normal retirement age, rather than based on contributions.

If you do a message boards search under "tear stained letter" I am sure you will find many posts about this topic!

In other words, No, a full 5500 must be filed.

As of right now, there are only Proposed 403(b) regs. Until the regs are finalized, 90-24 transfers would still be permitted (so long as the plan permits them).

Was this always a one-participant plan...did the plan ever have common law employees? Is the employer part of a control group? Answers to these questions may make a difference.

There is no maximum number of employees in a SEP, unlike a SIMPLE IRA. There is no CODA feature in any new SEP. However, you may consider establishing a nonqualified plan for the HCEs.

How about a profit-sharing plan with a 2-year wait? Or a SEP with a three-year wait? Are any of these employees collectively-bargained? Why doesn't the employer want to benefit the "as-needed" employees? If it is a cost issue, what about providing at least a traditional 401(k) that wouldn't require any employer contributions (as long as it's not topheavy)? If ADP testing is an issue, the HCEs can be excluded or their contributions can be limited.

Yes but the proposed 415 regulations change this to the 15th day of the tenth month! Although they cannot be relied upon yet....