MR

so a guy wants a hardship withdrawal for purchase of his primary residence. the catch is that the residence will be shared with his sister and brother in law and it will be in their names, not his. does this qualify? its his primary residence, so i would think its ok.

it was a profit sharing plan before converting to safe harbor 401(k).

A safe harbor 401(k) plan consisting solely of deferrals and safe harbor match is deemed to be not top heavy. What happens if there is a forfeiture to be reallocated? Are we now not deemed not top heavy? This issue has been discussed before, but I don't know if its been resolved. My client uses the safe harbor match, so having to bring everyone up to 3 percent is kind of a big deal. any insight?

its in mutual funds. they want to rid themselves of the recordkeeping and reporting responsibility. all participants have had a distributable event and they want to force them out.

when determining the earned income for a self-employed dude, we have always taken the net earnings from self employment number and subtracted the 179 expense. in reading the sal tripodi definition of earned income, he seems to imply that you do not subtract it. what's right? mr

I'm not so sure about all cross-tested plans becoming db plans. We're writing alot of these types of plans and I don't think the idea of a required funding level would go over very well.

the plan has been keeping the er money in a pooled account. what's your suggestion on getting that distributed?

i have a client that has an "inactive" 403(B) plan. all of the remaining participants have terminated employment, some with vested balances exceeding $5,000, some not. since there is no real plan termination procedure for 403(B) plans, can we force these remaining participants out?

is it possible for the doc to make the ex whole outside the plan?

suppose a doc gets divorced and the dro indicates the ex is entitled to a specific dollar amount (not to be adjusted for investment gains or losses). what happens if the doc's balance drops to below the amount specified in the dro? obviously the ex can't be paid what isn't there, but where do we go from here?

I am aware of a q&a wherein an IRS rep confirmed that an employer may not allow an employee to defer from severance pay. We have a situation where a company goes through some tough times and reduces officer compensation with a promise to make it up to them when things turn around. The officer subsequently terminates, but is still entitled to the promised make-ups. Can the officer defer from this? The compensation is attributable to a year in which he worked, so I'm not sure its treated the same as severance pay. Any thoughts? mr

I own a TPA firm with about 20 employees. i'm looking for creative ways to offer incentive compensation to my group. Any ideas that have worked?

I know this issue has come up before, but I'm curious how others are handling it. For 2002, plans consisting "solely of contributions under 401(k)(12)" which is the safe harbor match and safe harbor non-elective are not considered top heavy . The question everyone has is - what if the safe harbor plan originated as a profit sharing plan and there is profit sharing money in the plan? Do we still get out of our top heavy requirements? I haven't found a definitive answer and am wondering what stance others in the business are doing. thanks, mike

What about compensating the affected employees by way of a taxable bonus? Let 'em do a CODA of up to 100% of bonuses.

we charge $75 set-up fee, plus $35 annual maintenance. i've started encouraging clients to pass all fees along to participants. they might reconsider borrowing $1,000 for 3 years if its going to cost them $180 to do it.

they're not my client yet - i'll have to ask that when i meet them. what would happen to the simple contributions already made in 2002?

lets say an employer sponsors a SIMPLE IRA plan and turns out to have over 100 employees. does this somehow allow them to convert to traditional 401(k) mid-year to "correct" the problem?

Are there any circumstances under which a town can have a 401(k) plan?

if a partner in an LLC wishes to purchase life insurance through his plan, it looks like the premiums are not deductible to the LLC. It may be, however, only the PS58 costs that are not deductible. For example, if the premium is $6,000 and the PS58 cost is $200, the employer could deduct $5,800. True? Also, can a trust be the beneficiary of such a policy?

If I work for two unrelated companies, each of which has a SIMPLE IRA, am I still limited to $7,000 in total payroll deferrals? I know that the 402(g) limit applies if I participate in a SIMPLE IRA and a traditional 401(k) and that I'd be limited to $11,000, but I can't seem to find anything that specidically addresses the two SIMPLE IRA limit.

thanks, does the answer change if there are 3 beneficiaries and one of them want to take minimums, while the others take lump sums? also, can they amend the plan to permit this after the employee has died? mr

say a participant has attained age 70 1/2 and began taking MRD from his dc plan in 2000 using the single life table. his beneficiary is his daughter. he dies and the daughter doesn't want to be taxed on the full balance. new MRD rules seem to indicate that she can continue the MRD, but that her life expectancy would be used, not the participant's. this seems available only if the plan utilizes the "alternative rule", rather than the "5-year rule" for purposes of determining when the distribution must be made. questions are: 1. am i right? 2. if the plan does not currently utilize the alternative rule, can it be amended at this point to do so?

Can an estate use the social security number of a deceased participant as its own tax ID or does the estate need to apply for a tax ID?

an old question, but given EGTRRA, any new thoughts? client discontinues participation in a 403(B) plan ( were 2 employers in the plan). can employees who are still employed transfer balances to an IRA? i understand that there is no defined procedure for terminating a 403(B), but what are plans doing in practice?

when submitting a cross-tested plan for approval, is there any reason to complete question 11 on the 5307? the question is applicable to plans that are requesting a determination regarding the ratio percentage test. most of the pension attorneys are having us complete this section, but i'm not convinced its of any value. thoughts?