Alf

You need to decide if you want to (or can) make a contribution to a ROTH or a traditional IRA. You have one of each and which one you use will depend on the answer to the first question.

"Should" policy-wise or under current law? I don't agree with the policy of subjecting 401(k) money to more stringent distribution rules than other contributions (generally), but will leave the policy issue to Congress. Under current law participants have to take available distributions under the plan I believe before being eligible for hardship, so I would say the answer is yes.

You just have to comply with 457(f) and 409A. Otherwise, you can form a "union" and go 419A . . .

No. It would violate 4975©(1)(E) and (F), whatever that means.

BKH, That is a great angle. At what point to you approach them? I assume you run it by them without requesting arbitration. Do you make it before the first payment is due (which has always been about 30 days after the demand letter in my experience)?

No cite says you can = you can't. The default for any distribution is immediate taxation. If there is an exception, you can use that narrow exception. If there is not an exception, it does not mean there is a hole that no one ever thought about, it means that Congress thought about it and wanted the distribution to be taxable and made it taxable by not creating an explicit exception to the general tax inclusion rule.

Will loans from Roth 401(k) money be triple taxed???

No. Roth 401(k) can go to Roth IRA (or another Roth 401(k)), but not the other way around.

Read carefully. Many (most?) plans that allow rollover CONTRIBUTIONS permit distributions at any time because these distributions are not restricted under law. To us, allowing rollover contributions but not unrestricted distributions is inconsistent.

Is a 4221 withdrawal liability estimate binding? The estimate was way off from what was assessed and we are questioning the value of the estimate if it is not binding on the fund in some way. Also, are the liability assessments REALLY negotiable? It seems like a solvent employer doesn't have any leverage, but we understand that technically, the Trustees may settle claims for withdrawal liabilty. Does it really happen?

It is not the custodian, I'll bet.

Assuming Owner is an individual and owns X and C in her individual capacity AND that there are no "interesting details" (options, reciprocal repurchase rights, etc), I agree.

That is all that is ever done. Of course, the terms of the plan must be considered, but there is no need for an amendment. What would it say anyway? Full vesting? Already in the plan. Distribution event? Already in the plan. . . .

No. In 2006, Roth 401(k) contributions can be rolled INTO a Roth IRA (or another Roth 401(k)), but not the other direction.

The mental competency of the participant or the participant's subsequent divorce or separation are the only things I can think of. You have to comply with all provisions of the custodian agreement, so it may have to actually filed with them, etc.

No limit. The stated age will satisfy the rules for non-401(k) money as well. Just don't forget about the mandatory 20% withholding.

Are you going to include a determination letter application in the VCP? I don't think that the auto rollover change is a model amendment, is it? the new VCP guidance is supposed to include an out for this if the amendment is "minor" but we won't know until it is out. I would hold off on the determination letter application (if you were going to include one) until the new guidance is out.

The plan document is required by law to provide for definitely determinable allocations. Allocations based on account balances are not safeharbor and will be discriminatory.

If an employee with a $1,000 check elects 10% Roth 401(k), is the Roth contribution to the plan $100 or $100 minus the federal income taxes?

Not a great cite!

The user fee will still be $0 for a PLR. Really no can do. 457s can't have deemed IRAs or Roth 401(k)s.

Great cite! Doesn't this make the valuation issue more complicated because now the LLC has to be valued which requires the land to be valued? Initially, this sounded like it raised UBIT or prohibited transaction issues, but it would probably work from those perspectives. Single member LLC would be disregarded, presumably.

$0. No can do. Do you want to get a private letter ruling on specific issues? What are the issues (generally b/c you have to determine which branch has jurisidction).

There is usually an initial set-up processing fee and on on-going admin. maint. fee, but the actual ammortized repayments go to the paticipant's account.

An employer can effectively do it by paying 100% and enrolling everyone, but that doesn't fit your facts. The biggest complaint I can come up with would be state payday acts. Assuming that they are not preempted (we treat them as being effective in the ERISA context), they generally require written authorization from the employee for deductions from pay. If you follow them, they would prevent you from mandating that all employees pay for participation in their plan. Also, it does not make good sense. What if a spouse has great coverage at their employment with a hugh subsity for family coverage? Why force all of your employees to overpay for inferior coverage that they won't use (from an employee satisfaction perspective that is, I understand why an employer wants to do it for themselvers)?