Alf

Assuming no 409(p) problems with the S Corporation ESOP, it literally looks like an S Corp ESOP with only non-voting shares would be subject to UBIT on all of its earnings because the shares are not QES under 409(l) because it can't meet the exception in 512(e)(3). Is it really that clear? Anyway else to interpret the 512 exception? If that is true, you could never really use nonvoting stock in an S Corp ESOP, correct?

I completely agree with this. Distributions on plan termination can be held up until the IRS approves the DL, but if a participant is otherwise entitled to a distribution (death, term, etc.), you have to follow whatever the document about timing.

They are not included for top heavy. 403(b)s are designed to NOT be employer sponsored plans and avoid ERISA. That may not be the technical reason, but that is the correct answer, I believe.

I think they are included. In-bound rollover contributions are taken into account I think, so the auto rollover valuation sounds more inclusive than the regular cash-out rules.

. . . or a minimum required distribution, . . .

Yeah, I thought SH conts were treated as QNECs. No hardships.

We treat it as dual purpose (general health normally, but could be prescribed for treament of a condition), which our plan does not reimburse, so we say no.

Will someone please catch me up? Why does it say ($200)?

The practical answers to your questions are: IRAs can only be established in the names of individuals; Custodians have annual reporting requirements to the IRS, so the government will know the SSN of the beneficiary; I don't even think it is possible to hold one through a "blind trust" for political or conflict of interest purposes, but I suspect that is not the type of privacy you had in mind; Asset restrictions are pretty small, but I don't think foreign situs assets are permitted in most cases which is what I suspect you had in mind; These are highly regulated tax-favored investments, so I doubt that it is what you want. Without offending you, I wanted to mention an old tax saying that may apply: "pigs get fat, hogs get slaughtered."

Everyone seems to think it is ok, but I originally understood that the IRS didn't like individual rate groups. Hopefully, more will chime in.

The allocations need to be definitely determinable, but the testing detail does not have to be in the plan. The groups and rates need to be specified.

I second the concern that "tempory employee" doesn't mean anything out of context because it used differently from employer to employer. The plan can say whatver it wants, so if it provides that full time employees get participation credit for time served as temporary employees, it will work.

I understand that employer discretion as to the timing of distributions is prohibited, but that tons of documents have discretionary provisions for cash outs. I don't believe it is permitted, so I would say that under the new rules the plan should indicate when cashouts are going to be made and administer the plan accordingly. There is no limit specified in the new rules, the cashout rules are discretionary, so anything goes (except total employer discreation imo).

Yes. Plus, I am not sure that your distinction works in this case - isn't unused vacation paid because the employee did actually work instead of take the vaca?

It is a qualification problem that needs to be corrected or the plan could lose its qualified status. Hopefully you can justify being eligible for self correction. First, you need to clearly identify what the money really is. It sounds like contributions to the plan were never allocated and you now want to use the money to benefit current participants (by paying expenses, allocating now, etc.). That is wrong on so many levels that it can't be justified imo.

Um, by saying they "cant be located," I mean that we know they were not filed, but freeerisa and planeterisa were good ideas. Without the 5500 issue, I would think that they need ERISA compliant documents and that retro documents are probably better than no documents at all for the past period. Now, using the retro documents to get out of extra DFVC filings and pentalites offends us on some level too, so I wanted to see if there was some sense of outrage at the idea on this board, but I am not sensing it. If we are aware of the risks, it does get them back into the system and compliant going forward, so it sounds like an alternative at least.

Great, another cheap, non-substantive post by Belgarath!

We have several HIPAA and non-HIPAA welfare benefit policies and want to wrap them into one ERISA compliant plan document to satisfy the law and avoid multiple 5500 filings. Do you think that HIPAA is enough reason to maintain two wrap docuents going forward? Also, of course some 5500s "cant be located" (weren't filed) for several of the past years. Assuming that the policies going back several years don't satisfy ERISA, is there any beneift to creating a wrap document now that has a retroactive effective date? Does anyone think that this would give us sufficient basis for filing a single 5500 under DFVC for several of the past years?

Will the IRS let us fix a problem with the HCE Top-Paid Group Election Consistency Rule by plan amendment? I know it is pretty obscure, but here goes: Employer sponsors two 401(k) plans for different groups. Demographically, they need to make the top-paid group election to pass testing. The plan that wiould pass without the election has specifically incorporated the election in the document. The plan that needs the election does not mention the top-paid group election. We understand that all plans of the employer need to make the election and we want to amend the non-electing document to correct the problem, but can't get our hands around what the IRS would do with a VCP filing requesting apporval of a retroactive amendment. The problem goes back to the GUST restatement. Do we file anonymously requesting plan amendment adding the election, hide out and bury the problem in the EGTRRA round of changes, or something in between?

I agree with John. This is not some play money account, this is your retirement. You should make sure that everything is done properly from the beginning. As for telarsen, all IRA investments provide TAX FREE income and grow TAX FREE. It is irresponsible to suggest that one not get an attorney to help properly document and structure a loan to an unrelated party, much less one out of an IRA.

There is nothing to own in a sole proprietorship, except any underlying assets I guess. Are you asking if an IRA can run a business? No. IRAs can own investments and that can include stock in companies that run businesses, but that is a pretty important distiction.

I agree with all of the above. The new hire rule shouldn't apply for performance bonuses and the rule about elections after comp is already earned won't apply to them either. Finally, I agree that we don't know anything about the performance bonus rules, so I wouldn't rely on them. I would get elecitons now.

2/17 on those facts.

I think you have questions about it being a disquised contribution if paied by the sponsor. It is a trust expense and payments made by the sponsor should be nondiscriminatory and subject to deduction limits like other contributions.

The document is your problem and you can't amend it after 12/31. Plan for next year.