Harwood

Rev. Proc 2003-44 has some material on overpayments. http://benefitslink.com/IRS/revproc2003-44.pdf

http://www.dol.gov/ebsa/FAQs/faq_DFVC.html Basically: Send the late 5500 to the appropriate address in Lawrence, Kansas Also, send a copy of the 5500 and money to: DFVC Program P.O. Box 530292 Atlanta, Georgia 30353-0292

Original question: 1. Can you really exclude participants from your ACP test if they are not eligible for a Match due to a last day requirement? Per the textbook, "An employee may be eligible for the ADP test and not the ACP test, e.g., did not meet the last day employed requirement to receive a matching contribution." I have never seen this before and have always included participants in my ACP in this situation. And the question on the Practice Test: "Which of the following describes participants that can be excluded from the ACP test? a. A participant who cannot contribute due to a hardship distribution taken in the last six months b. A participant who elects not to defer c. A participant who is not included in the minimum coverage tests for the 401(m) component of the plan. the answer is © but I am not sure why?? My take: c. is referring to excludible employees who do not meet statutory age and/or service. They not included in the minimum coverage test. People who do not benefit because of a last day/hours requirement are part of the minimum coverage test. They are the includible employees who are not eligible to benefit. If you can't meet minimum coverage because so many NHCEs don't benefit, follow the term of the plan document. Employer must contribute QMACs so that enough NHCEs do benefit to pass the coverage test. After pass coverage: - run the ACP test only on those who are eligible to receive a match benefit.

I always found the key to ASPA tests was the old exams. Old tests PLUS all the recommended reading in The ERISA Outline Book [and the Study Guide, of course], is a real good basis for passing.

Regarding "Gilmore now that you mention that, you are correct Answer C to Question 2 is not a true statement. The regs are pretty clear that you are considered age 50 on January 1 of the calendar year you turn 50." The regs, issues October 2001, do say 50 by end of calendar year. However, EGTRRA itself says "who has attained the age of 50 before the close of the plan year." Maybe ASPA wrote the test question based on the law, before the regs were released.

The false statement is: "a. Participant deferrals may be recharacterized as catch up contributions after the plan year ends" Is the answer in the terminology? Is the statement false because "recharacterization" is a term used for changing elective deferrals to after-tax contributions? One determines how much of deferrals are considered catch-up; one does not recharacterize?

The Department of Labor publication "QDROs" encourages Plan Administrators to release information to potential Alternate Payees, including "individual benefit and account statements." It may help the drafting of a QDRO but the prudent thing is to always get the Participant's written consent before releasing any account balances. For the DOL view, see Questions 2-1 and 2-5 at http://www.dol.gov/ebsa/publications/qdros.html

The IRS has never given any written guidance on what to do when deferrals weren't stopped. Be careful. None of the options are very appealing. The ERISA Outline Book gives some pros and cons of various approaches.

Good luck. Banks don't want to open IRAs without Participant signatures. EGTRRA 2001 has a provision that mandatory cash-out of balances between $1,000 and $5,000 - where the Participant fails to make an election - will go to an IRA that will be set up in the Participant's name. This provision is not effective until the Department of Labor issues regulations. The Department has a three year deadline - May 2004. It is going to be hard for the DOL to come up with incentives for Trustees to open IRAs without signatures.

www.benefitslink.com/boards/index.php?act=Attach&type=post&id=73079

I am unfamiliar with 1.408-R There is a lot of information in 1.401(a)(9)-4 "Determination of the designated beneficiary" Also, try: http://benefitslink.com/articles/15things.shtml

If, at the time of distribution from a qualified plan, the recipient is a Non-Resident Alien, there is no SSN or Taxpayer Identification number needed. Such distributions are reported on Form 1042-S, not 1099-R. The use of an SSN/TIN is not required on Form 1042-S.

§ 1.401(a)-20 Requirements of qualified joint and survivor annuity and qualified preretirement survivor annuity. Q-27. Are there circumstances when spousal consent to a participant's election to waive the QJSA or the QPSA is not required? A-27. Yes. If it is established to the satisfaction of a plan representative that there is no spouse or that the spouse cannot be located, spousal consent to waive the QJSA or the QPSA is not required. If the spouse is legally incompetent to give consent, the spouse's legal guardian, even if the guardian is the participant, may give consent. Also, if the participant is legally separated or the participant has been abandoned (within the meaning of local law) and the participant has a court order to such effect, spousal consent is not required unless a QDRO provides otherwise. Similar rules apply to a plan subject to the requirements of section 401(a)(11)(B)(iii)(I).

S. Derrin Watson deals well with the issue in his Who's the Employer Q&A column #100 His view (matching mine) is summed up in the preface to Q&A 205: "illegal aliens should be considered employees and participants of a qualified 401(a) plan even though they are not employed legally."

Don't forget the IRS letter-forwarding program. Pages 11-12 of Employee Plan News Spring/Summer 2002. I think it is likely to have better results for lower fees. http://www.irs.gov/pub/irs-tege/sprsum02.pdf

ssa.gov Questions Miscellaneous Search Text: Missing Click on: "Can Social Security Help Me Find A Missing Person"

Search benefitslink.com for "real estate" The third item will be an old Q&A "Would purchase of unimproved real estate, on which I'll build my principal residence, come within the safe harbor for a hardship distribution?"

Puerto Rican residents pay Social Security and Medicare. They do not pay federal income tax.

Link not working May 2003. Do you have an update for this?

Go to winston.com [Winston & Strawn] Search for: OCC Click on "Compliance Issues for Retirement Plan Trustees" There is a bit on the difference between Common and Collective

I thought that "affected employees" had to be made 100% vested. "Affected employees" is not a defined term. Counsel should be consulted - some ERISA attorneys will advise that the plan does not have to go back 5 years with full vesting.

This is an employer contribution for calendar year 2002, right? It is not late [unless the plan document states a deadline for depositing the match]. True-ups are not mandatory; certainly the timing to do a year-end true-up is not possible until after the year is over. I see no need to do any interest calculation at this time.

Reish and Luftman made the original request to the DOL, because the Chief Counsel of the California Department of Industrial Relations wrote an opinion adamantly opposing negative elections. Fred Reish maintains a url on the issue at http://www.reish.com/practice_areas/EmpBen...irsguidance.cfm It does not appear that the DOL ever responded to the Reish and Luftman letter.

1.401(k)-1[d][2][[iii][[4] states that you can bypass the loan IF "the effect would be to increase the amount of the need." Would that be limited to circumstances where taking a plan loan would increase the specific hardship being applied for? Or would that fact that paying back a plan loan would be a financial burden to the participant be enough to bypass taking the loan and move right to a hardship distribution?

Comparing the 2001 and 2002 W-2 Instructions for Box 11 is all I can think of. Also, try a phone call to the IRS "Information Reporting Call Site" at (866) 455-7438.