Hoard1

I have a Plan that in the document does not suspend 401(k) contributions for 12 months for employees who take hardship distributions? Is this permissable?

Employer sponsors an old SARSEP. For PYE 1999 they would like to establish a Profit Sharing Plan effective 1/1/99 with ahe 401(k) feature effective 1/1/2000 SARSEP will terminated 12/31/99. Other than combined 404415 issues is there anything else I should be aware of.

To complicate this. If employer adopted the the SARSEP on form 5035A-SEP this would preclude sponsoring another qualfied retirement plan. Would adopting the QRP effective 1/1/99 invalidate (disqualify) the SEP for 1999. What are the ramifications of this? Is there a work around? It think one option might be to restate on a Master Proto-type or individually designed document. ANy thoughts?

Does anyone have a safe habor Notice they would be willing to share. Thank you

So, the 415 catch up can be used by anyone and can include deferrals. The 402(g) catch up must be for employees with 15 years of service.

Since these would be 402(g) contributions in excess of 10,000 or 10,500 would not the 15 year limit be applicable?

An employee with over 15 year of service with a qualified organization would like to make the maximun catch up deferral contribution. Is it caculated as: 20,000 * 25% + 4,000 = 9,000 for 415 purposes?

It is my understanding that if you use one of the safe harbors to pass ADP & ACP you MUST gross up contributions at end of year.

Dave more like the opposite. For example employee make 10,000 a month and contributes 10% of pay. Match is 100% up to 3% of compensation In month 10 contributions stop @ his 402(g) limit. At year end he has 120,000 in comp but only 3,000 in match. Our intrepretqtion is that he needs 600 to get his full match for the year. Payroll company is having a problem with this.

I am having difficulty with a payroll company. We believe we must gross up matching contributions at year end for employees who front loaded contributions in 1999. Definition of comp is w-2. The payroll company wants a cite because their system is not allowing it. Help.

If a Plan is effective 1/1/99 but deferrals commence 12/01/99 can the testing period for ADP and ACP contributions be 12/01/99 to 12/31/99. Thanks Cites would be great.

Yes, I have done those type of Plans. My current question is does such an arrangement require an individually designed document to specify that contributions can be made in different amounts to different specific- groups of empolyees or is a discretionary difinition sufficient and you use a Board of Directors Resolution to specify the $ amount of match to each group each year.

I think the Plan would have to have the different groups of employeees at least referenced in the plan document (or at least mention that they exsit) so that any contribution could be allocated in accordance with the plan document to the specific group. This would most certainly put you into an individually designed document. Any thoughts?

If a Plan has no HCE's can the matching formula be different by pay group, division, job title etc....? Thanks

Is there a cite or some basis I can refer to if questioned on this approach?

I work with several Law Firms in both San Antonio & Austin Texas. In Austin due to the growth of the high tech market which is putting in plans with no eligibility or vesting provisions there has been a change of design of all types of plans including law firms because of the desire to attract qualified canidates.

A group of Doctors started their Practice on 10/1/99. None were previous owners in the PA's they came out of. Can they make their Plan effective 1/1/99 to get a full 415 limitation for 1999 even though the Practice was fromed on 10/1/99.

It is my understanding that the 3% Elective Safe Harbor Contribution satisfies the Top Heavy minimum requirements but the matching safe harbor does not. Is this correct?

Employer is looking to write a Plan which excludes all Key Employees and Employees in certain job clasifications. I've been told that the IRS office in Ohio has been rejecting this approach claiming that you are imposing a defacto eligiblity requirement under 401(a). Does anyone have any thoughts on this or persoanl experience.

A DB Plan document allows for an employee who has reached NRA under the Plan to segregate the PVAB in the Plan. How does this impact funding of the plan. Can you run a seperate cost caculation for this individule? What the client woulf like to do is have the segreagted assets only available to pay benefits for the doctor who has reached NRA. Is this possible.

An employer failed the do the 20% withholding for a harship distribution in 1998. How is this reported to the IRS (945)? Is there a excise tax penalty and how is it reported to the IRS (5330)? I believe that employee will have to amend their 98 return to reflect excise tax due on permature distribution. Any comments or thoughts from those who may have encountered this.

Service is requesting to see 1120's for past three years. Can they request these?

Unfortunately, client would like to fund the plan and deduct the contribution. Looks like they will have to do it over two years. Thanks for the help.

Has anyone seen a good comparison marketing piece on these three types of plans I started to do one and realized I might be recreating the wheel.

Would anyone be willing to share examples of the engagement letters they use for new clients and for ongoing clients? I can be reached at: jay.scholz@padgett-cpa.com