JanetM

Reading the Nondiscrimination Answer book, Q 17:35 If the former entity terminated a plan, the distributions from the plan would be considered during the applicable determination period. [ Treas Reg §1.416-1, T-6, Ex 2] This doesn't say spin-off but seems to me you would look back to former plan.

To make them whole with bonus, don't forget to gross it up for taxes.

If I understand you issue, you didn't include the 1099 form or the amount as income? If you forgot to attach the form that is minor detail, if you forgot to include it in income that is big problem. You will have to file an amended tax return to fix this. You should do it before the IRS send you a deficiency letter and applies interest and penalty. Don't forget the 10% penalty if you are under 59.5.

Is A setting up new plan to accept assets? If they are, then contributions for the year ended 6/30 would be paid to new plan.

Get a couple room mates to help pay the bills.......

First question is were the assets included in plan assets for 5500 reporting? If they were you could show that it is a simple error in account title. I don't think this is qualification issue (but I could be wrong). This happened many times with clients - lawyers and doctors mostly who had the SDB plans and it was never a serious problem.

If the 12K he has put in is the limit under the plan since additional will be refunded, he has triggered the 4K catch up. His profit sharing could now be the 30K to get him to 46K. Am assuming this is sole prop in small p/s plan since you mention p/s.

Probaply not, depends on how the company was structured. The plan has to have a sponsor - sole prop, corporation, partnership............... Is there some sort of entity left? If there was a corporation that sold assets but corp entity has not been disolved then you still have a sponsor. Sole propietor who sold assets but still has something to report on schedule C would still be able to sponsor plan.

I was only speaking of periodic, not non-periodic. Could the rules be different for the two types? Pax, you are saying that NC allows no withholding Says right in your post, unless you elect no withholding. Maybe this is semantics. Anyone can elect any withholding they want. You can't withhold from them if they elect no withholding. If they make no election regarding withholding you are required to withhold - and it varies by state. I don't think Northern gives out incorrect data at all.

I was only speaking of periodic, not non-periodic. Could the rules be different for the two types?

Kirk, just thinking that it takes time to think of some of these clever comments. LOL

That I don't know, case law. You have a mess, find an attorney who knows this area quick, you will be better off doing that then trying to do it yourself. You can notify the plan sponsor that the DRO conflicts witht he Decree and that your account should not be distributed until this is sorted out. The Q in QDRO is only recognized when the Plan sponsor says the Q is proper. Until then it is just a DRO.

Well IMHO not everyone is an expert in every area relating to retirement plans. Seems like mistake on their site. I don't know of any change for 2006, but 2005 still allows partnership to file 5500EZ. The thing that makes me sit up and take notice is they keep referring to 5500 as a TAX RETURN when it is ab information return. There is no tax due with 5500, now a 5330 is a tax return (but they don't mention this).

We use the bank for making benefit payments made from our many pension plans. I asked the same when we started using this system many years ago. The folks at the Bank say that all states allow you have no withholding. They added to that recently when NE changed their withholding to be the same as federal effective 1/01/06. Now they say for NE - the with holding uses the same status and exemptions for federal amounts unless the participant elects to have a different state withholding. At this time we have about 12,000 folks getting checks each month. I have never had problem with the way the state tax has been processed and in 7 years have never heard from any state where I retirees live. (last count that was all of them, Puerto Rico, Canada and Mexico)

Lots of case law on QDROs. You need Attorney who knows how to write a DRO. If the Record keeper has been sent the QDRO you need to stop them from making the distribution to Alt payee until this is settled. You better move quick, if you drag your feet you ex will get the distribution from the plan based on the bad QDRO language. Just a thought, didn't your attorney read the DRO the other attorney wrote? That is what you paid them for - look out for you interest in this, right.

Here is list done by our Bank. 2006_StateRegulation.pdf

Am thinking most of you have too much time on your hands.................. thanks for the smiles and chuckles.

IMHO you will still have to pass ACP test since this isn't safe harbor match.

Treasury reg 1.401(k)1 gives the rule, so my take would be the regs changed.

I think it comes down to personal choice. Will you like what you would be doing for the new employer? Are you disciplined enough to save on your own? My view is that if you are unhappy & stressed over your work it affects you and your familiy.

A few quesions first. Does the FD or the company offer any sort of retiree health benefits? Those are worth big $$. Are happy with your current work? Just because a job will pay 20 to 30K more doesn't mean you will like going to work. (And of course you will be in higher tax bracket that will eat up lots of the increase) With that said, in 6.5 years you will locked in a pension for life of just over 40K. How long would it take you to save that much in 401k or profit sharing plan? Just as an example using calculators on the web, if you had $250,000 you could draw 40K a year for less than 7 years before you run out of money. (assuming 6% return)

I think the trust held by your VEBA is a DFE that will file both 5500 and 990. I had one of these arrangements a few years back when you first had to file 5500 for MT and our counsel decided it was a MT arrangement. If you don't set up the MT inside VEBA you will have to include all the underlaying asset detail on Sch H. If you put in MT you can list all assets all on 1c11 and earnings on 2b8.

What about earnings on the excess amounts? Are you going to have issues with that?

Yes, as long as they were a participant in As plan when they left. In general, since they don't have 5 one year breaks you can't disregard prior service. Keep in mind the break counts only they don't have more than 500 hours in plan year. The break would be less unless they left on 12/31 and returned on 1/01.

Those were both great, you have made me smile and brightened my Friday!