JanetM

This is a new plan with zero contributions for the first year? Or the contribution is not made until the following year? If there is a contribution attributable to the first plan year then you will file the 5500 showing the only asset as contribution receivable. If there is no contribution for the first year of the plan why did you make the plan effective during that year? Would have been better served to make the plan effective the first day of the year you intend to make contributions.

You can't amend and "throw out" anyone already in. If you had date of hire entry and you amend for 1 year effective 7/1/03 (for example) - anyone hired up to and until 6/30/03 would be in the day of hire. Anyone hired on or after 7/1/03 would have to wait one year.

As if we have time to do anything as silly as this. Might as well go buy a lottery ticket. It is same thing - tax on folks who are bad at math.

If the amount is taxable but can not be rolled over the mandatory tax withholding is 10%. Don't have cite handy for that.

Not yet, but wonder what will happen in the near future. Since babyboomers are just starting to retire we will see the effects of the the market downturn. The class actions will start soon enough - will be interesting to see what he courts decide.

In general no. Your only entitled to the benefit you had accrued at the time of termination or retirment. Any increase in the pension after is begins would depend on plan. Plan "could" allow COLA increases - but doesn't have to. Would have to see plan language to see if they can take back the COLA given so far. Point is - ERISA will only protect the benefit accrued at termination or retirement.

A golfer is in a competitive match with a friend, who is ahead by a couple of strokes. "Boy, I'd give anything to sink this putt," the golfer mumbles to himself. Just then, a stranger walks up beside him and whispers, "Would you be willing to give up one-fourth of your sex life?" Thinking that the man is crazy and his answer will be meaningless, the golfer also feels that maybe this is a good omen so he says, "Sure," and_ sinks the putt. Two holes later, he mumbles to himself again, "Gee, I sure would like to get an eagle on this one." The same stranger is at his side again and whispers, "Would it be worth giving up another fourth of your sex life?" Shrugging, the golfer replies, "Okay," and makes an eagle. On the final hole, the golfer needs another eagle to win. Without waiting for him to say anything, the stranger quickly moves to his side and says, "Would winning this match be worth giving up the rest of your sex life?" "Definitely," the golfer replies, and he makes the eagle. As the golfer is walking to the club house, the stranger walks alongside him and says, "I haven't really been fair with you because you don't know who I am. I'm the devil, and from this day forward you will have no sex life." "Nice to meet you," the golfer replies, "I'm Father O'Malley."

It is up to the parties involved. Was in this situation in 2000, decided since I was the buyer I would file to ensure the filing was done. At that point the seller was not inclined to assume cost for audit, filing etc. good luck!

Hi all - need your expert opinions on this one. Came accross plan that uses 3% non-elec safe harbor contribution to avoind ADP testing. (so far so good) Plan design is as follows: People hired as "full time" employees are eligible to join plan on 31st day of employment. People hired as "part time" are eligible to join after completion of one year service (with the requisite 1,000 hours). Problem is some part time employees are those who work 30 hours a week, and some full time people work 30 hours per week. At first I rationalized this as being dual elibility that could be explained as being certain job classes are part time and some are full time. This is not the case -for example - order entry takers are both full and part time and all work 30 hours per week. Now this raises other questions and problems Now full time receive safe harbor at the 30 day point. Part timers who get the 1,000 hours in the year join on first anniversary and at that point start receiving safe harbor. My gut feeling is the part timers who had the 1,000 hours should get the safe harbor for first year - just like full timers. Have feeling this is bad plan design but can't place my finger on code cite to prove it. Can anyone give me hard and fast cite? Any help would be appreciated.

Chris - it is called a fast buck. TPA is going to argue the PS is responsible for qualification problems. PS is the one who will get "in trouble" for not properly following guidelines. TPA will close up shop and move on to another PS where they will continue to provide services and make money.

Well I suppose you could have deferrals - but it would be stupid to do so. Canada will not recognize as tax deferred contributions. When withdrawn from Plan the amount will be taxed. No rollover is possible because US does not recognize Canadian plans as qualifed under ERISA. Canadian income is not taxable in US if earned by Canadian citizen. If earned by US citizen it could be subject to foreign earned income exclusion - amount in excess of foreign earned income exclusion can be deferred and/or deducted on US tax return. The question is - why would canadian want to contribute to US plan? As canadians have no US source income they are excluded from coverage and ADP - if the plan document is written correctly. Look at plan, what is definition of eligible participant and eligible compensation?

No US source income - no eligible deferral. Why not set up RRSP - (Registered Retirement Savings Plan) for canadian citizens. I easy enought to do - operates like IRA. Employer just forwards funds on to custodian.

Mike, the fica & medicare are because of the "doctrine of substantial forfeiture". I am not claiming to be expert on these plans - that is why I am asking question. We have been reporting on 1099R - but now the question is - is this correct.

If the PS has history of shoddy practices I would report to DOL. The participant has the right to complain. But is it complaining based on solid evidence or is it based on isolated episodes? If PS is not operating plan properly they should be reported. But my question to you is this - who is record keeper? Is PS trying to get by cheap and having some noname payroll service to record keeping as afterthought or is record keeping done in house? Is the record keeper is reputable and knowedgeable? PS - does this plan require an audit?

How to report distribution for nonqualified pension plan. Plan is unfunded and uses ER contributions (ficticious) only. Is not deferred comp plan. EE's pay fica and medicare based on annual (fictious) contributions. How do you report? (Plan filed as top hat plan when started)

Would the participant like to share with a PS's what he/she would have invested in to not have incurred a loss or fees? As PS of 6 DC plans (and 8 DB plans) I am really tired of particpants whiny attitudes that the PS is out to get them or make them suffer. Or that they deserve a pound of flesh!

Since it sounds like this does not cross year ends - I would send it back to employer, let them reclass the amount and return it to the participant. Since W-2's not done this would be the easiest.

As far as I know they don't have to tell active employers that the plan is underfunded. If they did - they would be advertising the fact and this would not entice new employers to join. Case in point - SMW national pension fund - is disaster waiting to happen. Yet they continue to attract new employers to join - without telling them about the definate withdrawal liability.

Why do you say the PS ignored the direction? Could it be the forms arrived too late and the assets were already frozen for the transfer? Is the participant worse off ? Why not just send in new election forms and get on with life?

You said the participant marked lump sum, signed and dated the form - then sent it in. Now - the plan administrator receiveing the form would take the form and process it - given an election has been made and the form signed. We plan sponsors/administrators really do "ASSUME" participants read what is sent to them. Now - Seeing how the participant failed to follow instructions and complete the form properly - you assume the plan sponsor/adminisitrator "should not have processed" distribution. It appears to me the form was valid election - given the wording on the face. Is it legal? YES! You bet.

Did she complete the rollover information? ie: name of IRA or Plan? If that section was complete and you just failed to check the "box" it would seem you made the rollever intention clear. (In one of my plans you would have grounds for having the transaction reversed) If the forms were just signed and sent in with no indication of intent - you are stuck. (At least if the distribution came from one of my plans.)

415© is annual additions. I would infer from use of verbage that the employer would be defined under 414(B) and 414©. If they are not CG or affiliated under 414 then seperate limits apply. At least that is how I did it when I was TPA. Anyone else have comment?

You can go to PBGC web site and read the financial reports for some clue. Like Mike asked - why the interest?

Rather than answer your question directly - how about if I say the R is requried if a 1099 is issued.

I only list the terminated who termed more than one year ago - not during the current plan year. Using your example - termed in 2002 with balance. Do not list them on 2002, list on 2003 if they still have balance. IF you listed every terminee in 2002 - you will have to go back and list them as D codes in 2003. That is just extra work.