James Matt Ullakko

Question about minimum distributions: Assume participant is required to take minimum distribution withdrawals for this year. Can this individual waive or modify the federal and or state tax withholding? Also, withholding refresher would be appreciated - rollover eligible drives all of the tax withholding options on distributions, yes? Many thanks, Matt

If you are using pre-approved document and fortunate enough to be using a document database to create your adoption agreements, I'd make the argument to just restate, re-execute, & replace all of the prior docs. Otherwise, you have separate amendments laying around and it becomes a burden to keep track of, for the plan sponsor and the service provider.

What if these pension assets were from Pre-ERISA Money Purchase Plan? Could you invade through in-service? I seem to remember some sort of provision dealing with this outlined in the ERISA outline book, but I'm too lazy to look it up. Anyone know off top of head? Thanks.

Quoting a prior reply from previous post about a month ago: "Years ago the IRS took the position that allowing 401k deferrals to continue after the 401(a)(17) compensation limit had been reached was in effect recognizing compensation above the comp limit and thus disallowed. This contradicts the conclusion I am reading on the replies here, does anyone have a site or other reference to support the allowance of 401k deferrals after the comp limit has been reached?" As I understood the original question - seemed to be asking about very low deferral election in place throughout year - maximum deferrals reached before 402(g) limit exhausted because individual hit the compensation limit. Could this individual continue to make deferrals on compensation earned for remainder of year, even though that compensation is above the limit imposed by 401(a)(17)? It would appear any subsequent deferrals for the remainder of the year are being made on compensation earned above the comp limit, unless it could be argued that the deferrals made thus far were not consistent with what the intended deferral election was to begin with... Any comments?

If you don't mind me asking...what did you have to do in order for the general testing report to indicate pass looking at ratio test and not average benefits test? I am curious to know as we are very likely to be up and running with them for 2005, and I've yet to see an actual cross test in motion on that system. Additionally, anyone use their proposal software?

I should have started my own post... I'll be doing that now.

How about file the return before 7/31 without taking into consideration the profit sharing dollars that have been decided upon to be made before their corporate extended tax return is filed? Meaning does one really have to file amended return in situations where the filing already went out without all those reporting years' worth of accruals factored in? Just pick them up in the following years return and do so consistently going forward?

Yeah they take an equal salary among the highest tier of compensation in their organization. Thank you Tom and Blinky.

Which HCE's have to be picked? Top Paid Group in effect, I understand rules regarding Rounding to be consistent and don't be discriminatory. However, what about this situation: Lookback year comp $200,000 - defers in limitation year $13,000 Lookback year comp $200,000 - defers in limitation year $0 Lookback year comp $200,000 - defers in limitation year $13,000 Lookback year comp $120,000 - defers in limitation year $13,000 Lookback year comp $80,000 - defers in limitation year $0 Lookback year comp $70,000 - defers in limitation year $0 Lookback year comp $60,000 - defers in limitation year $0 Employer establishes policy to consistently round up to whole number if 20% falls on a fraction - they reason that you cannot have a fraction of a person so they will just always include one additional person in the Top Paid Group if 20% is not a whole number. Above information would yield 1.4 so they need to pick 2 HCE's to include in the Top Paid Group. Which two of the three $200,000 earners should they pick? Example in Sal Tripodi's book only address's fraction scenario for how many to include in the TPG. I'm wondering what you other practicioners are doing to choose identically paid HCE's that have varying deferral rates? Any help much appreciated.

Is the 20% mandatory W/D rules clear with respect to installment payments? There are no exceptions for installments are there?

Thank you all for your insights.

Plan's NRA 65 Plan's Early Retirement Age 60.5 --------------------------------------------------- Is it true that normal retirement age must be defined at least 59.5 thru 65 maximum? If plan has early retirement provision, does this mean that the retirement distributable event is the early retirement age (provided that this is 59.5 - 65)?

Thank you for the insight, you are reading right into my situation perfectly. I have not found any languange giving guidance on which plan would satisfy the minimum allocation, but at least that means that neither is stating that the benefit will be satisfied in the other! That sounds like a major design problem. Once again, thank you for your knowledge. Matt

Thank you much, that certainly helps me understand the "money purchase plans may be obsolete" phase going around lately. Thanks.

I am asking for someone's help clarifying some of my interpretations regarding minimum benefits for all Top Heavy defined contribution plans for which a participant is covered. And I have a couple of questions following... We are testing a companies' Profit Sharing and Money Purchase Plan. These are paired plans. If I interpret correctly the minimum benefit for all defined contribution plans maintained by an employer is 3%. So, if someone is covered under more than one Top Heavy Defined Contribution Plan the minimum benefit is satisfied by either the non-elective cont. in Profit sharing plan or the required cont. in the MP Plan, provided it is at least 3%. It is not required for each plan to make 3% cont. 1. So, is it always the case that the 3% minimum can be satisfied in either the MPP or the Profit Sharing Plan for any year in which either plan is Top Heavy? 2. Does it need to be stated clearly in Plan Document which plan the minimum benefit will be allocated provided either or both paired plans are Top Heavy? What does it really mean to have a paired plan? Are there some kind of testing advantages for having paired plan or is this just a referrence type of notation indicating that the plans are maintained by the same employer? Any help is much appreciated!