FJR

I know I am confusing myself, but for coverage aren't you segregating the componants of the plans. For the 401(k) portion, if everyone who is eligible to defer than how can you fail coverage. Same goes for the match?

Husband ones 50% of company. Wife and son also work for the company. Husband transfers all stock ownership to son in 2001. for top heavy test for 2002, is husband and wife included as Key? Thanks.

If this plan let people in with less than a year, can you also segregate the < than a year of service from the ones with a year for coverage purposes? Tom, did you mean 70% of NHCE is one plan or both?

So what you are saying is, you can have a employer only 403(B) document for the NP to fund the employees on a discretionary basis. In your experience, what type of document do you use? A prototype? Can I go to Corbel and get such a document? Cost is the essence with this client. Thanks..

I have a new non-profit client who has a typical arrangement with a custodian. The employee establishes a contract to defer their salary pre-tax. No plan document with the employer. The employer wants to contribute a discretionary amount of money each year. Can they establish a Profit Sharing trust in order to accomplish this? They are a 501©3 Org. I would appreciate any suggestions. Thanks

Do the catch-up contributions for those 50 years old under EGTRRA apply to 403b)'s?

Hey look at it this way, you might not need any incentives after bush's Retirement-Plan Changes. You won't have any employees left....That Pizza party is looking better and better. Naked or not.

Is there any rule to having to stop 401(k) contributions when a participant receives a court order to pay Child support?

T-shirts with your company name

Let me clarify. The plan is a SARSEP. The two highly and Key employees defered compensation to the plan for 2002. The NHCE also defered. They are top heavy. Let assume they pass the ADP test. Wouldn't they owe a TH min.? If so, you are saying they could make to to the new profit sharing plan set up in 2002. I assume it would go to only those eligible under the SARSEP? If they can contribute to the new PS plan, and the EGTRRA amendment is signed, they really wouldn't have much of a deduction problem since the only contribution was made through salary deferrals.

Does the naked pizza party come with party hats?

Pizza Party

We inherited a new client in 2002 who has an existing SARSEP. They adopted a new Profit sharing plan at the end of 2002, presumebly to fund it with an employer contribution. I don't know to much about SARSEPs, but can the following occur. Assume the prototype document allows for the adoption of a qualified plan in the same year. Also, no employer contribution has gone to the SEP. Assume they are TH. Can they simply fund the Profit Sharing for 2002 to include those who were eligible under the SARSEP and not fund the SEP? If so, I assume they can use permitted disparity under the Profit Sharing plan? Anything else come to mind would be appreciated..

When a plan accepts rollovers from another qualified plan, does the plan accepting the rollover have to provide any reporting to the IRS. The previous plan will produce a 1099-R indicating the amount was rolled over to a Qualified plan. Wasn't sure if TPA or someone else needs to do some type of filing. I know IRA accounts report it on 5498. Thanks

Mike, I appreciate the help. Your first statement on whether it is a controlled group should be clear in the bold section of the thread "Two plans in a controlled group". The other part I want to clarify. The client wants to start a new plan for 2003. If Company A is offered a safe harbor plan and all 125 NHCE's have the ability to defer, you would pass coverage. You would also pass coverage under 401(m). Company B has no HCE's and all NHCE's have the ability to defer. That would pass. Do you have to aggregate the plans or can they pass seperately? Thanks

Is it possible to have company A and B who have common ownership to have the following and pass coverage, etc. Company A has 4 HCE and 125 NHCE with a safe Harbor(Match) 401(k) Plan. No required testing necessary. Company B has no HCEs and 250 NHCEs with a traditional 401(k) and no match. Does this pass 410(B) 401(a) etc...? Any thing els to watch out for?

There seems to be a lot of Buzz out there on individual (k) plans, those marketed to the self-employed with no EE's. My question is what makes this plan different. Seems like we can use our regular prototype document and create the same thing. No need to have a "special" type of document. Any thoughts.

Blinky, I thought that the 25% limit is based on NEI which doesn't include any of the contributions made on behalf of the self employed individual unless it is made on behalf of a non owner.

I may be confusing myself, but here is the question Lets say for 2002, you have a sole prop. who earns 50,000. They establish a 401(k) with all the required EGTRRA amendments. My calculation is you would take 1/2 the SE tax which would leave around $46,500. My question is can they contribute the 11,000 deferral + 25% of the $46,500(another $11,500) or can you apply the 100% or $40K limit of comp for 2002 which would then be a total contribution of $40,000?

Does this work for plan year ending 2002? Husband and Wife have a 401(k) plan with no other EE's. Plan has been updated with EGTRRA amendment. Husband salary $250,000 Wife = $30,000 Each are over 50 in age. Each puts in $12,000 by 12/31/02 Husband gets total contribution of $41,000 Wife gets a total contribution of $29,500 $230,000 X 25% = 57,500.00 + $22,000 = $79,500(Total deductible Cont.) $2,000 in Catch up contributions wife gets the $17,500 + the 12,000 in 401(k) contributions ?

Can the spouse of a owner who is set up as a sole proprietor filing as an LLC, participate in a FSA?

can you point me to any language that spells that out?

Any reason why a single plan sponser with no ee's can't receive the tax credit for starting a new plan in 2002?

We have a takeover plan where the previous admin. did some pojections for 2002. I assume plan has been updated for Gust/Egtrra. Integrated profit sharing plan with two employees. 200K for one and 20k for the other. 25% would be 55,000. They allocated 40k to the 200k emloyee and the rest went to the other. This would represent 75% allocation. Is this right? My feeling is the deductibility is correct, but not sure if you can get away with the allocation if it is an intrgrated plan. The 2 ee's are husband and wife. Thanks

I will be more specific. AP gets 100 k as of the date of divorce, plus any earnings or losses thereon, from that date of divorce through the date of transfer(pro rata). It concludes with, "Regardless of investment experience, the amount transfered shall be no less than 100K. Participant accounts are valued every 6 months and everyone shares in the same gains or losses pro rata as a pooled account. No daily val. or participant direction. Balance forward accounting. My opinion is the participant will be the one that gets hurt with the loss and not the rest of the plan participants. Maybe it should just read 100k with not interest. Sounds like the same thing. Lastly, who decides the date of transfer? Thanks!