MarZDoates

Suppose an employer that maintains a 401(k) plan in 2004 adopts a resolution to terminte the plan effective 12/31/04. There will be no deferrals, match or forfeiture allocations in 2005. Earnings will be allocated. Assets will be distributed during 2005. Can the same employer establish a SIMPLE IRA in 2005? If so, what is the earliest day that it can be established? (i.e. 60 days after notice is given to employees?) The way I am reading the regs, it appears that as long as there are no allocations of contributions or forfeitures (in 2005), we can go ahead and set up the SIMPLE. I would like confirmation of this, though. Thank you.

I'm full of questions today. I have a profit sharing plan that uses forfeitures to reduce employer contribution. What happens when the employer decides not make a contribution for the year in which there is a forfeiture? Can we allocate the forfeiture to existing participants? The document is not clear on what to do when there is no contribution to reduce. Thanks.

When a plan permits disregarding of rollover account balance in determining whether there should be a forced payout (less than $5,000), is the entire account balance forced out (including rollover) or just the portion attributable to sources other than rollover? Can you provide cite? Thanks.

Problem is I do not have a document to refer to. I didn't know if there was a way to make a calculation to get a "ballpark" amount. I do not have the answers to your questions. Sounds like I need to get more information, huh?

First let me say that DB is definitely not my area of expertise!! Can anyone give me a mathematical formula to determine the present value of an accrued benefit. I have the monthly benefit amount and the participant's date of birth and normal retirement age. My assumptions are: 1983 Group Annuity Mortality Table and the applicable interest rate is the rate on 30 Year Treasury Securities. Sorry if this sounds like a stupid question. Thanks to any and all who care to reply!!!

Whew. Had a massive brain glitche there. I thought that was correct but then second guessed myself. Thank you.

Does family attribution apply in a partnership? One partner is a more than 5% owner in the partnership. His son is an employee and a participant in the 401(k). Would the son also be considered a Key Employee? Thank you.

This is not my area of expertise....so I would appreciate any and all input I can get from you experts out there! We have a client that purchased a business. The client does not sponsor a Section 125 plan, but the business it purchased does. What needs to be done in this situation? Do the Contolled Group rules (as in the case of qualified plans) pertain to 125 plans? Thank you.

Thank you very much.

Client maintains a 403(b) annuity. He turned 70 1/2 in March, 1998. He began taking withdrawals, but not enough to meet the minimum required distributions. My questions are: In order to determine what should have been distributed prior to 2001, do I need to go back to the 1987 Proposed Regs for the life expectancy tables? Also....do I use the 12/31 balances (per his annual statements) to determine what the minimum amounts should have been. Do I need to "back off" the amount that should have been distributed? I think I've just confused myself.

The employee was not the spouse. Broker originally told the client they needed to file an EZ. I agree with you. It should have been a 5500. Assets are greater than $100,000. Thanks for the input.

Client has told us about a Keogh plan that was established in 1987. The plan covered the owner and one employee. Client "terminated" the Keogh in 2003 and transferred all assets to an IRA in 2004. Their broker has told them to file a final 5500 on the Keogh. It does not appear that the client EVER filed any 5500s. With that being the case, should they file a final one now? If so, wouldn't it be a first and a final?

So if the default date is 12/31/2003, do we have to issue the 1099 for 2003 or can it be issued in 2004? Participant obviously has already filed tax return for 2003.

Participant took a $10,000 loan in June, 2003. There have been no repayments. I have two questions. 1. Is there any kind of a correction program the employer can go through to avoid a deemed distribution? (Probably not, but I thought I'd give it a shot) 2. At what time does it become a deemed distribution if we are using the calendar quarter "cure period". Thanks.

Employer's fiscal year is May 1, 2003 through April 30, 2004. They sponsor a calendar year 401(k) plan (January 1, 2003 through December 31, 2003). What is the due date for depositing the top heavy and profit sharing contribution? Thank you.

Thanks for the responses. Son is over age 21. I have the same question as Katherine.

Two entities with ownership as follows: Entity 1: Dad owns 100% Entity 2: Dad owns 40% and Son owns 60% Would Son be deemed to have 100% ownership in Entity 1 and Dad deemed to have 100% ownership in Entity 2 due to attribution? Thank you.

Client is a partnership with two partners, no employees. It has always been our understanding that the partner's elective deferrals into their SIMPLE IRA can be made up to their tax filing deadline. I have researched 29 CFR 2510.3-102. It says that deferrals must be submitted no later than the 30th calendar day following the month in which the participant contribution amounts would otherwise have been payable to the participant in cash. However, since we have not yet determined what the partner's income is, what becomes the deadline for depositing the deferrals? I have also read some prior posts, but am still having difficulty in determining when the deferrals must be made. I was told that the "preamble to the DOL Plan Asset Regs" addresses this issue. I am having difficulty locating the preamble. Can someone please point me in the right direction. Thank you very much.

Employer sponsors a profit sharing plan. He is the sole owner of a medical PSC. His wife is an employee of the medical PSC and also owns 100% of a separate S Corporation. My question relates to controlled groups and constructive ownership. Section 1563(e)(5) says that an individual shall be considered as owning stock in a corporation owned, directly or indirectly, by or for his spouse...except in the case where the individual does not own directly any stock, is not a director, etc. etc. Who is considered the "individual". Would it be the owner of the medical PSC sponsoring the profit sharing plan? Thanks.

Participant took a hardship withdrawal in 2002. Employer did not stop his deferrals for the six month "waiting period". Deferrals that should not have been taken out of participants paycheck were refunded to participant in 2003. Is this considered an excess contribution for which code 8?

Thanks, Mike. That's what I needed to know.

Employer has made contributions to a profit sharing plan in 2003 which caused three participants to exceed their 415 limit. I understand that we can either reallocate the excess among the other participants or hold in suspense to be allocated to three participants next year (2004). My question is: if we hold in a suspense account versus reallocating, can the employer still take a tax deduction on the excess for 2003? Or is it deductible in 2004. Will it be subject to excise tax? Based on the research I have done, it is not clear to me. Thanks for any and all input.

Thank you so much!! Have a happy holiday.

Is the "recalculation of life expectency" election still applicable with the new 401(a)(9) regs?

Honestly I do not know why employer wants to terminate. Your idea sounds good though. I will bring up that point! Thanks.