MarZDoates

Assumptions: Plan year is 5/1/02 through 4/30/03. Participant terminated employment 5/24/02 with zero vesting. Plan document says that terminated participant with zero vested balance is deemed to have taken a distribution. Forfeitures are allocated in year of distribution. Assets are in a pooled account. Balance forward recordkeeping. Question: Forfeitures from this participant’s account have never been allocated. Is it permissible to go back to pye 4/30/03 and allocate the forfeiture and reallocate gains for all plan years since then? Can we “self-correct” using this methodology? Or would we need to go through VCP? We would need to reissue participant statements with corrected balances. There was one participant that received a distribution in pye 4/30/05. His vested balance would be affected…he would be due an additional distribution. Any comments are appreciated. Thanks.

If I understand correctly, if your 2006 plan year BEGINS July 1, 2006, then you have until June 30, 2007 to adopt the amendment.

If I have a 401(k) plan that runs from November 1, 2006 though October 31, 2007, does that mean that we have until October 31, 2007 to amend for final 401(k) regs?

No problem here!

#34 Sound of Music

Isn't number 3 Starsky & Hutch?

This is addictive.

I think I'm better with EB plans and Nick at Nite stuff than with this quiz!!

This one is way harder than the last one.

Are you kidding? I go to sleep every night watching TVLand or Nick and Night! How pathetic is that?

Thanks for the information.

Can anyone recommend some sort of reference material regarding welfare plans? Like an "answer book". I looked on Panel Publisher's website, but did not see anything specific to welfare plans. Would that information be contained in another publication? Thanks.

Employer maintains a self-funded health plan for >100 employees. The plan is not part of a multi-employer benefit plan that files 5500’s on behalf of all employers. They use the services of a TPA There is no trust account for the plan. Benefits are paid entirely from the general assets of employer and stop-loss insurance. Employees do not make contributions to a trust account. However, employees do pay a monthly "premium" to employer Question: Is this subject to the Schedule H and audit requirements?

It is my understanding that upon termination of a self-funded/self-insured plan, any assets left over can be used to fund premiums in the fully insured plan. (Fully insured plan is replacing the self-funded plan). Is that correct? If so, is there a citation that I can refer to. Thank you.

Thanks for the input!

We have a client that sponsors a large welfare plan. They have never filed Form 5500. It has been in existance since before 1988. We are going to file through the DFVC program. Has anyone else had any experience with filing returns that go back that far? Yuck!

I would like to reflag this post. Any ideas? Thanks.

401(k) Plan reported on Form 5500 for 2001 and 2004 amounts of 401(k) deferrals and loan repayments that were not deposited timely. (As many as 55 days late.) Plan underwent a DOL audit. Auditor calculated lost opportunity cost and lost interest for each late payment. Plan Administrator deposited the lost earnings early in 2006 at the conclusion of the audit as per the DOL’s calculation. We are now calculating the excise tax due. If I understand correctly, the excise tax is 15% of the lost earnings/opportunity cost. Is that correct? Now, my real question: Do we have to file two Forms 5330, one for 2001 and one for 2004? If so, wouldn’t they both be considered delinquent, creating additional penalties? Also, instead of completing Part IV manually, can we just attach the spreadsheet showing each date and amount? Thanks for any and all responses.

How are excess deferrals (excess of 12,000 limit, including catch up) treated in a SIMPLE IRA? Should they be refunded and a 1099 issued? Do penalties apply?

Partners make their salary deferral deposits in January for the 2005 plan year....(when their partnership income is determined). Employer deposited deferrals in excess of the 402(g) limit. Deposit went into the account in January, 2006. Can we use the amount of the excess toward 2006 deferrals? Both partners had draws in January sufficient to cover the excess. Thanks.

I understand that a safe harbor 401(k) that has only deferrals and safe harbor match is deemed to be not top heavy. Does that mean that the document can not permit discretionary profit sharing contributions? Let’s say a safe harbor 401(k) plan using the basic matching formula also permits discretionary profit sharing contribution, but the employer does not choose to make a ps contribution for a plan year…would that be deemed not top heavy since no ps contribution is being contributed? Thanks.

Has anyone considered what you will be charging to administer a Roth 401(k)?

That was my original question. Upon further research, I now see that loan number 2 is not replacing loan number 1.

How do you determine if a new loan is considered a “replacement loan”? Here are the facts: Plan allows one outstanding loan per participant. Maximum loan amount is the lesser of 50% of vested value or $50,000 (reduced by….so on) Participant takes “loan number 1” in 2003 amortized over 5 years. Participant has enough cash and pays off the balance of loan number 1 in 2005. (Maximum allowable term ends in 2008) Participant then takes out loan number 2 in 2005 amortized over five more years shortly after paying off loan number 1. (Maximum allowable term ends in 2010) No problem as far as only having one loan at a time as far as the document is concerned. Loan is not for purchase of home. The amount is well under $50k. So, is loan number 2 considered a replacement loan even though she paid off the other loan with her own funds? I am trying to determine if we need to take both loans into consideration to calculate the maximum amount of the new loan (50% of vested value). Thanks.

Thanks Lori, but apparently I didn't phrase my question very well....I should have said more than $90,000. Thanks for all the replies! I think that answers my question.