MarZDoates

I know I should know the answer to this, but am drawing a blank. When determining the HCEs for 2005 (determination year) ... comp greater than 80,000 in lookback year, as indexed... would you use the COLA adjusted amount in effect for 2004 ($90,000) or 2005 ($95,000)? For example if employee's wages in 2004 were $90,000, is he an HCE for 2005? Thanks.

Employer wants to amend the service requirement in SEP plan FROM "service in three of last five years" TO "service during one of the preceding 5 years". By when must the amendment be executed? Is there a cite that I can reference? Thank you.

She was rehired in January. The omission was not discovered until October. Do you have a cite that I can reference? Thanks.

Eligible employee was not given the opportunity to make salary reduction contributions to 401(k) in January, 2005. It is my understanding that the employer must make a QNEC in an amount equal to the average deferral for the NHCEs. (She is also an NHCE). Is that correct? Also, is there anything we need to disclose on the 5500 about the omission? Thanks.

Can an employee eligible to receive a SEP contribution elect not to receive it? All eligiblity requirements have been met. Not a SAR-SEP. Thanks.

Same issue has come up with us. Except it was discovered on a Form 2848 Power of Attorney that the EIN does not match the plan. Plan is under IRS audit for pye 12/31/02. What to do?

What is the fraction one?

Gee, I see you are a tea totaller. Double or nothing.

It's tax season for crying out loud! Hey, What...I PMd you.

In a Safe Harbor 401(k), is the employer 3% non-elective contribution tested under 401(a)? For example, if a participant receives only the 3% non-elective and not part of the discretionary profit sharing (due to last day of plan year requirement), do they still "benefit" under 401(a)? Thanks.

Sweet! I knew I saw something somewhere. Thank you SOOOOO much!

Participant's last day of employment was 12/30/05. Since 12/31 fell on a non-business day, does that mean 12/30 was the last day of the plan year? Participant must be employed on last day of plan year to receive an allocation of profit sharing contribution. (Calendar year plan.) Thanks.

Does the requirement that a plan be amended to permit hardship withdrawals pertain to those plan sponsors not in the affected area (Katrina)? We have several plans that do not permit hardship distributions, but they are not in the affected areas. Thanks.

Does anyone care to take a stab at this?

Beneficiary of plan participant disclaimed a portion of the pension benefit to go into charitable remainder unitrust. Does the pension trustee report the distribution to the trust on a 1099-R? The other portion was rolled to IRA in beneficiary name. The beneficiary will receive a 1099 for this part.

Plan permits any participant with account balance =>$10,000 to have a segregated, self-directed account. Everyone else stays in a pooled account with Trustee investment direction. Currently 65% of the NHCEs have the ability to self direct. 100% of the HCEs have the ability. Is this discriminatory? Is there a specific percentage of NHCEs that would have to be allowed to self direct that would not be discriminatory?

For those of us that have already sent out our safe harbor notices, should we send out revised ones or not? So much for trying to be efficient.

I think Corbel's website does.

Let's assume that we have a partial plan termination. It is my understanding that the participants affected (those who are no longer employed) will be 100% vested. Is there anything else that needs to be done to the plan. Thanks.

It is my understanding that you can freeze a 401(k) and start a Simple. If we freeze as of 12/31/05, can the SIMPLE be started 1/1/06? What about notice requirements? What if the 401(k) is terminated effective 12/31/05, but assets aren't distributed until 2006. Can we have a SIMPLE for 2006 in that case? Thanks.

We do not foresee disqualification, but could be some penalties/excise taxes imposed on late deferrals.

We have a 401(k) plan that is being audited by the IRS for the 2002 plan year. We have several participants that terminated employment in 2005 and will be due a distribution after the end of the plan year. If the audit is not finalized, is there any reason we should not go ahead and distribute assets to terminated participants?

Is anyone aware of any type of software available to perform non-discrimination testing in a cafeteria plan? Thanks.

IRA owner already begins taking RMDs. Designated beneficiary is spouse (7 years younger). IRA owner dies in 2005. Is it correct that the remaining RMDs will be calculated using the spouse's life expectancy and the Uniform Lifetime Table? Thank you!!

Just checking. Has anyone heard anything since August about the release date? Thanks.