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No, it is not a violation.

Maybe this will help. The regulations under 1.401(a)(17) state "a plan may not base allocations...on compensation in excess of the annual compensation limit." 1.401(a)(17) lists the specific code sections to which it applies. They are: Code Secs. 401(a)(4), 401(a)(5), 401(1), 401(k)(3), 401(m)(2), 403(b)(12), 404(a)(2), 410(b)(2), and 414(s)(3) (IRS Reg. §1.401(a)(17)-1©(1)). Base on these references the compensation limit applies to contribution, allocations, and discrimination testing. It does not refer to payroll elections.

No, Tom. Each booth will be required to issue you a 1099.

#4 -- Pearl Harbor

Anyone know of some vendors that provide fund fact sheets for participant communication? I only know of Morningstar's Principia product. Any others out there?

For deductibility purposes try IRC 404(a)(6) which says due date of tax return with extensions. For allocation purposes try treas. reg 1.415-6(b)(7)(ii). It basically says that an employer contribution can be allocated up to 30 days after the 404(a)(6) deadline.

Is there any guidance on how to correct a situation where a participant is terminated so they can receive a distribution and immediately rehired?

I agree. Should be allocated for the 2003 plan year based on the allocation formula in the document.

No problem. Here are a couple. http://www.urangafinancial.com/sub_inside_outside/intro.php http://www.escapehomes.com/articles/Using_...Real_Estate.htm I have seen this before but I have never been able to find anything written up against this type of transaction. Sounds agressive to me.

Have any of you looked into the method of investing in personal real estate "outside" of the IRA? I can find lots of articles saying it is great but I can't find anything that downplays it.

Yes, you can still go through DFVC. I have had the same situation happen a few times. I do the DFVC and then send a letter to the IRS requesting that they waive the fee due to the DFVC filing. They waived it everytime.

Sorry, you can't do a contribution for 2004. The deadline was 9-15-05 for the 2004 tax year. You had until 10-15-05 to deposit and have it allocated for the 2004 plan year but deduct it for 2005 tax year.

Is it discretionary? If so, then the contribution was not late. There was no contribution for that given plan year.

That is my recollection as well.

Tom, no need to worry. I don't think Chris has any experience singing/writing crazy pension songs!

Are the proposed regs effective for plan years beginning on or after 1-1-2007 or do they have to be finalized before they are effective?

full year.

Depends on definition of compensation. Look in document to see if comp is excluded before participant enters plan.

Not quite sure I understand either but it sounds like there are two companies with three different plans. If so, then you would have to file a 5500 for every different plan.

You are getting the HCE definition mixed up with the key employee definition. Top paid group is used to determine HCEs, not key employees.

Not yet due to these are just preliminary talks but i do agree to get counsel involved.

Let's say for example the Virginia State Methodist Association wanted to start a plan for all of its members. The association doesn't really have any control over these churches. Is it possible to have one plan that would encompass all churches? It seems the code does allow for this but I may be misinterpreting.

A church association wants to sponsor a 403(b) plan that will cover all of the churches that are members of the association. I assume this is okay to exclude certain member churches if it is desired. Anyone have any comments or anything else I should be aware of?

I assume your new HCE was hired in 2006. If so, this person would not be considered an HCE until 2008. In 2006 he didn't reach the HCE comp limit in determining HCE status for 2007. 2007 is the first year his comp would be above the limit in determining HCE status for 2008 plan year.

I think what he is saying is that the participant can't take a normal distribution yet but could take a hardship immediately if was able. My guess is that your plan document will limit hardships to active participants.