Jim Chad

Yes, since SBJPA. After 1996 tax exempt organizations have been able to have 401(k) Plans.

Yes. I would suggest you write him a letter first, and mail it certified. You should state that you are requesting information on your balance in the Plan and how to roll your account to an IRA. ( You may later decide to withdraw your money, but this is a good way to start) If you roll to an IRA, the employer will not withhold for taxes and you will not have that additional fight. You might mention what you will do in 60 days if you get no satisfactory reply. If you do not get a reply in 60 days, call the DOL (Department of Labor) one phone number you might try is 202-219-8515 or 606-578-4680. These offices will be able to tell you exactly what DOL office you need to call and the correct phone number.

For eligibility, all service with this employer would be counted, even service before the Plan was set up. So if your eligibility requirements were 1 year of service and age 21, all employees who have met this would come into the Plan on 1-1-07. The employee hired 12-20-06 would not come in until 1-1-08 if you have the usual dual entry dates. What people usual mean by dual eligibility is when you have these eligibility requirements and you put a paragraph in the document waiving them for anyone employeed on a certain date. Then when you hire someone after that specified date you have two groups of empoyees with different eligibility rules. One group had immediate entry and the other has to wait one year.

Let me play the devil's advocate here. If he comes back next summer, does he have any options as far as not paying the taxes? We will be past 60 days, so too late to rollover to an IRA. It sure looks to me like he will have cause to hold me or his employer responsible, especially since he said he is coming back.

Are they retired on the last day they work or one year later? My situation, 71 year old employee left 11-8-06 and doesn't want to take any money out. He is planning on coming back next summer for the busy season. If he does and I have paid his RMD by April 1st, I have caused him unnecesary taxes. If I don't pay him (his health is not good) and he does not come back, I have missed the RMD. Further question along these lines, If we are supposed to use the last day worked as retirement date, how will we spot the people who retire late December. I do the RMD's for all of my Plans long before December 31st. Do other people look at all 70 and a half people again during the first quarter? I sure hope someone can give me a cite showing that I can wait until he is gone for a year. I haven't found anything under break in service rules yet, but I am still looking.

I think I may be saying the same thing, but I would word it this way. When you "freeze" a plan by stopping all contributions, you have not terminated the Plan. The Plan is not terminated until the day all assets are out. If, for exammple, you freeze deferrals in March and pay everyone out in June, I think you would have a short year and in the ADP test you would have to use half of the 401(a)(17) compensation limit. (remember the deferral limit of $15,000 is per calendar year and as nothing to do with length of Plan year ) What does everyone else think?

Do you know if Adobe will let me create the 82 seperate pdf files as one operation? And do you have any ideas about how these could be efficiently sorted into file cabinet CS?

A non title one plan does not to deal witht the DOL for 5500's. My experience with the IRS is if you turn yourself in, they will abate all fees and penalties. I would include in with 3 years 5500's, a letter explaining the oversight and how arrangements have been made so it will not happen again. Here is a letter I have used. I don't know if the address is still the same. Department of the Treasury October 24, 2001 Internal Revenue Service Memphis, TN 37501 RE: , Inc. Cafeteria Plan. 5500 2000 EIN 38- Dear Sir or Madam: Here is the form 5500 for the 2000 plan year. This is the first one filed because of confusion over who was taking care of this. When this plan was set up, there was confusion over who would actually prepare this form. We recently discovered this oversight and immediately prepared the form. Steps have been taken to ensure that all future filings will be completed on time. Internal Revenue Code Section 6724(a) states that "no penalty shall be imposed under this part with respect to any failure if it is shown that such failure is due to reasonable cause and not to willful neglect". The good faith effort on the part of the employer is shown by their initiative in taking care of this. For this reason, we respectfully request that all penalties be waived. If there is anything I have not made clear, please call me directly. Thank you for your consideration in this matter. Sincerely

Whether you are using current or prior year testing has no bearing on determining who is an HCE. The determination is always based on ownership or compensation in the prior year (with this or a related employer) So, on January 1, 2006 we can tell whether or not you are an HCE for 2006 based on your compensation in 2005.....unless, of course, you become an owner sometime in 2006.

We use access and outlook for my palm and for a database to do mailmerges. When we mailmerge a letter, we save a paper copy in each client file. Does anyone have a decent way to save a copy electronically?

Archimage, I found the answer!!!!! When I go to: File Print The print box comes up and I choose the "Printer" called file cabinet CS. Then another box comes up. When I uncheck the box next to the word printer at the top left, I do not get a paper copy.

We are heading towards paperless and are starting to use a software called file cabinet. (FWIW, there are some really neat features in "file cabinet") My situation: When I am in excel or relius administration reports, the best way I know to save to "file cabinet" is: File Print choose a printer called file cabinet CS This works to save to file cabinet in the right drawer and right folder. But it also prints a paper copy on my HP Printer. My question: Does anyone know how to stop a paper copy from printing?

For that you will need details on what work for the other company the employees of the real estate company provide: Then I would go to "Who's the employer" by Derrin Watson. I highly recommend it. If you don't have that book I would suggest the "ERISA Outline" By Sal Tripodi. Unless you are smarter than Einstein and Stephen Hawkins combined, I would not recomend trying to sort this out referring to the code.

I was surprised no one had answered this question until I thought about it. There is no answer to your question in the regs because your 401(k) administrator is not handling this right. This error is not a distributable event. The money should not have been given to the employee from the Plan. It should have been forfeited and he should have been made whole outside the plan. This isn't as bad for the employer as it looks like at first. There are many ways he might use the forfeitures that will decrease his expenses in other areas.

This may be being too picky, but with all of the dailly val plans out there, I would say: yes, unless there is a later valuation in calendar year 2005, for instance a 12-31-05 valuation.

For retirment plan purposes, these are not "a Group", affiliated service, management or controlled. Besidess this point, usually the real estate company has no compensation paid and no employees. So usually I don't need to spend much time looking at this. Hope this helps.

Austin covered the 415 limit, but I want to remind you to think of the limits on deductibility under Section 404. The short version of that rule is that the company's maximum deduction is 25% of the comp of all eligible employees plus all deferrals (including catchups).

This may be hard to explain to them, but I think the plan allows the flexibiltiy to do what they want. For example if the doctors each want to defer taxes on $15,000, there will be some smaller deferral combined with the match which will equal $15,000. Maybe it will be $7,500 deferral and $7,500 match. This would require no change to the document and would save some payroll taxes, too.

402(g) is only about deferrals. So you are correct. QNECs would not count toward it. The site would be 402(g) of the Internal Revenue Code.

I find it easiest to think of it as one company with several divisions. Then run all of the normal tests. 1. Classify all workers as a] nonemployees b] statutory excludable, (because of union, age or service, terrminated with less than 500 hours etc.) c] nonexcludable employees 2. Classify nonexcludable as HCE or NHCE 3. Perform coverage testing 4. Normally the next step would be to see if it is a design based safe harbor Plan. But if the document will let you exclude some of the companies (divisions), I believe it cannot be a design based safe harbor Plan. Maybe step one should be confirm that the document will let you do this. 5] do the general test for contributions or benefits (cross testing) 6] Do nondiscrimination testing for benefits, rights and features

One more thought, are all of the HCE's in the semimonthly group? Personally, I wouldn't care about waiting 2 weeks for my money to get invested in the funds I have chosen. But I wonder if an auditor had a real attitude problem, would this be consedered a benefit, right or feature. If my guess is right about all of the HCE's being in the semimonthly group, I can think of an easy solution. Make the deposit on th pay day of the biweekly group and include any undeposited money from the semimonthly group at that time. With auditors, IRS or DOL, you can seldom go wrong giving the NHCE's a better deal than the HCE's.

From what I have read and heard on audits, the DOL is mostly concerned that the employee money gets seperated from the employer's assets ASAP in case the employer goes broke. Your idea of sending the money twice a month seems reasonable to me. But I do believe the DOL would be happier on an audit if they saw the money moved to a seperate checking acoount on payday. At least this as been the priority of the auditors I have dealt with.

The ERISA OUTLINE By Sal Tripoodi is around $400 for each edition. I buy it every other year and think it is well worth it. I think you can order it off of the ASPPA website. I have also heard a lot of good about Corbel's Pension library.

Where you say bi-monthly: did you mean semimonthly? Here are a couple of ideas. 1. Do each payday. I have some employers who pay weekly so they go onto the website and input the data 4 or 5 times per month. 3 times per month isn't too bad. 2. On each payday, transfer the dererral amount to a 401K checking account. Then you can once a month move all of the money and all of the data to the investment company. Note: this checking account needs to be in the name and tax number (EIN) of the 401(k) Plan.

The first one seems easy. This seems to be a mistake you would correct by transfering the funds plus gain/loss to the Money Purchase Pension. Just make sure the money is never in the account of the employer in the transfer process, not even for a minute. As for the second question: I believe the conservative answer is for the Employer to make up the missed payments. I am quite sure this is the correct answer if we were in the next tax year. But it seems to me, that since you are in the same tax year you could increase the EE deferrals for the next 8 pays so they have a deferral of 2% for the year. I am looking forward to hearing other opinions on this.