MBCarey

Can a plan match dollar for dollar on first 4% and 50 cents on the next two percent for a total of 5% match and still be within the guidelines of Safe Harbor and not be subject to either the ADP or ACP test. The extra match on the 2% would not be discretionary.

I think I've been in this business too long. Can someone tell me if for the 415 Annual Limit do you include the catch-up deferral amount? i.e. 15,500 + 5,000 + 29,500 = a total of 50,000 to max a owner out in 2007. I thought that was the case, but someone told me differently, in that the $45,000 for 2007 includes the catchup for age 50 & over.

I am embarrassed to ask this questions, because I should know. Are age 59 1/2 inservice distributions driven by the plan document or by govt. regulations?

If the participant is partially vested, can it still be done? Also, does it require an amendment to the plan?

Is it possible to forfeit a non-vested account balance when the participant terminates rather than waiting until a distribution is requested or until a break in service occcurs. The document states "immediately upon distribution". Immediately upon termination is not an option. Is it even allowed?

Is it permissable to roll money from a simple 401(k) plan to a regular 401(k) plan

If there is only one broker who receives TPA Fees of only 694.38, does this need to be reported on the Schedule C? And if so, is it only reported on Line 1 and not broken down? The instructions say anyone who receives over $5000.

We have a plan that missed making contributions for two employees when they were eligible last year because the participant did not return an enrollment form. We have determined that the client will need to make up the contributions plus earnings. Are they also obligated to file under the Voluntary Correction Program or is that only for employee deferrals.

Can someone confirm that a 5500 is not required for a ps plan with one participant until the assets reach over 100,000? Also, what happens when there are two participants, does that change the filing requirements.

Tom. Thanks for your response. My problem is that the 2 young HC's are the only ones and there are approximately 100 NHCE's who are all over the board. Marybeth

I have a group that has two young HC's and a mixture of young and old NHCE's. Is there anyway to run a new comparability formula for young HC's. It seems impossible to pass the Non-Discrim. test. Suggestions are appreciated.

We currently are working with a plan where ee's are eligible to make deferrals on the first day of the plan year after they have completed one year of service, but are not eligible to receive a profit sharing contribution until they have completed 18 months of service. This plan is top heavy so in order for the owner to make deferrals, we know that he must make a min. contribution to the eligible NHCE's each year. Up to this point, all employees have been eligible for deferrals and profit sharing. But due to some turn over, now he will have younger ee's who will be eligible to make deferrals in 2006 but would not be eligible to receive a profit sharing contribution until 2007. I believe that because they are eligible to make deferrals, then they would have to receive the 3% TH minimum. Is this correct? Also, under the same scenario but the plan was not top heavy, would the ee's who are eligible to defer but not receive a profit sharing contribution be included when doing the 70% test or could each piece of the plan be tested separately to pass the 70% test. Hope this make sense. Thanks

This is regarding vestint for a rehired employee. Original hire date was 2/8/1999 - term. dated 6/28/2001. At the time of termination, the plans vesting was 100% after two years which because the employee worked 1,000 in 2001, he was considered 100%. He has now been rehired as of 8/2005. On 7/1/2001 the vesting for the plan was amended amended to a 5 year cliff. Document states anyone employed on 6/30/2001 will vest according to the original vesting schedule and anyone hired after 7/1/2001 will vest according to the amended vesting. I know this participant's hire date needs to be adjusted to give him credit for prior service since he did not incur (5) one year breaks and he has been allowed back into the plan on his rehire date not having to complete eligibility again. But what vesting schedule should apply to him? Should he remain 100% Vested?

Thanks Tom, I think you are telling me thqt I would have to include everyone in the "otherwise excludible" test not just those who defer?

I would think that if they are considered eligible to make deferrals, then they would have to be included in the testing process. Wouldn't "otherwise excludeable" apply for eligibility and testing. Sorry if I am sounding really confused.

We have just taken over a new plan and were told that part time employees are eligible to make deferrals to the plan. However, when testing only the ones who actually do defer are counted for testing purposes. Is this right?

I have a plan that employees a husband and wife. Recently the husband died. They are both over the age of 70 1/2 and both have accounts in the plan. MRD's were not started because they are still employed. Now that the husband has passed away, we are rolling over the balance in the spouse's account to an IRA for the wife. The wife is still employed. Will the wife have to take MRD's from her husband's account? If so, am I right in saying that the first MRD must be made before the end of the year following the year the husband died? In this case 2006?

Forgive me for maybe asking a stupid question, but why would a Church Plan elect to be subject to ERISA? The assets will be both participant and employer directed does that make a difference?

We are trying to understand the ins and outs of Church Plans and have been unable to find any real guidance. We are making a proposal to a group that encompasses several churches. They would like to set up two plans 1) for clergy and 2) for lay persons. The Clergy Plan would receive a 15% across the board employer contribution and the Lay plan would have either a profit sharing or a matching arrangement at the discretion of each individual parish. Could someone tell me if: 1) They would be subject to ADP/ACP or discrimination testing, 415 limits, etc. 2) Would HC's be restricted in how much they could defer as opposed to the NHCE in the either plan. 3)Compensation of clergy includes not only salary, but housing & car allowance, schooling etc., What are the guidelines for compensation consideration in a Church Plan. 4) Will a Form 5500 be required since there will be employer contributions. And, lastly is there a good information site that will help us understanding how church plans work and what is required. Thanks

Can someone clarify for me if Rollover Money which is reported on Schedule I Line 2a(3) is supposed to show up as income on SAR. Govt. Forms is not including it so that when the numbers are added on the SAR they are incorrect.

Concerning Catch Up Contributions. I have two HC's (one owner and one not) both over the age of 50. The owner would like to defer the maximum percentage allowed for the HC group even if it means the 2nd HC can defer nothing. If the 2nd HC defers nothing is he allowed to do the catchup of $4000. I contend that the HC deferring nothing has not met any limit. Your opinions please

Tom, Are you volunteering? Tell me if this makes any sense at all? I determined the percentage of the amount of excess to the total deferrals made for the year by the participant. Then I multiplied the total earnings on the deferral account x that percentage. Example: 134.16 (excess) / 13,000 (total DF) = .01032% Total gains to deferral account - 10,613.95 x .01031% = 1.10 Thanks for your expertise!! Marybeth

Can anyone tell me if there is an easy suggestions for calculating gains on the amount of excess deferral that is returned to a participant.

We have a plan with a plan year that begins 10/1/2003 and ends 9/30/2004. I know when testing them that I use the compensation for this period, but when telling them what the max. deferral amount, catch-up and compensation can be am I right in using the figures for 2003 since it is technically a 2003 plan year?

If I neglected to enter this information on the 5500 and it has been filed. How should I go about correcting or tying the two together. I spoke with the IRS and they said to wait until the 5500 has been received and recorded then write to them. Any suggestions