Basically

I understand that the plan can not accept deferrals if the document does not allow it... you need to run the plan based on the doc. The participant did receive the deferrals back with earnings, but 2 years later. GBurns.... are you saying the return of his deferrals can simply be rolled into an IRA, considered a rollover rather than a contribution?

What happens when a participant is terminated and receives Severance pay for over a year.... The plan administrator withheld deferrals from his Sev-pay for all that time and then all of a sudden he receives a check from the plan stating that it was all done in error, here is your $ back. It sounds like the guy slipped through the cracks, but what are his rights? He has lost out on over a year of deferrals saving for his retirement. Thanks

It was a tough week for me... who to cheer for... Born in Pittsburgh.... Iron Curtain days... immaculate reception Then moved to Philly.... and now live in Boston. All of my teams had a chance. I knew I had a team that would make it to the Sbowl GO PATS!

Well... I am not much of a football fan.. wasn't much of a baseball fan either. I am a fan that waits till the end to see if there is a local sports team that has the fortune to have made it to the final games with hopes to be the one holding the trophy when the last game is over. Living in Boston has been good for sports fans this year.... especially for footbal fans the last couple of years. I did watch the Steelers/Patriots game on Sunday. Have to admit, the Patriots are a fun team to watch. I think coach Bill has a knack for mixing it up. The players appear to be having fun as well... The Sox set a record coming back agains the Yanks... I think if the Pats win the Super Bowl then they will be one of 2 teams to ever win 3 Superbowls in 4 consecutive years. I think the only thing new englander's can ask now is for it to stop snowing!

It may be late on Friday... but wouldn't the partner who has no comp be deferring 0% of $0 or 100%? 0/0 (the new IRS math) I recall the new math made Blinky beach himself on the edge of his pond once... wish I could remember the thread...

YES... there is the last day rule... must be employed on the last day of the year to receive a contribution... so dont need to amend to 0%?

Follow-up info.... Plan is an October year end plan.... Only participant in the plan right now is the plan sponsor. 3 employees will be eligible to participate but are not eligible now. EE1 enters the plan on 5/1/05 EEs 2 & 3 enter the plan on 11/1/05 204h notice would be given to sponsor himself. A formality but not a big deal. Amending the 25% MP contribution to 0% can also be done... but he would be required to make a 25% cont on income up to the date we amend the plan? 25% cont based on his income from 11/1/04 -> 1/31/05? Sum it up... 2 amendments, one to amend cont to 0% and the other to convert to SH 401K w/3% nec. Couldn't that be one amendment with everything included? Same EIN?... and create letters of authorization to amend the registration of the assets from MP to SH 401?... Thanks for your help!

I read some old posts... am I reading this correct?... There can be an immediate entry date for participants to defer but to receive the 3% SH NEC there can be a 1 year 1000 hour requirement... and still pass ADP? Soooo... basically everyone can defer, sponsor can max out... and the 3% given to eligibles who pass the 1 year 1000 hr... and ADP is passed. did I say the same thing twice?

Any reason why I can not amend a MP into a SH 401k midyear? (The current plan year is an October year) I dont want to establish a whole new plan and have 2 plans for the current year. I have more than 60 days till the end of the year so giving notice is easy. If fine then .... will I be required to calculate a contribution for the short year based on income earned till the time the plan is amended... say November -> January 31? And, if it is less expensive for the sponsor to amend the existing MP to a 0% contribution... can I do that at this point in the year? Thanks!

If a person is part of 2 457 plans in one year can that participant max out both plans in the same year?

Curious how many participants in the plan? Your company shouldn't cast a blind eye and assume that the plan is not a big deal when it comes to compliance and non-discrimination because it is a big deal. If indeed you were thrown into this position I would cover my a** so you dont end up the fall guy if something goes wrong.... like something as basic as filing the form 5500 on time (not to mention completing it correctly!) Good luck!

Mbozek... that is interesting. But that describes a personal sale... a sale that doesnt wash through the agents real estate broker. I guess you could simply discount the sale the commision... but he may need the commision on the books. This guy is saying other agents are doing it... I told him I still think it is a PT.

Cleint wants to invest plan $$ in undeveloped land. Property can be purchase outright ($30K parcels, no mortgage). KICKER... he is the agent and will receive a commision... I am sure this is a PT... I typically advise clients to not invest in Real Estate... this one is adamant. Questions.... Transaction goes throught the usual RE course... Plan would purchase land, client himself would be agent for sale and receive a commision... PT right? If there is a way how would it work?

Nope... guess I was just putting all SEPs into one group. After talking with the one who brought this to my attention am I correct in saying the timelyness of establishing each plan is a concern? First a SEP... then later on down the line (few years maybe) add a QP... that is ok? First a QP and then a SEP later... that is not ok? And to further ask, if the SEP is established and later a QP is added... each plan can be contributed to each year? as long as you dont exceed 415 and 402g ? (and of course everything else)

Am I going crazy... I thought you could not contribute to a SEP and a QP in the same year. IRS Pub 560, page 7 says you can. Am I missing something? IRS Publication 560

I see your point. Then you are saying that you shouldn't leave it 1/3 to Bob, 1/3 to Suzie, and 1/3 to Tom... that if it proceeds to the secondary beneficiary and if there is more than one it should be left to a trust and let the trust deal with splitting it up to the surviving beneficiaries, or their heirs?

Can a participant assign as the secondary beneficiare his children and literally put on the form "divided equally between my surviving children" or should s/he spell it out with each of their names ... i.e. "in equal shares to Bobby T. Jones, Suzie Orman, and Tom Brokaw"

Amendment for what? The plan I presume is up to date with EGTRRA and GUST. You would need a corp resolution to terminate the plan. You have distributed the funds so there is no $$ left in the plan (again assuming you had the participants complete distribution packages and they received all their account bal since the plan terminated). File the final 5500 come year end and form 5310 (if you need).

Austin is absolutly correct, it is simply a marketing term. Still a full fledged 401k and as such should take into account the possibility that a business, while now a one man show, may have employees in the future. The plan that has a parent as the owner and employs a son or daughter will not have to pass ADP/ACP because all employees are deemed HCEs because of attribution? correct? But since the plan employs the son or daughter it will have to file a 5500... the free pass for the owner only plan does not count... again correct?

So the mom and pop can defer max and the kids can defer next to nothing ... and will pass non-discrimination? Because of attribution and the fact that the kids will be deemed to be HCEs?

If the situation is a 401k and the daughter is eligible to make deferrals but not to receive an employer contribution would they still be able to file an EZ? (Just being the devil here)

what about husband and wife and daughter... daughter not eligible because of 1000 hour requirement, still file EZ?

Soooo... A SE individual has until s/he files their schedule C to make the deferral and employer contribution. Deferrals do not have to be made prior to December 31.

Blinky... did I confuse you? The 3% can be used to satisfy TH but can not also be used as part of the profit sharing formula... I think that is my question. For me I was trying to be fancy. I wanted to have a SH 3% Non elec formula and also use the 3% in the profit sharing formula.... as part of the disparity formula. Guess I cant.

does this pass muster: 1st - pass out 3% SH non-elec 2nd - integrate @ TWB (5.7%>TWB) 3rd - allocate excess to bring HCEs to max 415 limit I can use the 3% SH as part of my employer contribution, the draw back is that there is no vesting on the 3%... 100% vested almost forgot... what if a SH Match.... do I need to give out minimum 3% to all as en ER contribution and then perform my integration, and if anything left allocate the excess? What if there isn't anything left... what if there isnt enough? reduce the amount of the integration? or do I reduce the 3% to 1/2 of the integration (to 2.85%)?