Lynn Campbell

Is it possible, when allocating gains, to use "weighted balance (beginning year base)" in a Plan which has transfers between investments in mid-quarter? I value the 401(k) accounts each quarter, and this past quarter all investments had losses, and QT will not allow me to post the loss because it will not accept a negative balance in this participant's account (all funds in a participants's investment account were moved to another investment in the middle of this quarter). I would like to find a way to give this person their share of the loss from the investment they had for the first part of the quarter and "move" the loss to their new investment.

Dentist client uses temp service, but the service requires that all temps be on the Dentist's payroll from day 1. The Dentist withholds taxes, pays FICA etc. Dentist pays the agency a fee each month for these temps. If one of these temps is hired by the Dentist on a permanent basis, what is the date of hire?

R. Butler - Could you please explain how a brother or sister-in-law of the participant is a party in interest?

IRC 408(m)(1): "The acquisition by an individual retirement account or by an individually-directed account under a plan described in section 401(a) of any collectible shall be treated (for purposes of this section and section 402) as a distribution from such account in an amount equal to the cost to such account of such collectible."

Collectibles are not permitted in individually directed account Plans, so the client does not have the option of moving these into his own segregated account. Any collectible in an "earmarked" account would be treated as a taxable distribution.

Would this Plan be covered by PBGC? For first few plan years, the participants were: owners(husband and wife), their 2 daughters and 1 common law-employee. Now the only participants are husband and wife and 2 daughters and husband of 1 daughter. Thanks for help.

Try this: freeERISA.com

At a recent 5500 Seminar put on by Corbel, the instructor told us to leave this item blank, because DOL had advised that approach. I am not sure how my clients will accept that explanation from me...

Client has compensation greater than $200K as non-owner/employee of big corp and defers $10,500 to 401(k) plus a small matching contribution. This person also has consulting business with income of $200K, and wants to set up SEP or perhaps DC or DB Plan. Does he get the full 415 limit for this new Plan, despite participation in the 401(k) Plan?

Plan specifies that normal retirement age is later of 65 or 5th anniversary of the date on which the person joined the Plan. Does the "5th anniversary" provision imply that 1000 hours were completed during each of the 5 years? Plan silent on this question. Thanks for any input.

When using prior year ADP and ACP, is there any leeway with the multiple use test in the event of an amendment to the Plan increasing the matching contribution? It appears that my HCES will exceed the multiple use rules due to the doubling of the matching contribution in this plan year.

I just read this in a newsletter from PPIB. Look at http://www.benefitslink.com/ppib/industryn...essionals.shtml (an article entitled "The Pension Professionals, Inc. Case"). [This message has been edited by Dave Baker (edited 04-23-2000).]

Client terminating Pension Plan and closing office, and intends to pay 2 clerical employees severance pay. He would prefer not to include this severance as "compensation" when computing required pension contribution. Is this permitted? Thanks for all input...

Takeover client has apparently failed to file IRS Form 5500-EZ for several years and is uncertain how to approach the IRS. Has anyone had recent experience in this area, and is the IRS likely to waive the penalties upon reasonable cause? Thanks very much for all input.

Non-Owner/HCE earning > $80,000 in 1997 and 1998 was in 401(k) Plan. He terminated at end of 1998 and did not provide any services in 1999 but received 1999 W-2 for small ($2,500) amt. Is he in the ADP test as a NHCE for 1999? He did not defer any $$ in 1999 and I would like to leave him out of testing...thanks for all input.

This may be possible, it depends on what the Plan document says.

In a SARSEP, or in a SEP, if top heavy, does the key EE get the 3% top heavy contribution along with all the non keys? This would seem desirable but is it permitted?

You might want to look at: "Late 401(k) contributions" on the "Retirement Plans in General" message board, which relates to your question.

Even though this is a safe harbor plan, you need to check the deferral levels to make sure that the total contributions do not exceed the 404 limit. At this point, can you go to the HCEs and have them reduce their deferrals for 12/99 enough to meet 404? Or can you have the HCEs take more compensation in 1999 and not defer from the additional compensation? I think the $13,500 Safe Harbor contribution is required no matter what.

Richard - The Father is 76 and not interested in funding his "retirement". I am thinking of having him waive (permitted by Non Std. Proto) all but $1/month of benefit - just to meet 401(a)(26). I think the IRS would OK this? Any other ideas?

Richard - thank you for input. Do you know of any way to add this $1 benefit to a prototype document without changing it to an individually designed plan? Have you used this technique yourself?

Is there any exception to the 401(a)(26) requirement that at least 2 EEs must participate, in a situation where there are only 2 EEs who are both owners of the business, but only 1 wants to participate? The 2 EEs are father and daughter and the father would like to waive participation.

I would probably amend the Plan to allocate the forfeitures to the remaining participants.

To clarify - all the $$ went to just 1 SEP - which was set up years ago for one of the HCEs.

In a takeover situation, how would you "withdraw" a contribution that should have been made to the qualified PS Plan and was by error deposited in an inactive SEP? This was an accounting error, essentially, due to confusion on accounts. Deposit was made in 1997 for a 7/31/97 Plan Year. Thanks for all input...