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Earnings on $771 is a pittance. I'd add earnings just so you can argue that you were within the spirit of EPCRS' correction principles should it get questioned later.

I respectfully disagree... She can only defer the first year's MRD to 4/1 of the following year IF she doesn't take any distribution during the current year. Since she took a distribution, then per Reg 1.402(c )-2 Q&A-7, it counts towards her MRD requirement to the extent it "has not been satisfied" (also, the cite I provided above says the distributing plan doesn't care that the distribution was rolled over). So, it's appropriate to issue 2 1099's AND strongly advisable to currently send the participant (not the IRA custodian) a letter explaining the ineligible portion and inform her that she needs to take a corrective distribution from the IRA.

Plan makes matching contributions each payroll and then does a true up at the end of the plan year. The 2011 true up deposit was not made. They are going to make the deposit now, but is there a penalty due for this missed deposit? Do I file form 5330? I guess i'm asking is what all needs to be done to properly correct this? I'm guessing it's not as easy as just making the deposit now.

If the election for 50% was valid the participant is out of luck.

Notice 2005-05 which discusses automatic rollovers provides sufficient crossreferences for you to find the exact provisions. http://www.irs.gov/pub/irs-drop/n-05-05.pdf

You are correct. From the IRS web site: When the IRS approves a timely filed exemption application, exempt status is recognized back to the date the organization was created. Thus, while an application is pending, the organization can treat itself as exempt from federal income tax under section 501©(3). For example, it must file Form 990 (instead of an income tax return) while its application is pending. However, if the org ultimately does not qualify for exemption you run the risk of having an employer eligibility failure.

My 2 cents...everyone seems to be coming down hard on this employer. But I've taken over plans that were handled by large firms, and had all kinds of problems because of poor communications, and they're running just fine now. There's a big difference between spitting out computer-generated e-mails and taking the time and effort to print something and mail it and put a "Sign here" sticker on it. Clients like this are why most of us are in business and able to compete against bigger firms.

Your assumed retirement age for valuation purposes does not have to match the NRA in the plan document. It is just your assumed retirement age. If it was truly a mistake in the document, then just fix the document and move on. You might consider a VCP filing as a cleaner fix.

That's good enough for me actually. If fling is the only requirement, they have done that. In other words, you are until they tell you your not. Sort of like submitting a 401k plan for a determination letter perhaps - you're a qualified plan unless they tell you aren't. The law says what it says, and it says "filing" is required to be a 501c3. I'm sure you still need to comply with all rules relative to a 501c3, of which a filing is only one of those requirements. I assume that this is to protect people from waiting and waiting and waiting for the IRS to respond.

Using plan assets to buy a typical fidelity bond protecting the plan is pretty standard. But I'm confused as to why State Street needs the plan to do this? As a corporate trustee/custodian, they should have a several million dollar bond in place and I'm pretty sure they are exempt from having to get a bond for each plan.

I probably should have been more clear in my post #8. I don't think there is a requirement that all non-key HCE's receive the SH to be top heavy exempt. It's not mentioned in Code Section 416(g)(4)(H) or Rev. Ruling 2004-13. It was also not mentioned in the 2010 Q&A item dealing with the TH exemption for SH plans. This thread was the first time I've seen or heard anyone say there is such a requirement. There is always the chance I've overlooked something which is why I asked where this requirement can be found, if it indeed exists. We don't limit the SH to only NHCEs very often, but we have a few plans that do.