I have worked for a small TPA firm for 15 years. Until last year we had 2 administrators, including me. The owner of the company passed away and someone from out of state bought the firm. He is an agent for an investment company and has never been involved with TPA work. He doesn't appreciate the complexity and says it is a commodity that many investment companies are doing for free. My co-worker left and now I am by myself and feel like I'm working in a bubble. Due to the change in ownership, we lost quite a few cases. I have been given the option of continuing administration, and he will add some new cases, or quit doing TPA work all together. He needs me here in the satellite office so I will have a job either way. My worry is the liability and trying to keep up with the law changes, etc. by myself. I use Relius software, and do get emails from Sungard, but that's about it. One one hand, I could quit and be free of stress and deadlines, which sounds great. On the other hand, I like what I do and prefer to keep on instead of wasting 15 years of knowldege and being bored and having nothing to do. But is the liability too great? Anyone else out there operating alone? How do you keep up with everything by yourself?

An LLC covering two 50% partners/owners has had a defined benefit plan for 6 years. They froze benefits as of 12/31/12 and terminated the plan effective 6/15/2013. They also hired 4 employees back in June 2012, all of which would enter the plan 7/1/2013.

The plan is fully funded or close to being fully funded (depending on the marklet) with the 2012 year contribution. Each of the participants have 415 limits that far exceed their accrued benefits.

Since PPA allows such high contributions, could they make a large deductible contribution for 2013 even though the plan terminated 6/15/2013? Would there be any discrimination issues with the employees that did not enter the plan by the time it terminated?

Thanks.

Scenario - participant termed 2 years ago. Based on the Plan Document distributions occur when administratively feasible and the plan is valued once a year at 12/31. If a participant wanted to take distribution in November following the plan value he would receive the 12/31 prior year value, correct? Gain/loss would be allocated amongst those with account balances as of 12/31. What happens if the termed participant takes out his balance and the remaining left does not cover the remaining balances? It makes sense to value quarterly or when a person wants to take distribution but of course the plan sponsor does not want to pay for the cost. Any suggestions or comments would be greatly appreciated.

I have a client with a calendar year 401(k) safe harbor match plan. We recently discovered that the employer let 1 person join the plan early in 2011 and 2 in 2012. All 3 are NHCE’s. The employer would like to self-correct this under EPCRS by doing a retroactive plan amendment to bring them into the plan. Question: How far back can an amendment like this go? Can we do the amendment today and have it apply back to the 2011 plan year? Could it go back to before 2011?

Thanks in advance for any input.

Hi, my ex-wife prepared the order with her QDRO attorney recently. It looks fine to me except for the valuation date. She used the date of divorce instead of the date of separation as previously agreed on the MSA. The difference between the two is one and a half years. Unfortunately, the MSA doesn’t state it clearly at what date the division should be made. I know that in California it is common to use the date of separation as a cut-off date for property division, but she doesn’t seem to buy it. I am wondering what my chances are in the court if I do not sign the order. Thank you.

IRC 414(o) has some minimal language about further regulations being issues to present the avoidance of providing employee benefits through use of Separate Orgs, Leasing arrangements, and "other" arrangements. That's it.

Proposed regs under 414(o) that would include rules for shared employees were withdrawn.

I understand there are some old pre-ERISA Revenue Rulings (Rev Rul 67-101,Rev Ri; 68-391, and Rev Rul 73-447.

Before I spend time reading all these old pre-ERISA Revenue Rulings do you feel these Revenue Rulings are binding at this point ? Is the IRS likely to point to them upon an audit ? I have a new potential DB plan client that we're going to discuss the shared employee issues and want to make sure I know what is binding and what is open to any good faith "reasonable approach". Thanks.

Plan currently uses w-2 compensation for matching calculation. A HCE receives quarterly bonuses. Already received one for 3/31/13. Match was calculated on YTD compensation, which included the bonus. The company wants to amend the definition of compensation to exclude bonuses.

Q1 - Do they have to amend now (effective 6/12/13) to exclude all future bonuses (3/31 still must count).

Q2 - Can they amend retroactively to 1/1/13? By doing so would that make the 3/31 bonus excluded and therefore allow the company to "pull back" the match contributed on the 3/31 bonus?

Q3 - Say we were doing this 4/5/13, the match on the 3/31 has been calculated, but not deposited. Can we amend 1/1 to exclude the 3/31 bonus from matching calcuation (and therefore not have to deposit)?

A Dental office has a safe harbor non elective plan where they do a 3% contribution for the safe harbor and then a 6% profit sharing plan contribution in addition to any salary deferrals plan participants make. The plan is top heavy in that the only key employee (dentist) account for about 75% of the assets in the plan. The eligibility for any contribution is 1 year. You must be working on the last day of the plan year to receive the profit sharing contribution. The plan had two people terminate and 2 new employees during 2012 (not eligible yet). Must a "top heavy" contribution of 3% be made for the 2 new employees because the plan is top heavy??

A U.S. Company, with many foreign divisions (all 100% owned by 1 shareholder), has an employee who is not a U.S citizen but is paid W-2 compensation. No U.S. taxes are withheld. The employee reports the Brazilian taxes that he pays, on a monthly basis, to the U.S. Employer.

Is his W-2 compensation considered for Plan purposes?

We have a money purchase pension plan that began January 1, 2004. The plan year is the calendar year. For purposes of determing the employer contribution under the plan, an employee's annual compensation is multiplied by 25%.

The first employee covered by the plan to retire will retire at the end of this month. The employee's salary from January 1, 2013 through June 30, 2013 will be approximately $280K. The 401(a)(17) limit for the 2013 plan year is $255K. I've attached a copy of a page from the plan and a copy of part of the section 401(a)(17) regs. My reading of the sentence in the plan I've drawn a line around and the sentence in the regs that I underlined is that the $255K 401(a)(17) limit does not have to be prorated to half for the part of the year worked by the retiring employee. So, the employer contribution as limited by 401(a)(17) would be $63,750. However, the actual employer contribution will be limited to $51,000 by the section 415©(1) limit for defined contribution plans. Is this correct?

Thanks,

Ken Davis

facopier@usouthal.edu_20130612_113432.pdf

So with a Multiple-A type plan, you file a SB for the plan (computing the entries as a sum of the individual amounts for each employer) and just attach an SB for each employer.

Seems simple enough, but what to do about effective rate and ROR?

Or is a better question, does it even matter?

thanks

Under §1.411(d)-3(g)(6)(i), the term early retirement benefit means the right, under the terms of a plan, to commence distribution of a retirement-type benefit at a particular date after severance from employment with the employer and before normal retirement age (emphasis added).

If a PS plan has an in-service distribution option at age 55, can this be amended to age 59.5 for all existing balances without violating 411(d)(6)?

Would a provision in a plan document requiring that, in the event the plan is terminated, any surplus assets remaining in the plan be used to increase benefits payable to plan participants and specifying the method for allocating the assets violate the requirement that benefits be "definitely determinable"?

If a pension plan's governing documents provide for the termination of the plan upon the expiration of a fixed term of years, does the plan automatically violate the permanency requirement under Regulation 1.401-1(b)(2), regardless of how long that term is? Would inlcuding any provision for automatic termination upon the occurrence of a specified event, no matter how remote, disqualify the plan?

Our 401k auditors discovered what they believe is a violation that needs to be corrected. Below is a chronology:

May 10 2006: employee applies for the max available loan.

May 15 2006: TPA calculates this amount as $10,500.

May 23 2006: Due to market drop, participant’s balance is $20,728 – half of this is $10,364, which should be the maximum available loan. Custodian funds the loan for $10,500.

Auditor is questioning what we will do to rectify. Loan is still outstanding, current principal is about $7500.

Is this a violation? Hoping there might be a de minimus defense, or a defense that the amount was correct on the date of calculation.

If we need to correct, would we simply ask participant to pay back $136 and reamortize the loan?

Thank you!

A terminated participant wants to keep her life insurance policy. at 12/31/12 it had appx $13,000 CSV. What would be the tax consequences of getting that in her name and out of the plan? If there is a thread on this already, I apologize.

Can someone point me to the reg where it makes it clear that a participant who terminates in the year in which they attain 70.5 or later, must take their RMD before a rollover? I'm looking for that golden nugget that makes it crystal clear that the RMD is not eligible for rollover. I was looking in the RMD rules, but perhaps it is in the definition of eligible rollover distribution? We have a situation where the participant terminates before they turned 70.5 and of course they are questioning our conclusion that it is required.

If a dentist sells his practice and the new owner will have a new name (plan sponsor) and a new EIN, can the plan be amended to recognize a new trustee, plan name and EIN or must it be terminated and a new plan started? (the new owner would like to continue safe harbor contributions). Thanks for any help.

Can a BOY val reflect a freeze of accruals that is made in June of the same year. TNC would equal zero.

Hi,

We have a money purchase plan that was terminated years ago.

There is one participant (married) that we cannot get spouse to consent to lump sum.

It was always my understanding plan had to purchse annuity.

But, we can't find an annuity company wiling to purchase annuity without particpant or spouse acknowledgment.

My questions are

1. Can we do a forced IRA rollover?

2. If not, does anyone know of an insurance carrier that will take the funds and purchase an annuity without annuitant consent ?

Any help is greatly appreciated

Thanks