A DB plan has been using the full yield curve.

I beleive we have a one-time ability to switch to segment rates (not MAP-21 rates) starting in 2012. I think we have until the filing due date of the 5500 to make the election.

Does anyone know of any sample election language?

Thanks.

403b prototype document from Corbel, use of forfeitures question:

"Plan Expenses. Pay reasonable Plan expenses first (See Section 7.04©), then allocate in the manner described above."

If this option is selected for match and nonelective, then must forfeitures be used first to pay recordkeeping expenses? In the plan in question, the recordkeeping expenses are paid by selling shares in mutual funds (i.e., not by plan sponsor and not by revenue sharing).

Corbel 401k prototype document.

"Plan Expenses. May Forfeitures first be used to pay any administrative expenses?"

If the answer is yes, must forfeitures be used to first pay recordkeeping expenses, asssuming the expenses are paid by selling shares (i.e., not revenue sharing, not paid by the plan sponosr)?

I have a 415© failure due to employee deferrals. The employer contributed a $50,000 profit sharing for the participant. So I need to refund the employee deferrals over the catch-up contribution of $5,500 since the participant has attained age 50. My question is, what year is the refund taxed?

Looking to see if anyone knows of any IRS guidance out there that could help me out with the following.

Company A & B cover their employees in a multple employer safe harbor 401(k) plan that has fulfilled all proper notice requirements. Halfway through the year (effective 5/1), however, Company B is going to shift its employees into a single employer SH 401(k) plan by amending the plan to simply say it is no longer a multiple employer play, it is a single employer plan, and establishing a separate trust. It will have all the same features as previously in place, contributions, protected benefits, etc.

I think the argument is that it is the same plan, not the creation of a new one. It is a simple conversion; not the creation of a new plan. I cannot seem to find any IRS guidance on the issue. Any input/opinion would be appreciated.

TH ratio on system report is 60%, but it is actually 60.04. All the numbers including inservice distributions have been reviewed. Is the plan top heavy?

Can a 401(k) plan with a SHNEC also have an integrated Employer nonelective contribution allocation?

Can the SHNEC be used as part of that integrated employer nonelective contribution allocation?

Thanks.

S-corporation - management company - 4 equal 25% owner-employees. No other employees. Now, I know they are not subject to Title IV due to the exception for a plan covering only "substantial owners" under 4021(b)(9). But it got me to thinking, what if they hired an employee - does this qualify as a "professional service employer?"

This seems to get a little gray due to the "...but is not limited to..." clause in 4021©(2)(B).

The "conservative" approach would be to say PBGC coverage required. And of course we could ask the PBGC if it ever happens, which isn't likely at this point. I just wondered if anyone had encountered a similar situation, or had seen any guidance on such a situation?

As I think about it - the "conservative" approach from a PBGC coverage point of view might be considered aggressive from the IRS point of view, in that the combined plan deduction limits wouldn't apply if it is PBGC covered. So checking with the PBGC and getting an opinion from counsel would be absolutely necessary here, I think, if it ever actually came up.

If I define disability in a DB plan as having the same meaning as the company's long-term disability plan (as in effect at the time of the event giving rise to disability) and subsequently the company changes the long-term disability definition (not subsequent to the injury, but subsequent to the effective date of the definition), is this a prohibited cutback under 411(d)(6)? The problem is that the current LTD definition is a pretty low standard to clear, and I could foresee them changing it in the future to raise the bar a bit. Is that a cutback?

At first thought, it would appear you are not cutting back anything that the participants are guaranteed already, as the definition is as it is in place at the event. But then I thought that could apply to anything. You cannot say "you are guaranteed whatever benefit we determine at the time." Thoughts?

PS Plan which indicates no allocation requirements for actives, but a 500 hour requirement for terms. The client wants to add a straight last day rule. When must this be amended to avoid a cut-back?

I think that as long as no one has worked 500 hours it would be OK. I see it like a "modified last day rule." IF it was a regular last day rule, we all agree the plan could be amended now to change the allocations. So if no one has worked 500 hours, and no one has worked on the last day, then no one has accrued a right to the allocation yet.

Thoughts?

Tax-exempt employer has a defined benefit-type SERP for an employee. Naturally, it is subject to Section 457(f). As of the date of termination of employment, the present value of all of the accruals under the SERP have been included in income under 457(f). What remains is a stream of payments for life which would be taxed in accordance with the Section 72 rules. If employer buys an annuity contract that will provide those payments and distributes the annuity contract to the employee, will that be an impermissible acceleration under Section 409A? Assume the cost of the annuity contract is greater than the amounts previously taxed. Alternatively, assume that the employee agrees to take an annuity contract that is purchased for the exact amount already taxed. To the extent that the period annuity payments under the contract are less than the amount earned under the SERP, the employer would pay the employee the difference each month out of its general assets.

Large employer has a health plan. 80% of the employees are in a self- insured plan while the other 20% are in a insured plan.

The self-insured plan: The insured plan: Consists mostly of salespeople

80% employer contribution 20% employer contribution

20% employee contribution 80% employee contribution, however if the salesperson sells more he can get a higher employer

contribution

Can this employer have their employees pay for their contributions pre-tax through a Section 125 Plan?

Thanks,

ty2433

Large employer has a health plan. 80% of the employees are in an a self- insured plan while the other 20% are in a insured plan.

The self-insured plan: The insured plan: Consists mostly of salespeople

80% employer contribution 20% employer contribution

20% employee contribution 80% employee contribution, however if the salesperson sells more he can get a higher employer

contribution

Can this employer have their employees pay for their contributions pre-tax through a Section 125 Plan?

Thanks,

ty2433

Looking through 1.401(a)(4)-8(b)(1) I found the method for calculating the gateway amount, but I could not locate any passage that describes the requirement for the gateway to be given to every NHCE who is being allocated any employer contribution, even if they wouldn't normally be eligible for a profit sharing allocation due to a 1,000 hour requirement (e.g., when participants must be given a minimum top heavy allocation). Does anyone know where in the regs this can be found?

Large 401(k) plan Sponsor submitted a file to the investment company (also a directed Trustee for the plan) for corrective distributions. Later that day, it was discovered that 3 of the people listed were catch-up eligible for a portion of the amount and the investment company was notified of the changes. The investment company confirmed that they would process the corrected amounts.

Several days later (and before the 3/15 deadline), one of the 3 participants called the contact person at the Sponsor to tell him that he received a larger check than anticipated. Note the investment company did not notify the Sponsor of this error. Turns out all three participants have cashed the checks and the investment company is saying they will issue two 1099Rs - one for the smaller corrective distribution amount, and the second one for the extra amount, coded as "E", excess annual additions. Somehow this does not seem right. It seems correction should be the investment company's responsibility.

What would be the best way to fix this?

Thanks for your insights!

If a person holds an ownership interest of greater than 5% in a Company, but the person is not an employee of the Company, and he or she does not receive a salary /guaranteed payments from ABC Company, Is this person required to take an RMD from the Company if he or she meets the RMD requirements?

I thought for purposes of section 401(a)(9), a 5-percent owner is an employee of the company and in this situation since the person is not an employee of the Company and did not receive a salary/guaranteed payments from the Company he or she would not be required to take an RMD from the Company.

A participant in a 401(k) plan passes away, leaving her account balance to her spouse as her primary beneficiary. The spouse is 71, the participant was only 63. The spouse wants to leave the account in the plan as a means of deferring RMDs until the deceased would have reached 70 1/2.

The spouse is asking for the account to be retitled in his name so that he can make investment changes. First, as a non-participant, non-employee of the plan sponsor, can the deceased's account be retitled in the name of their beneficiary?

Can I allow the beneficiary to gain access to the account using the deceased's information (i.e. SSN) in order to make investment changes?

Can the beneficiary name their own beneficiaries if the account remains in the plan? Or will the account go to the deceased participant's contingent beneficiary(ies) if the primary beneficiary passes away before it is distributed from the plan?

Any thoughts are greatly appreciated!

It was originally distributed prior to 3/15, but it had to be re-issued after 3/15 due to it being lost.

I assume a conservative approach is to pay the excise tax, since the date of the check is after 3/15. Though I'm sure an argument can be made if there is proof that an original distribution was made prior to 3/15.

Does anyone know if the IRS has issued any informal guidance in terms of how an auditor would treat this situation?

I think that if an employer purposely blew up a SIMPLE IRA today to move to a 401k plan the 2013 YTD contributions would become "illegal" and need to be dealt with but prior year money is not "disqualified".

What happens if the employer has a SIMPLE 401(k) and wanted to amend it today to take it out of SIMPLE status? Are the only consequences that the plan loses the ADP/ACP and Top Heavy exemptions? Do we have to do anything with or otherwise be concerned about the 2013 YTD contribtuons?

Thanks

If a person holds an ownership interest of greater than 5% in ABC Company, but the person is not an employee of ABC Company, and he or she does not receive a salary /guaranteed payments from ABC Company, Is this person required to take an RMD from the ABC Company if he or she meets the RMD requirements?

I thought for purposes of section 401(a)(9), a 5-percent owner is an employee of the company and in this situation since the person is not an employee of the ABC Company and did not receive a salary/guaranteed payments from ABC Company he or she would not be required to take an RMD from the ABC Company.