I saw no problem in telling the employer that they could force direct rollovers for their active employees from the terminating profit sharing plan to the company's 401(k) plan, until I realized that the PS plan has several distribution options, including annuities. Now I'm not so sure. Are they safe to force the rollover if the 401(k) plan offers the same annuity options? If the 401(k) doesn't have the same annuity options, I would assume that they can only offer the direct rollover as an option, but not force it.

Participant recently completed a QDRO, 50/50 split, with an effective valuation date of 12/30/2011. The QDRO transfer transaction was processed and traded normally on 5/2/2012 with earnings from valuation date onward. No issues there. Participant's RBD is 4/1/2013. Participant is in the process of initiating his first year of RMDs and is requesting that the effective date and amount of the QDRO be applied to his 2012 RMD. Essentially he is stating that because the QDRO dictates that 50% of his balance was not his starting 12/30/2011, even though money did not move into separate accounts until months later (5/2/12), that his 2012 RMD should use 50% of his 12/31/2011 closing balance to determine his RMD amount for 2012.

Please confirm:

Option 1: $312,214.02 / 27.4 = $11,394.67 (participant satisfies 100% of 2012 RMD)

Option 2: $156,107.01 / 27.4 = $5,697.34 (50% prior year end balance due to QDRO effective date)

What should the RMD be?

I have 4 plans merging into 1. All 12/31 PYEs. All memebers of the controlled group for all of 2012.

Plan A & B merge effective 10/1/12. We believe plan A is going to be considered the surviving plan. Plan B was a safe harbor plan.

Plan C merges in effective 10/2/12. Plan C is also safe harbor.

Plan D will merge in effective 12/31/12.

Surviving Plan A is not a safe harbor plan.

Quesetion:

Are Plans B & C considered Safe Harbor from 1/1-merged date? Or since it was a short plan year, do they lose SH status?

An employee just confessed to our client that he has been using someone else’s last name and SSN. The client has contacted an attorney (not an ERISA attorney), who advised that the participant’s 401(k) account balance should be forfeited since he was employed under false means. We don’t feel that this is necessarily the correct resolution. The participant has a $26,000+ vested account balance and an outstanding loan (if that makes any difference).

We’ve looked through all of the previous posts on this, most of which have to do with illegal aliens, and all of which are over 8 years old. There seems to be one camp that says the participant doesn’t get anything in the plan because of the fraudulent behavior in becoming employed. Others say that this has no real impact on the retirement plan because the individual worked for the compensation regardless of the SSN that it was under. Any new insight on this?

If a former participant has a small (under $200) balance, can the sponsor send them a check for the balance? This is after several requests to fill out distribution forms have been ignored.

In addition to the initial participant-level fee disclosure, a disclosure must be made "annually thereafter". That is defined to mean at least once every 12 month period without regard to whether the plan operates on a calendar or fiscal year basis.

Does this mean that the annual disclosure must be made within 12 months of the initial disclosure or just once every calendar year or something else? If it doesn't mean that the annual dislosure must be made within 12 months of the initial disclosure then you can go almost 2 years between disclosures. For example, if a plan makes it's annual disclosure on January 1, 2013 then it wouldn't have to make another annual disclosure until December 31, 2014.

How is everyone interpreting this?

A participant has a historical frozen 401(k), and a current 403(b) to which she is making contributions. She takes a hardship distribution from the frozen 401(k) (only loans, hardships and 59.5s are allowed out of this plan for actives). Is she now suspended from making contributions to the current 403(b)?

In Revenue Procedure 2012-35, the IRS is no longer forwarding letters from plan administrators to missing participants.

What are other plans doing with missing partipants? Thanks.

For those of you who deal with Partnerships and LLCs (taxed as partnerships) do you advise that each partner must be in the same allocation group and receive the same allocation percentage? If they do not do you believe that a cash or deferred arrangement (CODA) now exists?

Has anyone seen any recent DOL enforcement actions related to missing Form 5500s. In this case, plan sponsor failed to file 5500s for several welfare plans. No 5500s have ever been filed for these plans so they are not on anybody's radar--i.e., this is not a situation where the IRS might send a notice asking why the 2010 5500 was missed and client could then move through DFVC to address both DOL and IRS concerns. I know there could always be a random audit by the DOL that might discover the missing Form 5500s which would then preclude the use of the DFVC program. My specific questions are (1) has anybody seen such audits by the DOL, particularly in recent years and/or seen the DOL hit these issues in audits primarily investigating other areas? and (2) if somebody has seen such audits, what sort of fines does the DOL typically impose.

We have not seen any DOL action in this area in a very long time so would appreciate hearing from anybody with recent experience. The company plans to go through DFVC but question is how quickly they need to do that. They only have records for the most recent years and are trying to determine how far back the filings need to go. They believe they have the records that will permit them to determine number of participants (and likely an estimate of premiums) but it will require some digging through files in storage.

At some point the cost of continued digging for exact numbers doesn't seem all that worthwhile but the risk of enforcement concerns also doesn't seem to merit simply winging it and throwing together 5500s with estimates for years that may or may not have had more than 100 participants. Thanks.

What are others doing in the situation where you have a client who would like to amend their plan to add or remove a feature that will change the fees the participants pay? I know a participant change notice should be disclosed. The issue is timing. If the disclosure of the change has to be provided 30 days before the participant could be affected, but the employer wants to, for example, add loans to the plan immediately, are you postponing the effective date of when loans can be effective? Are you just telling participants they will be charged in 30 days? Is anyone doing anything else?

Took over a plan that failed ADP in 2010, but did not make refunds. Plan was also top-heavy, but the required minimum contributions were not made. They will correct the ADP by issuing refunds and making a QNEC contribution of the same amount. Can that QNEC be used to reduce top heavy minuimums for 2010 also?

Thanks in advance for any guidance.

Possible takeover DB client that has apparently heard some comments that some other companies they have some affiliation with might cause the plan some problems and have requested that we determine if an ASG exists (my words) before taking it over. We'll do our best but doesn't the IRS still have an option to rule on an Affiliated Service Group ? is it available just via Form 5300 for the initial qualification of a DB plan (or any plan) ? or as a separate stand-alone ASG ruling (maybe just a private letter ruling).

I thought I remember seeing or hearing that the IRS will no long rule on ASGs ? but may I heard wrong or maybe it's just as a separate private letter ruling they won't but will for an initial qualification ?

Anyone remember ? Thanks.

I am in a position to make a charitable donation. The charity has spoken to me about my IRA (self-directed) loaning the charity money who, in turn, will purchase a life insurance policy on my life with some or all of the death benefit proceeds going to the charity.

IF this is legal, it makes sense to me in my situation. Some of my questions are:

1) Does the charity have to pay my plan on-going interest?

2) Can the charity provide a balloon interest payment upon receipt of death benefits?

3) Can my IRA receive a portion of the death benefit (e.g., 2 million dollar death benefit....can my IRA upon my death receive, as an example, $700,000 with the remaining $1.3 million going to the charity?

4) Is this legal? It appears that it is, but my CPA is not familiar with this type of arrangement.

Ideally, I would like to do this AND have an agreement in place that my IRA would receive the initial premium (to fund the policy that is being loaned) back and a certain amount of the death benefit as an investment return. But can the charity do this OR do they HAVE to pay me interest during the period of time the loan is in force?

I am sure that I am missing a bunch of questions, but some general guidance is appreciated. If legal, this is something that I would seriously like to consider as it still provides a benefit back to my heirs but provides a real benefit back to the charity.

Thank you all so much. Also, I am assuming that if this CAN be done from an IRA, it could also be done from a 401K (I am self-employed)?

John

Profit sharing 401(k) Plan: owner has retired but left his balance in the Plan. He is taking the required minimum distributions. Is he required to take his entire balance out of the Plan because he is no longer working or can he leave it in and continue to take minimums? Someone in our office thought that he has to take the balance out because he is over the NRA of 65.

I thought perhaps that only applies to Defined benefit plans?

I divorced in April of 2010. My attorney quit on me after 8 months and $3000 dollars compensation. During this time he moved couches and tables from from one side of the property division paperwork to the other. I ended up drafting my child custody and vistation order. I told my ex from the start that we needed to work together to divide the property, that the attorneys were only taking ouyr money. After the 8 months my ex's attorney told her that she and I needed to come up with a property division. We did just that! We then sent it to my ex's attorney who wasn't happy with it, but, said that if the ex was happy with it she was Ok also. She then submitted it to my attorney who called me and, to make a long story short, quit because he said that "I was getting a much better deal than I would have had we gone to court"! He ended up sending me a letter withdrawing as my counsel and I had to sign off to be able to proceed. My ex's attorney drafted the divorce documents.

I am a member of SERS in PA and in the divorce decree I agreed to 50% of the marital portion of my retirement which was supposed to be for the 22yrs. we were married. I worked for 7 yrs. prior to being married and plan to work another 6 after the divorce. The last 3 yrs. is when amy retirement would significantly increase I contacted my retirement board at the time of the divorce and got an estimate of $900 per month for the ex at the time of my retirement. Now I come to find that the way the ex's attorney wrote up the QDRO, the ex is still increasinbg her share of MY pension clear up untill I retire. I don't believe that's what I signed in the QDRO. I believe she changed the wording after I signed. Any HELP out there?

A 5500-SF was filed timely on October 12th, 2012 with approved 5558 extension for a calendar year plan.

It has now come to light that the Participant contribution amount and subsequently the EOY asset information is overstated by approx. $22,000. (assumption was made that the owner made the max 401(k) when in fact, did not make any contribs).

I can't seem to find info in the 5500 instructions on the EBSA site but recall in the "old" days that an amended return still had to be filed by the original due date plus extension (i.e. October 15th). Since that date has passed do we wait and correct when the 2012 SF is filed or is it necessary to file an amended 2011 SF now? If we do file an amended now would there be penalties involved?

I should know this and shame on me for not but I haven't had to amend a return after the final filing deadline in many years (if I have ever had to do so!).

Thanks in advance.

I am in a position to make a charitable donation. The charity has spoken to me about my IRA (self-directed) loaning the charity money who, in turn, will purchase a life insurance policy on my life with some or all of the death benefit proceeds going to the charity.

IF this is legal, it makes sense to me in my situation. Some of my questions are:

1) Does the charity have to pay my plan on-going interest?

2) Can the charity provide a balloon interest payment upon receipt of death benefits?

3) Can my IRA receive a portion of the death benefit (e.g., 2 million dollar death benefit....can my IRA upon my death receive, as an example, $700,000 with the remaining $1.3 million going to the charity?

4) Is this legal? It appears that it is, but my CPA is not familiar with this type of arrangement.

Ideally, I would like to do this AND have an agreement in place that my IRA would receive the initial premium (to fund the policy that is being loaned) back and a certain amount of the death benefit as an investment return. But can the charity do this OR do they HAVE to pay me interest during the period of time the loan is in force?

I am sure that I am missing a bunch of questions, but some general guidance is appreciated. If legal, this is something that I would seriously like to consider as it still provides a benefit back to my heirs but provides a real benefit back to the charity.

Thank you all so much. Also, I am assuming that if this CAN be done from an IRA, it could also be done from a 401K (I am self-employed)?

John

Has anyone heard of an extension being granted beyond the 2 1/2 months for January 31, 2012 Plan Year ends.

Any help is greatly appreciated.

Thank you.

DPSRich

A 401(k) plan with 20 participants terminates 7/7/2012 because the plan sponsor is being bought by another company.

The buyout deal falls through 11/2/2012.

The only action that has taken place is that a resolution and amendment have been executed to terminate the plan.

Could they just adopt a new resolution and amendment to activate the plan or must they go through with the plan termination then adopt a new plan a year from now?

Thanks.