A participant directed 401k Profit Sharing Plan's key employee (owner/menmeber s-corp) has bought an antique car under the name of the plan as one of his investments. I believe this falls under the prohibited transaction umbrella but would like to hear other opinions/thoughts.

Thanks!

At some point, a key employee may want to sell his one or two shares of employer stock (owned outside the plan) to the company's ESOP. I can't think of any reason why the ESOP couldn't purchase the shares from him at normal fair market value, but thought I would toss this out there in case I'm missing something.

Facts - Sponsor adopted an Individually Designed Profit Sharing Plan (prior document provider did not have a pre-approved plan) 10/01/2001. They received an LOD on 04/08/2003. The last digit of the EIN is 8, so the plan is in Cycle C. The Sponsor did not restate the plan for Cycle C which ended 01/31/2009. The Sponsor only timely adopted the EGTRRA Good Faith Amendment and did not timely adopt all other interim amendments. The submission period for Cycle C2 begins on 02/01/2013 and ends on 01/31/2014.

I understand that the Sponsor should file as a nonamender under VCP, Appendix F, Schedule 2 and inlcude all interim amendments. My questions are:

1. Can I restate the plan onto a pre-approved document effective 10/01/2008 even though the Sponsor did not sign an 8905 prior to 01/31/2009? (My preferred choice!)

OR

2. Is the Sponsor required to restate to an Individually Designed Plan 10/01/2006 (5-yr), include all interim amendments to current and use the most current cumulative list (2011) for preparing the document? Or restate the document twice; once effective 10/01/2006 with the 2007 list and then effective 10/01/2011 with the 2011 list?

Thank you!

I've often read articles about how much insurance can be in a plan, how PS 58 costs are handled, etc., but this is the first time I've run into a case where a participant actually died with a life insurance policy in the plan. I don't know any details about whose idea it was, how the premiums were paid, etc. What I do know is that the spouse expected to receive the proceeds from the policy, but instead they were paid to either to the employer or the plan (that's still being sorted out, I guess). So it seems that somebody didn't set up the policy correctly. If she had been the beneficiary, at least some of the proceeds would have come out to her tax free. If the proceeds went into the plan, I'm thinking that she will still get the proceeds, but they will have to be rolled over to keep them tax deferred, but ultimately tax will be paid at some point. If the employer was the beneficiary, she'll never see a dime.

I guess the choice of beneficiary is determined by who is putting the policy in place. If it's the employer, the employer is expecting to get a benefit when the participant dies, so the employer is named as beneficiary. If it's the participant, he or she is probably expecting a loved one to get the benefit, who, hopefully, will not have to pay tax on the entire distribution.

I would like to get some feedback from my peers on life insurance beneficiary designations when the policy is in a qualified plan. Since I mostly deal with deferred compensation plans, let's stick with those. Thanks for your help.

A reviewer has made a request that I think is 100% wrong, but since I've made a mistake or two in my time, I just would like to see if folks agree.

First, this is a profit sharing plan, with no prior pension money. The plan has a normal retirement age of 60. This was submitted for a d-letter in 2009, and it just got the initial review in July!

The reviewer is asserting that the plan must be amended to have a NRA of 62, as per 1.401(a)-1(b).

Well, I don't agree. This is a profit sharing plan as defined under 1.401-1(b)(1)(ii). The cited reg doesn't apply. Furthermore, IRS Notice 2007-69, as well as even the IRS LRM language, both make it clear that her amendment request would apply only to a pension plan.

Any other opinions?

I am working on a New Comparibilty Profit Sharing plan for two self employed partners, and 4 other employees who are paid via a W-2

Can someone please walk me thru the calculation to get to the Net Earnings from Self Employment based on the following factors:

2011 Schedule K-1 line 14A: 656,811

2011 401(k) Deferrals: 16,500

2011 Profit Sharing: 32,500

If you need any other information to do the calculation, please let me know. Any help is greatly appreciated.

Should I feel guilty about telling participants that they can get out of the 20% withholding requirenment by rolling to an IRA first and then closing their account.

I don't advertise the option, but, as an example, I'm currently dealign with a Totally and Permanently disabled participant who is in what you might call dire straights.

And that IS what the rules say.

Does water and sewer shutoff notice qualify for Hardship Safe Harbor?

I have a medical practice with 2 shareholders - each 50%.

Both of these shareholders each own 25% of another medical practice.

Are there any issues with a controlled group here? I want to say no ... but need a second opinion.

We currently have several different programs that are essential to our business that are also frustrating me greatly.

1) Time Keeping/Client Accounting where we keep track of client engagements, staff time, and invoicing. We bill on a quarterly basis for our estimated fees for the year, and then do a true-up after the annual reports and 5500 are completed. This software is also used as a workflow manager/due date tracker.

2) Accounting software for our client's retirement accounts.

3) Our business financial software that we use to prepare our monthly and quarterly reports and track our expenses and revenues (through imports in the time keeping/client accounting software)

What do you use as your "practice management" software? Do any of you have an all in one solution you recommend? Even if it's just quickbooks enterprise edition, I'd like to know that I'm not running down the wrong path when looking for a solution.

One issue under health care reform is how the prohibition on lifetime/annual limits applies to HRAs. Some commenters have noted that this prohibition does not apply to dental-only HRAs that qualify as excepted benefits under HIPAA. My question is how a dental-only HRA can qualify as a HIPAA excepted benfit. To be an excepted benefit, the participant must make a separate election for the benefit and and must have to pay something extra for the benefit. Since an HRA must be funded with employer dollars (and not with employee pre-tax contributions), how can the HRA satisfy the second part of the test? Perhaps with employee after-tax contributions?

Has anyone thought about this?

assuming no dramatic changes in the next 2 months, based on the CPI-U value released today (229.104)

the comp limit will be 255,000 and the 415 limit would be 51,000 in 2013.

Too close to call if the deferral limit will increase to 17,500.

Since they are predicting higher food prices because of the drought I'd guess the consumer price index would only increase, but someone once told me all bets were off in an election year, certain 'unexplained things' happen.

Good morning, everyone! Our plan has a former participant who was overpaid significantly in respect of his benefit. We would like to get that money back, but apparently we now have the wrong address for him.

Can we use the IRS Letter Forwarding Program or the PBGC locator program? I thought I had seen that the IRS program can't be used to try and obtain amounts owed to a plan. Is this accurate? What of the PBGC program? Or the Social Security program?

If anyone has some suggestions under these facts, I'd greatly appreciate them.

It is my understanding that the funding relief interest rates will not be available to a plan that is using the full yield curve. Agree?

Thanks

Company A is owned 100% by Pat. Chris is a long-time employee and participant in Company A's plan. Chris is not related to Pat, and Chris is NHCE right now.

Pat and Chris will soon form Company B, owned 49% by Pat and 51% by Chris. Before the end of the year, Company B will become a co-adopter of the Company A plan. Since there is no ASG (they are manufacturers) and no controlled group, the current plan will thus become a MEP. As such, Companies A and B will have to satisfy separate discrimination tests for 2012.

It seems that Chris will be NHCE w/r/t A's testing, but HCE w/r/t B's testing. Can that be right? I've never heard of it, so I'm guessing Christ must be treated as HCE for the full year for all parts of the plan.

Agree?

We have an basic safe harbor match with an auto enroll of 3%. We understand that a participant can elect any percentage including zero if they don't want to be auto enrolled at 3%. However, the plan sponsor would like to make the participant opt out (change their deferral percentage to zero every year). For example. the sponsor wants to look at all deferral rates once a year on a specified date (assuming we give the details in the safe harbor notice). Any employees deferring 0% will automatically be enrolled again at 3% until they opt back out. The problem I see is that an employee has elected to defer 0% in a prior year, if we do this then we override an election. The question is, can you have an auto enroll provision that applies to everyone each year that will recapture anyone who has elected 0% in a prior year? If so, any good reference material?

Thanks

CPC, ERPA

I am trying to respond to a question but have not found a good resource for information on Governmental 401(a) Plans.

A utility district currently has 457(b) and 401(a) plans - same participants in both plans. Since annual contributions in both plans have never exceeded the annual limit of $17,000, the discussion is to continue the 457, and terminate the 401(a).

Can the 457(b) plan accept a rollover distribution from the governmental 401(a) plan?

,,

Same individual has 100% ownership a tool and die shop and in an auto garage.

The auto garage employees are excluded from the tool and die shop plan.

Schedule C from tool and die for the owner is $240,000

Schedule C from auto garage for the owner is a loss ($87,000)

What compensation should I use for ADP & ACP testing for the owner in the tool and die plan, $240,000 or combine the two schedule C's and use $153,000?

Thank you.

Are there any companies that will give life insurance to a 68 year old man in New York? What is the average premium?

- Health is average

- Face value ~20K

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