I've seen someone using the PPA funding 3-segment rates for FASB accounting purposes. Is this appropriate? I thought FASB rates are supposed to be spot rates, but if the PPA funding rates are a 24-month average are they then inappropriate for FASB purposes?

I am a small business owner with only 2 employees (out of 5), other than myself, that participate in the 401K plan. It was established with a 'financial planner' company, and the fees are heavy, as they put us in a 401K, and now Safe Harbor for 2012.

I want to change to a SIMPLE with Vanguard.

1) Do I have to open the account before Oct 1, even if we aren't able to contribute until 2013?

2) If I open an account, but don't contribute anything until 2013, is that allowed? as we will still be with the 401L plan for 2012 as we are currently funding it with Match.

3) If I terminate the 401K plan on 'december 31, 2012", can I leave the assets where they are , or do I have to transfer them to the new SIMPLE? Do I have other options for the funds in the 401K.

Thanks for the help. Being such a small business, i have been steered in the wrong direction by the financial company into 401K that have high fees, and of course he doens't want me to leave, but I it is not work the costs.

a husband and wife plan.

They employed their daughter from 2006 through 2009.

they want to amend plan such that a year of service requires only 50 hours instead of 1000.

and this amendment is effective 1/1/2008 (adopted in restated egtrra plan).

the intent of the amendment is to have daughter enter plan 1/1/08, receive accruals from 2008 and reflect in 2011 valuation.

i am thinking that the amendment (or actually plan provision in restatde plan) should specify that the provision also applies to former employees, otherwise I am not sure if it would apply to a former employee who previously left without entering the plan.

thoughts?

thanks

I have a QACA plan that employs a match of 100% of the first 3% and 50% of the next 7%. (No A-T contributions.) I know that this match formula does not meet the ACP safe harbor requirements. I want to confirm what match figure I should be testing. My thought is that I should be testing any match that exceed 3.5% of compensation. A couple of my colleagues state that the basic QACA match formula should be applied and that the match calculated by this formula should be subtracted from the match calculated using the formula calculated in the document and that should be tested in the ACP test.

Example 1: A participant has a deferral percentage of 5%. Based on the formula in the plan document, the participant receives a match of 4%. My opinion is that we should be testing an ACP for this participant of .50% (4% - 3.5%). My colleagues believe that we should be testing an ACP of 1% (4% - 3%). The 3% is calculated based on applying the basic QACA matching formula (100% of the first 1% and 50% of the next 5%) to the participant's deferral rate. (My colleagues calc is, since his deferral rate is 5%, he should be calculated at 100% of the first 1% and 50% of the next 4%, giving him a calculation of 3%.)

Example 2: A participant has a deferral percentage of 2%. Based on the formula in the plan document, the participant receives a match of 4%. My opinion is that we should be testing an ACP for this participant of 0.0% (2% - 2%). My colleagues believe that we should be testing an ACP of .5% (2% - 1.5%). The .5% is calculated based on applying the basic QACA matching formula (100% of the first 1% and 50% of the next 5%) to the participant's deferral rate. (My colleagues calc is, since his deferral rate is 2%, he should be calculated at 100% of the first 1% and 50% of the next 1%, giving him a calcualtion of 1.5%.)

Any help and citations are greatly appreciated.

FYI - ACP run on all match contributions is failing. ACP run using my methodology is failing. ACP run using my colleagues methodology is passing.

Shouldn't the payee be listed on an explanation of benefits? Received an EOB indicating what the plan paid but there is no indication of who received the payment. I paid the provider at the time of service; the provider is non-participating. I did not receive reimbursement even though I am the designated alternate recipient in accordance with the QMCSO.

Can a participant designate which accounts in a 401(k) plan to be given to a beneficiary? Such as "my Roth account under the plan goes to person A, and my pre-tax 401(k) goes to person B." I never thought this could be done as all distributions to participants or beneficiaries under 402(a) of the Code must be pro rata from a basis standpoint, and I am not sure how distributions to a beneficiary would differ (both are "distributees" under the Code); but if you think it is legal let me know.

Does the reduction to benefits based on the insolvent status of a plan impact the calculation of withdrawal liability for employers that withdraw when the plan is insolvent? I assume employers are required to continue making the contributions required under the CBA as well as any MCRs during this period. If circumstances improve and the plan emerges from insolvency, are prior benefit levels restored prospectively so that the plan's UVBs increases?

Hello. I am very familiar with the tax codes related to the private sector however, I have an opportunity to work with the public sector now. I am wondering if a town is able to write off the LTC premiums paid for employees just like a business.

Any help would be appreciated.

A 100% owner of a corporation wants to take out a loan from their 401(k) plan and lists "needed to fund the business to keep operations going".

After he receives the loan proceeds, he plans to immediately loan those funds to the business.

Isn't this a prohibited transaction, maybe indirectly?

Would it make a difference if he and his business partner were 50/50 owners both taking loans from the plan for this purpose?

Suppose the loan occurred "a while" ago and now the owner(s) are going to provide loans to the business? Does the lag time change anything?

Have a new takeover client with a profit sharing plan that uses a trustee directed fund, subject to annual valuation. Of course plan has several problems. One problem is that in 2009 a terminated participant was paid the 80% of the benefit due. The 20% for mandatory withholding was left in the trust. I do not know if any 1099R Form was done. (It appears that client kept almost no records.) We are now in 2012 and those monies remain in the trust fund. Any opinions on what actions should be taken to correct this problem? Thanks!

Generally, who would be considered plan fid in a small (less than 20 participant) plan? Board of directors? investment adviser? non-producing TPA? corporate? What is most common?

don't work with these, but the question came up - at a quick look through 125 and the regs/proposed regs, it wasn't apparent to me that this transition period would apply? Anyone know if it does or doesn't?

What are the ramifications of having distribution checks going uncashed beyond the PBGC's asset distribution deadline for a standard DB plan termination?

Is it possible to use an age other than the NRA or SSRA to normalize benefits when cross-testing? For example, suppose you are cross-testing a DB and DC plan. Could you use age 70?, 75?

Also, is it possible to limit post-NRA APRs to age 65?

Thanks.

Has there been clarification on who an "Authorized representative" is that can sign Form 5558 for the 8955-SSA portion? I know ASPPA submitted a letter 11/21/2011 requesting that the requirement be removed but I cannot determine that it has been so removed. So I guess i'm wondering to what an extent a tpa is considered an 'authorized representative' and can sign on behalf of client.

What are most people doing with rehires that were previously reported as an A?

One of my sources says the D means distributed. So just leave the Rehires as is until they are paid out.

Another Source says D means Deleted. So Take the rehires off.

Suggestions???

Pat

A 401(k) Plan has a brokerage option available to participants. One of the participants has asked if they could invest in an IPO (I guess Facebook is coming out this week) and they were told that they could not. Is there something in the IRC or regs that prohibit an investment in an IPO? Thanks for any replies!

Rats, I just lost everything I typed and need to do this over...

i hope I picked the right forum to post this crazy question. Db plan (which i don't work on, I just do DC stuff) had a plan term date of 12/1/11. The trustees had intended to move the assets over to a MPP set up with a 0% formula to take the assets but the assets were not transferred prior to 12/31/11 9they went sometime earlier this year). So MPP had $0 at Fidelity and DB plan had lots on 12/31/11. DB plan also has a mortgage that reads:

[blah, blah, blah] and {insert name}LLC Defined Benefit Plan with trustees {insert name} and-or {insert name}, herein called "Mortgagee," which term includes Mortgagee's heirs, executors, administrators, trustees, successors, legal representatives and assigns, and shall denote the singular and/or plural and the masculine and/or feminine and natural and/or artificial persons whenever and wherever the context so requires or admits, and whose address is.....

I think the trustees are looking at this are the DB plan is the Mortgagee and that this automatically transfers the mortgage to the successor plan, the MPP. Your thoughts?

If you agree, when would this take effect? This is critical as if the MPP has no assets on 12/31/11, it doesn't need a 5500 for that year (it's first year).

if you disagree, what do you think is needed to transfer the mortgage over to the MPP?

Thanks for your thoughts!

My boss just asked me where we could be a plan document for a nonqualified plan. Any suggestions?

Pat

I've posted this one before, but maybe someone missed it and might find this useful. (of course, as with any custom report, it's use at your own risk, though a few people indicated it appears to work well)

This pulls the data from Relius for importing into FTWilliam SSA govt forms. Has saved me a ton of time.

I copy the data from columns A - J and paste it into FT William

8955SampleSSA.csv file. (which I have copied and saved on my computer)

on this excel file, the tem data appears (collumn L) which is my own check. if term date is 2010 I'd expect an A as code for people.

if before 2010 then a D.

In FT William, I complete the following steps:

Add form SSA

then p2

Return

Upload

participant CSV file (this is the third choice)

and simply choose the 8955SampleSSA.csv for import that I pasted the data into