Small company (one man plan) establishes and maintains a defined benefit plan for many years. The plan is fully funded and no more deductible contributions can be made. The plan is terminated and the benefit is rolled over to an IRA. A full tax year goes by and the owner wants to establish a new defined benefit plan. Is there anything that prohibits this or will limit the owner's ability to establish and fund that new plan?

Puerto Rico's Department of Treasury -- the Hacienda -- has issued Circular Letter 11-10, announcing their determination letter procedures following the significant amendments to the Puerto Rican Internal Revenue Code, The only copies of Circular Letter 11-10 I have seen are in Spanish. Does anybody hve an English translation, or has Hacienda put out an Engish version?

Hello,

A small employer will be hiring 8 employees from a company. Currently, the plan has 1 yos age 21 eligibility conditions. Could they amend the plan to allow for service with these new hires predecessor employer so that they can be in the plan or would that be discriminatory?

Life insurance allowed in 403(b) plans? Does it matter whether it is an ERISA or non-ERISA plan? I thought the 2009 403(b) regs prohibited life insurance in these plans.

Thanks

Is it mandatory to report D's, or is still optional? The instructions do not seem to go out of there way to tell you not to report them.

Any help is appreciated...

A company's board was required to adopt an interim amendment by the end of the calendar year. One board member adopted in writing, while the others (who had been sent a copy of the amendment by e-mail) simply replied before the end of the year in an e-mail indicating that they had reviewed and approved the amendment. Does anyone have any experience indicating how the IRS would likely react to this form of adoption? Presumably it would be permissible under E-Sign, but the 2011 ASPPA Q&As indicate that the idea of electronic adoption is "controversial" within the IRS.

Thanks very much.

An HCE has requested a full distribution of his benefit to an IRA. He also deferred wages for 2012. His deferral rate assures he will need a refund of ADP and ACP for 2012. If his entire balance is rolled over now, will the plan sponsor's obligation to refund ADP/ACP failures be satisfied by sending correspondence to the IRA custodian when that time comes in 2013?

Is the plan required to send a suspension of benefits notice to all participants who reach normal retirement age, even those who continue to work past normal retirement age without stopping? CCH Pension Plan Guide states that notice must be given to employees who reach NRA but continue to work, and cites a DOL information letter dated 7-12-82 (which I can't access). Code Sec. 411(a)(3)(B) seems to pertain only to actual retirees who go back to work -- meaning they stopped work, and then resumed covered employment and so pension benefits were suspended. If a suspension of benefits notice was not sent to participants at NRA who continued to work after NRA (without stopping work and without receiving pension benefits), are these participants entitled to an actuarial adjustment for the time they worked after NRA, as well as the accrual of regular benefits while they worked after NRA? What is the sanction for not sending a suspension of benefits notice to participants who continue to work in covered employment after NRA?

Employer wants to offer a self insured medical reimbusement plan only to employees who participate in an employer offered/paid health risk assessment.

Any problems with this?

I always wondered why the correction of 415 excesses start with deferrals. It seems like it's punishing the participant and helping the employer.

1) It is increasing the participant's taxable income for the year.

2) It takes out fully vested money and leaves in partially vested money.

3) It allows the employer to take a larger deduction

Any ideas why they made it that way?

Have a plan with about twenty-five or so partners who file a K1. Most of the partners have ownership but below 5%. A 1% owner (or really between 0-5%) would become a key employee if their "wages" exceeds $150k. For a partner, what "wage" should you use?

For example, a partner with 2.5% ownership has $162k reported on K1. After reducing by his share of the non-key employer contribution, 1/2 SE tax, and their own employer contribution, his "plan compensation (or testing compensation) is $146k.

If I use the 162k, he would be a key. If I use the $146k he is not. The plan is going to be top heavy no matter what but wanted it to be precise since we recently took this plan over.

Hi,

Need some assistance, is there any programs that will help pay for dental surgery? I don’t have any insurance for dental, I need all my teeth pulled due to a gum disease, the pain is bad cant afford to pay for the surgery. Please give valuable suggestions.

Thanks in advance!

Assume following:

1. 100% asset sale

2. seller going out of business

3. buyer will assume CBA for purposes of employing seller's employees

Absent a 4204 agreement, the sale will result in complete withdrawal of seller from m/e plan (seller-side liability). In other words, even though buyer assuming CBA, it is not assuming contribution history of seller, and buyer's withdrawal liability will just be based on its own contribution history. Is this correct?

As of 1/1/2012 company A has 100 eligible employees. On March 31, Company A lays off 21 eligible employees, or 21% of its work-force. Calendar year plan. The newish IRS standards suggest that we might not know if we have a partial termination until the end of the year. The Plan has a liberal eligiblity and if they hire even 2 or 3 people the %age drops below 20%, where there is a rebuttable presumption that there is NO partial termination.

So how do I process distributions between now and the end of the Plan Year? What vesting do I use? I believe no matter which way I turn I have exposure, because I literally do not know what their vesting should be. And people who get laid off have a habit of wanting to take their money out of the Plan...

Has anyone been in this situation before?

Here's an interim amendment correction issue that is perplexing me.

DB plan cycle A. Restated for EGTRRA and filed for and received a favorable letter.

Before end of cycle A for PPA (1/31/12) signed 8905 certifying intent to adopt pre-approved plan. This qualifies plan for 6 year cycle for PPA.

After the 1/31/12 end of PPA cycle A, it was discovered that 415 amendment was adopted late. 415 was not required for Cycle A EGTRRA restatements.

Is it too late to use a streamlined VCP (with Schedule 1 and $375 fee) to correct this interim amendment?

A. Yes - the "applicable" cycle for this interim amendment ended 1/31/12 and the 8905 doesn't change that.

B. No - the 8905 entitles the plan to a 6 year cycle, so the plan has until 4/30/12 (the EGTRRA 6 year) to adopt this amendment.

C. No, and the "applicable cycle" for this plan is the second 6 year cycle - ending about 6 years from now. The VCP would still be streamlined if filed by then and not pickled up on audit first.

Follow up question - if you picked B, is a restatement to an EGTRRA pre-approved required by 4/30/12 even though the plan has an EGTRRA letter?

Thanks for your opinions.

was a form 8905 required to extend deadline when converting from IDP to prototype. the plan had a cycle C (1/31/09) deadline.

Does anyone know whether Amendment to IAS 19 requires an employer to disclose an estimate of withdrawal liablity for participation in a multiemployer pension plan? The International Accounting Standards Board released this Amendment in June of 2011. I can't quite tell if a withdrawal liability amount must be disclosed or just a description of potential withdrawal liability or wind-up liabilities. Thanks for your help.

We have a partnership client where the partners made PS contributions above their deduction limits in 2010. They are amending their tax returns for 2010. What is the mechanism by which to fix their plan? Actions that need to be taken?, etc…

Thanks

I'm trying to help a small church set up a 403(b). I have a few questions:

Is it possible to set up the plan document to give one employee (head pastor) a lump sum contribution each year? ie: we will put in $10,000 each year?

Ideally, we would like to do the following:

-3% match for all church employees

-Allow employee contributions

-Lump sum each year for the head pastor

Is it possible to do this? I have no clue where to look for sample plan documents. For something this basic, do we need to hire a firm to do it, or could I do it myself?

Ideally, we will do this through vanguard 403(b)(7) accounts for small businesses.

Good morning all!

Does anyone by chance know what the rule is for preserving distributions to a 401(k) plan? Specifially, we have a terminated money purchase plan with about a dozen account balances of missing participants (only one a bit over $1,000, the rest under). I know that under DOL guidance, you can roll over these amounts to IRAs, among other options. However, that guidance assumes that there's no other defined contribution plan into which the account balances can be rolled over, and we have a 401(k) plan. However, I thought that a distribution of this sort is limited to certain forms under the Internal Revenue Code.

If someone can shed any light on this problem, that would be great. Thank you!