Cross tested PS/CB plans. CB plan is one year/dual entry with 1000 hour requirement for allocation, PS plan has no entry requirements and only a last day requirement for contribution. There are several HCEs (all but "Main Guy" excluded in the CB) and a bunch of employees, but the only PS groups are "Main Guy" and "Everybody Else."

Client wants to minimize the PS contribution for "Everybody Else."

Using otherwise excludable testing, If "main guy" is maxed out and those people benefiting in the CB plan get "bumped up" to the gateway the plan doesn't pass 401(a)(4) testing.

Are there are other options besides?

1) Reduce "Main Guy" in the PS so gateway is enough to pass 401(a)(4)

2) Give "Everybody Else" including all those HCEs the same amount above the gateway to pass 401(a)(4) (nearly doubles the cost of "Everybody Else" as opposed to gateway for non-OEE alone.)

In order to assess that a document is compiant I am trying to verify the statutory amendmenst from GUST to EGTRRA

Say a sponsor has an approved GUST doc and has not yet restated for EGTRRA

The statutory amendments in the interim to my recollection include:

EGTRRA good faith

401(a)(9) regs - i thought there might have been one for that, unless included elsewhere

applicable mortality table - I belileve it was 2002-65 rev rul or some number in 2002

401a31 auto rollover

415 regs

NRA regs

PPA, including HEART

436 regs (i think in certain situations)

Then when plan restated for EGTRRA the PPA amendment survives the restatement as part of EGTRRA doc

look forward to comments

thanks

What is the difference between an indepenent contractor and a leased employee?

Client called and said that an ee who was formerly a 1099 contractor is now a full-time employee. We're debating whether or not we need to recognize service for eligibilty and vesting under the leased employees rule the way we would, say if the employee first worked for a temp agency.

How do we REALLY know the difference between a leased employee and a 1099-contractor?

I think if:

1) The 1099 employee worked on a "project" for the recipient, they would have been under the primary direction and conrol of the recipient, and they would have been working pursuant to an agreement (i.e., you work and I'll pay). The third requirement (substantially full0time for at least a year) is expressly ignored for purposes of recognizing service. So in this situation, I WOULD recognize service.

2) Now if the employee happened to mow the lawn for the company on the weekends and happens to get hired in some other capacity then clearly, he would be a new hire with no service.

Maybe I'm over-complicating this, and if so, please tell me.

I have a participant requesting a hardship distribution for the purchase of her principal residence. Her husband's name is on the loan documentation but she is not. I'm assuming this qualifies but just wanted to make sure. Her name will be on the deed but just not on the loan papers.

plan sponsor makes election

to use interest only plus 7 yrs

in january 2012

for 2011 sab based on 12/31/2011

valuation. can sponor rescind the election

before 9/15/2012?

Can an employer have 2 403b plans? They want one plan to be ERISA and receive employer money, and one to be non-ERISA and only have employee contributions. This is all because the executive director wants to keep her TIAA-CREF account. So basically, she wants two 403b's, one just for her to contribute her money into, and one for everyone else that will be ERISA and have matching employer contributions.

I think she should just eliminate the TIAA-CREF 403b or roll that out so they can have one 403b for the organization, but she wants her TIAA-CREFF. Is this doable? Any compliance issues you can think of?

We have a multiple employer group 401(k) plan with a participating employer who will not pass the ADP test in 2012. There are 6 participants (2 HCE/4NHCEs) with only 1 HCE contributing in 2012 at this employer. Participating employer wants to terminate membership in this multiple employer plan, run a part-year ADP test, refund 100% of the excess contributions to the HCE during 2012 and set up a short year 2012 SIMPLE IRA.

My question is: Would this be permitted under the "exclusive plan" SIMPLE rule for calendar year 2012 with the idea that no benefits accrued under the 401(k) plan in 2012 since 100% was refunded as excess contribution?

Any thoughts?

I had some work with a school that has a 403(b) plan. They have lots of problems (just finished filing 8 years of back 5500's for one). The plan calls for mandatory employee contributions of 3% of pay with a "match" of 3% of pay. 1 year wait. I understand that for plan purposes the mandatory employee contributions are actually non-elective and do not count toward maximum deferral limit and are not subject to universal availability rules. However the plan does allow for employee deferrals in excess of 3% of pay which I would think is an elective deferral. As the elective deferral is subject to universal availability - wouldn't they have to allow employees to start deferring immediately and not wait the 1 year?

Thank you.

If a QDRO is presented to an employer after the employee is terminated, account balance has not been paid out, does this release the employer from his obligation to process the QDRO?

I have a small profit sharing plan using a non standard document.

The owner is in the plan and 2 common law employees.

One of the employees terminated in 2011.

Is she entitled to an allocation if :

She worked under 500 hours ?

She worked 800 hours ?

She worked 1200 hours ?

Thanks,

Bob

Instructions say that to report mutual fund indirect comp on Schedule C we only have to report name and employer ID of entity that provided prospectus. Would the entity be the employer in a single employer Plan? Or would it be the Mutual fund company? or other?

(Not recordkeepper platform, just some of the money invested in mutual funds.)

Simple question... here is the situation:

The business is a partnership and there are 2 partners

Partner A is a 60% partner

Partner B is a 40% partner

No other employees

Partner A wants to make a contribution

Partner B does not

Can this happen?

Hi,

Need help from you guys regarding ROTH IRA.

Background:

I contributed $5000 for 2011 tax year but ended up unemployed for the whole 2011 which means my 2011 compensation is $0. This also means I have excess $5000 contribution to my ROTH IRA. Now I am trying to calculate how much I should withdraw before Apr 17 since the stock I buy with the contribution has lost its value to $2000.

Market value of my ROTH IRA prior to contribution 35267.85. Market value today (including the $2000 value stock) is 34175.87.

I read an article regarding this situation. It says to calculate Net Income Attributable (NIA) (or loss for my case) and add/subtract from the excess contribution to arrive to the amount I need to withdraw. The NIA literature: http://www.retirementdictionary.com/defini...attributablenia

My NIA turns out to be -$154.81 which means I still need to withdraw $5000-154.81=$4845.19.

QUESTION: Is this correct? It seems like it is not a very fair calculation since the the value of stock (I buy with the excess $5000) has lost its value by almost $3000 and I get to only deduct $154.81 for the withdrawal.

Shouldn't the withdrawal be whatever the current value of the stock I bought with the excess $5000 contribution? The account statement shows a clear cut where the $5000 go and there is no dividend from the stock.

Please advise. Thank you.

I just recieved a cobra event notice for a gentleman who was termed on 9-18-2011!!!!! Needless to say the letter I need to send out is late.

However we were only able to push the date of cancellation for his health insurance back to 3/1/2012, His vision back to January and his dental all the way back to the original term date.

Needless to say I am completely confused as to what to put on the letter. Do I not offer him the vision and dental since there would be a large gap in coverage? Do I offer him the medical only? Do I send the letter including everything?

HELP

A corporation sponsors a defined contribution plan. There are no employees other than the 100% owner. The owner is beyond age 70 1/2 and receiving required minimum distributions from the plan. All RMDs for 2010 and prior years were distributed on a timely manner. During 2011, the owner dies (before receiving the 2011 RMD) and the owner's spouse (who is the sole beneficiary) is required to receive the 2011 RMD before December 31, 2011. The 2011 RMD is calculated by the TPA and communicated in writing to individuals handling the affairs of the deceased owner.

Partially as a result of being unfamiliar with the plan operations, the owner's spouse did not receive the 2011 RMD prior to December 31, 2011. The client would now like to correct the defect by submitting the plan under VCP. The intent is also to get relief from paying the 50% excise tax on the missed RMD.

According to the VCP guidelines, if there has been a failure to satisfy the minimum distribution requirements, the IRS will waive the 50% excise tax if the plan sponsor applies for relief through VCP and requests the waiver as part of the submission. If the affected participant is an owner-employee or a 10% or more owner of a corporate plan sponsor, an explanation supporting the waiver request must be attached.

If the plan is submitted to the IRS under VCP, is there a possibility that the IRS may not accept the client's explanation and then impose the 50% excise tax on the missed 2011 RMD?

I looked through the IRS website this morning, and found the 2011 Form 5500-EZ with instructions. I contacted FTWilliam and they said the form should be available on their system by the end of next week.

In a balance forward profit sharing only plan, is there any guidance relating to whether earnings are allocated to the forfeiture account? How is everyone else treating this? Thank you.

First year for a Cash Balance Plan, using an end of year valuation date. The nature of the MRC calculations means that the minimum required contribution is actually lower than the sum of the credits for the first year. Vesting service is excluded prior to the effective date of the Plan so in Year 1 the FT = 0, which means the MRC is just equal to the TNC (again, which is less than the sum of the credits allocated on Year one).

Is it ok to consider the Plan "at-risk" for the first valuation so the maximum deductible contribution turns out higher than the minimum required? Or are you stuck with a maximum equal to the minimum for year one, and not being able to fund the sum of the credits.

Participant took a hardship. Presented a bill for college tuition for $2,500 for their child. The participant mistakenly received their entire account balance instead of $2,500. Needless to say they received more money than what they provided documentation for.

The participant used all of the money they received for reasons other than the hardship. In other words the participant's child never went to college.

If a participant takes a hardship but uses the money for "other" reasons, what are the ramifications if the participant cannot return the money? Would the employer be responsible for reimbursing the plan for the total distribution or just the amount in excess of the hardship request?

Plan missed top heavy contribution for several participants over several years. Sponsor will correct under VCP, but wants to use forfeitures

to correct (the missed contribution plus earnings). Plan document permits forfeitures to be used to reduce employer contribution.

Thanks in advance!