I wanted to invest $800k in life insurance can anyone help me in getting this. I don't know much about it curious please help me with some good and affordable recommendations.

Can a private letter ruling be issued for a plan that has not yet been established? Section 6.02 of Rev. Proc. 2011-4 states that the EE Plans will issue letter rulings on proposed transactions and on completed transactions, which seems to suggest it can. However, section 8.03 states taht a letter ruling will not be issued on alternative plans of proposed transactions or on hypothetical situations.

Does anyone know if such a ruling request be considered to relate to a hypothetical situation merely because the plan has not been formally established?

Just out of curiosity, has anyone established a new MP or TB plan recently? Or have these plans gone the way of the platypus?

VFCP generally provides, to correct defaulted participant loans, the plan sponsor must make a voluntary correction of the loan failures using VCP before submitting under VFCP...

Question is - if loan failures are discovered during an IRS audit and subsequently corrected through Audit CAP (instead of VCP), can the sponsor still submit under VFCP to prevent 502 civil penalties or does a sponsor's receipt of a Closing Agreement somehow preclude submitting the loan failures under VFCP because the submission under EPCRS wasn't voluntary? And if VFCP is unavailable, how can the sponsor clear up the fiduciary violations with the DOL?

Thanks in advance..

Hi again,

I have another question re: SCP.

Rev Proc 2008-50, Section .05(d) under Appendix A states provides that if an employee was not provided the opportunity to elect and make elect deferrals...to a safe harbor 401(k) plan that uses a rate of matching contributions to satisfy the safe harbor requirement, then the missed deferral is equal to the greater of 3% of compensation or the maximum deferral percentage for which the employer provides a matching contribution rate that is at least as favorable as 100% of the elctive deferral made by the employee...the required QNEC is 50% of the missed deferral + the matching contribution.

My client's SH match is 100% up to 3%, then 50% of anything >3% and not over 5% of pay. My confusion lies in the bolded text above-do I only look at the portion of the match that is matched at 100%, or do I take the 50% into consideration as well?

The associate that I replaced had figured the QNEC to be 1.5% (he used the 3% of comp as the "greater of" number, but I'm thinking that the match rate is higher if we do not disregard the 50% on the 4% and 5%, as provided for in their matching contribution formula). If my thoughts are right, oy vey, would the calc for QNEC then be 3% + 1% (50% of 4 & 5)? I.e., 3% (for the 100% match) then 50% of anything over 3 but not more than 5, so 2 would then become the 1%, and then I take half to get to a blanket 2% corrective contribution for those who were affected but will remain under the 402(g)?

Advice from a seasoned pro for a green rookie? Thanks in advance.

Calendar year PS plan is terminating 12/31/2011. there are several former employees whose 5th break year occurs on 12/31/2011. Plan termination datre is 12/31/2011.

Can their forfeiture occur, or must they vest 100%? I suspect an argument could be made for either, but the conservative approach seems to be that IRC 411(d)(3) says "...benefits accrued to the date of such termination...are nonforfeitable."

Has anyone ever had a real case where the IRS has opined one way or the other?

Partner has a negative k-1, earned income figure for 2011, but has already funded their 401k. How does this work in the absence of a w-2? Just do the refund by 4/15/12? But then the 1099 will say "taxable in the prior year" but there won't be a w-2 showing a deduction for the corresponding amount?

In case you have not seen this from 12/22/2011 Federal Register, it's worth reading:

http://www.pbgc.gov/documents/2011-32804.pdf

Just my opinion, but it seems PBGC has overstepped their authority.

Is it accurate to say that my belief with respect to SCP is that nothing "formal" needs to be prepared-that so long as the failure is corrected, and some form of documentation exists to show that it was identified/corrected/methods put in place to prevent reoccurrence will be sufficient. I inherited an outstanding issue from a former associate and it almost looks like he was tracking a "form" of some sorts-so I just wanted to make sure I wasn' reinventing the wheel by simply stating the issue, what has to be done to correct and what has been put in place so that it does not happen again.

Thank you and happy holidays.

Am I correct to think that even though the instructions for Form 5500-SF say that it requires no other schedules or attachments, Form 8955-SSA would still be required to be filed (separately, not with the SF)? And that the 8955 is not applicable for plans that file Form 5500-EZ?

May a Texas association of churches that provides Plan documents and Plan administration for a 403(b)(9) Plan that can be adopted by its Members for their employees serve as the Trustee of the Trust embodied in the Plan?

Accroding to the IRS newsletter

http://www.irs.gov/pub/irs-tege/epn_2011_9.pdf

File Your One-Participant Plans Electronically Using Form 5500-SF; They Are Now Excluded from Online Search Database

Beginning January 1, 2012, Form 5500-SF information for “one-participant plans” will not be available to the public on

DOL’s website.

I guess the questiion is do they mean after that date any SF that is checked one particpant plan is not available, or do they mean begining with 2012 filings.

Anyone have a form they are willing to share to let someone elect Roth conversions?

Typical law firm situation:

A law firm has an Associate plan with no Key employees and Partner + clerical plan. An associate will become a partner during the year. This will result in a Key employee in the Associates plan and require a Top Heavy contribution in the next year.

If the Associate is moved to the partner plan along with his/her entire account balance immediately upon becoming a partner does this avoid the need to include the Associates plan in the RAG and avoid the TH minimum in the Associates plan?

What if the Associate was moved just before he received his/her ownership interest?

Thanks for any opinion.

A small DB plan (PBGC covered) terminated 6/30/11. There were assets in excess of the PVABS. We want to amend to increase the 2011 benefit accrual to absorb the excess assets.

Is there any problem with this from a timing standpoint (i.e. the amendment increasing benefits will be adopted post termination, but effective retroactive to first day of plan year)? The plan termination will be submitted for a favorable determination letter, and I don't want any surprises on this issue.

Thanks!

Dog

Does anyone know if it's ok to have a Multiple Employer Plan where one non-related participating employer allows participants the option of Self-Directed Brokerage accounts while the other participating employers do not give this option to employees? If I understand, an MEP is treated as a single employer for eligibility, exclusive benefit rule, vesting, and Section 415 limits. To my knowledge, allowing SDBA's for only employees of certain employers wouldn't violate any of these. Am I correct or perhaps overlooking something? Any input is appreciated!

married couple has an 1120 company. He w2's 50K, wife is 20K. Net profit is appx 170K after they pay themselves. He also has sole pro income of appx 100K net, 140K gross. He also receives w-2 from outside sources. They are interested in reducing their taxable income. Neither participate in any other qualified plan nor do they plan on having employees. He is a software engineer and the major reason a corp was established was to avoid the Sched. C, however, not every company the husband contracts with are willing to pay him through the corp.

I'm thinking a PSP would allow them to put 25% of 70K away for the corp and then he could possibly set something up for the sole pro. Is there anything that would not permit that?

hi,

a small calendar year MPPP that was frozen mid plan year 2010 had a new participant in 2010 that received their first and only contribution. The 2010 contribution was not funded until Sept. 2011.

Let's say the new participant's contribution for 2010 was $1000, so at 12/31/10 his account balance was $1000. Historically, the plan has allocated earnings on an account percentage based on the beginning account value. Since the participant was new in 2010, he received no yield. The sponsor requested 2011 interim statements as of 8/31/11, therefore the participant had a beginning account percentage based on his 2010 contribution of $1000. Since the plan lost funds for the first 8 months we allocated a loss to his account, though technically the 2010 contribution had not been funded. How erroneous is this? The investments are pooled and the document states earnings are allocated using a weighted average. Should we have excluded the participant from allocating a loss to his account and just gave the older participants a greater share of the loss? For plan and reporting purposes, the 2010 contribution receivable was considered a plan asset.

Thanks in advance for your thoughts.

Am I wrong, or did the IRS limit the number of outstanding loans a participant may have to three in their recent regulations regarding loans? I have a client at three and someone wants a 4th. Thanks for any assistance!

I have a client that has maintained a 401(k) plan with me for some time. From about 2007, part of the plan's assets, which were all commingled, were invested with a certain investment firm. When my client started the account, he indicated on a preference questionnaire that he wanted the monies to be invested conservatively. It appears that the investment firm ignored his wishes and invested the plan's assets fairly aggressively. Over the last couple of years, my client has been requestng different types of paperwork from me such as, historical brokerage statements, reconciliation worksheets for those assets held by the investment firm, etc. After doing alot of research, my client decided to sue this investment firm. I received a call today from his attorney asking me about the entry on the 5500 forms filed over the years that indicates that there has been no fraud or dishonesty. He wants to know when this box would actually be checked. The opposing side is suggesting that if this box was never checked, then the Plan Sponsor felt there was never any Fraud or Dishonesty, so why is he crying foul now?

Here are my questions:

1. My contention is that you don't check the box indicating fraud and dishonesty because of a "gut feeling" that your plan's assets are not doing as well as you had anticipated and you want to blame it on the investment firm. Correct?

2. Not having received any indication from the plan sponsor other than having me gather historical information and his suspicion that the investment firm might not have followed his instructions, I checked "no" for every 5500 I prepared. Do you agree the correct approach was taken?

3. What would need to occur for that Fraud and Dishonesty box to be checked? Does there have to be something definitive from the courts? A judgement against the injuring party? Is the IRS clear as to what constitutes Fraud and Dishonesty so that the box would be checked with a "yes"? If you know, please direct me to where the IRS says this.

Thanks for the help,

Rick