it seems clear that 401a9 allows a participant to receive their distribution at age 70 1/2 (if 5% owner and employed) over a certain period equal to life expectancy and with an annual fixed increase of less than 5% (i.e. 4.99%).

in order to accomodate such a desire does the plan have to provide such a form of distribution or is the fact that it complies with 401a9 acceptable?

And I presume that a formal benefit election to support this form of payment while actively employed is required as opposed to computing the amount and paying it each year?

thanks

I apologize if I am in the wrong area but I am trying to find contract work as a TPA starting her own business to tide me over until the clients roll in. Does anyone know where I should look or go or who I could contact? Thank You and feel free to email pensionpros@comcast.net.

Thank You.

If anyone can recommed an EA that will work via contract and sign my 30 1 to 3 man B's and Aftap's and such and not charge me a fortune, please email me. Pensionpros@comcast.net. Thank You.

An employer maintains two 403(b) plans, one with a year-of-service requirement (the "main plan") and one without (the "alternate plan"). After initially meeting the year-of-service requirement and becoming a participant in the main plan, if an employee falls below 1000 hours in any plan year, the employee is taken out of the main plan and placed onto the alternate plan. Does this violate the minimum service requirement since the employee can lose eligibility for participation in the main plan even if he/she does not have a break in service, or can the plans be aggregated for purposes of evaluating the minimum service requirement so that as long as the employee can participate in one of the plans it's OK? Based on my reading of section 410, it does not appear that the plan aggregation rules apply for purposes of section 410(a)(1). The main plan includes a mandatory employee contribution and the alternate plan instead provides for an elective deferral.

Hi,

Greater than 2% shareholder of an S corporation has an individual K plan. He receives 100k in salary. In addition, S Corp. has a medical plan and pays 20k for shareholder's insurance. The W-2 will show taxable wages of 120k of which only 100k is subject to FICA. The shareholder will deduct the 20k for the insurance premium included in taxable wages fro the W2 on page one of his 1040.

For the 25% profit sharing calculation the question is...

1) Is the contribution $25,000 (25% of 100K)?

or

2) Is the contribution $30,000 (25% of 120k)?

While it's tempting to say 30k as the W-2 wages box is 120k, my gut tells me correct answer is 25k as there is no FICA withholding on the 20k and it is also an above the line deduction on the 1040.

If you can site any code regs specifying the answer it would be appreciated.

Thanks you.

Caryn

Employer has one employee who spends 2/3's of time handling all aspects of profit sharing plan administration. Employer now wants to explore the following alternatives:

1. Employer charges Plan a management fee of .25% of assets;

2. Plan shares cost of employee's salary on some percentage basis, e.g., 2/3's of salary paid by Plan and remaining 1/3 paid by Employer;

3. Plan pays employer a set dollar amount for plan administrative services.

I am going to pull out the rules on prohibited transactions, but just wanted to see if any or all of these were dead in the water before I jumped into the research... Thanks for any help.

Sponsor has two frozen union plans, each with about 350 participants.

Looking to develop pros and cons of a merger. Each plan about 80% funded. No 436 restrictable benefits.

Pros including one valuation, one audit, one Trust, resulting fee savings.

Cons include need to pay estimated PBGC premium filings, perhaps additonal PBGC reporting, record keeping requirements of merger, IRS merger filing and documentation.

Anybody willing to add or elaborate?

Are there any reasons why a participant-directed plan would not be able to limit participants' abiltiy to invest in and out of employer stock fund, if the restriction is not more limited than any other core investment alternative?

If an individual who is ASPPA credentialled leaves a firm to start their own TPA Firm where they will only employ themselves bascially with a small book of clients, is there a state license you must obtain? Or do you just need the E & O insurance to cover you.

Is it possible to defer compensation (tax) for a partnership that uses the accrual method of accounting?

I have an HMO (a group plan through my employer) for which I pay $500 a month (payroll deduction).

My wife's company is switching over plans and one option is a high deductible plan with HSA.

My birthday comes first in the year, so my kids and I have always been covered under my plan.

Can funds in my wife's HSA be used to cover expenses for me and my kids even though we are covered under my plan? e.g. the $500/month premium, co-payments, etc.

Thanks

Can a definition of compensation satisfy 414(s) if it excludes amounts earned by ineligible employees who are nonexcludable for purposes of 410(b)? For example, our plan does not cover employees in Division C. Because there are not many employees in this division, we can exclude them and still pass the minimum coverage requirements. When we go to perform the 401(a)(4) testing, can we exclude their compensation? I do not believe that we can because it wouldn't likely qualify as a valid 414(s) definition.

Does anyone disagree?

Participant in FSA had lasik surgery in September. They are paying the bill over 2 years. They also have to go back to the doctor for regular checkups every 2 months, I think.

Do they have to submit the entire bill for payment in 2011, or can they be reimbursed over 2 years?

Thank you.

I want to see the DOL apply pension oversight rules to auto repair shops. Imagine the fee disclosure when you are paying "x" per hour for labor, for a three hour job, but one job has parts that cost the dealer $125.00 - which they mark up 100% and add $250.00 to the labor, and the other three hour job has parts that cost $1,000, which they mark up 100% and add $2,000 to the labor.

Hi,

We have a Not-For Profit Organization which has a money purchase plan. It was discovered recently that 2 part time employees were missed and improperly excluded from the Plan. We are correcting and filing under VCP.

Regarding Form 5330 for the excise tax on the funding difficiencies, does this apply to not for profits? I have the instructions to the Form 5330 and the instructions do not mention that this does not apply to Not For Profits. I'm not sure if I'm missing something.

Thanks!

A plan that I am assigned to has a participant with no beneficiaries on file. There is currently a balance of $4 remaining. The daughter of the deceased participant has called in to ask how to distribute the money. As there are no beneficiaries, the money must rightfully go towards an estate however the daughter refuses to create an EIN number for a $4 balance.

Question:

If they will not create an EIN number, is there anything else that can be done to distribute this account? The plan also does not have the auto cashout process?

Took over a small DB plan that excluded two physicians by name and highly compensated nurse practitioners. For the past 5 years, they have only had 4 physicians who met the eligibility requirements. All were HCEs and Keys. The plan passed 401(a)(26) in past years as 2/4 = 50%, which is greater than 40%. They now also have 3 nurse practioners who met the eligibility requirements. All happen to be HCEs and are therefore excluded from the plan. Any problem with bringing in one nurse practioner through an 11g amendment to pass 401(a)(26) even if they would be an HCE and in an excluded class? Would it be possible to do this every year?

Thanks

A small safe harbor 401(k) plan timely distributes the 3% SHNEC notice on November 15, 2009 for the 2010 calendar plan year.

The employer filed the corporate tax return 3/15/2011 and did not fund or deduct SHNECs. In fact, they still have not been funded. He simply forgot, even though we told him to back in January.

My understanding is that SHNECs can be funded up to 12 months after the end of the plan year. So if they are are funded this week:

1. Do any earnings need to be calculated and funded for the late deposit?

2. Would the safe harbor contribution be deductible for 2011 or 2012? If 2011 he will need to amend the corporate tax return.

Thanks.

My wife and I were in the process of agreeing to a QDRO with her ex husband. We live in NY. Our attorney sent the QDRO back to his attorney who had initially drawn it up to make a correction in the calculations. Unbeknown to us , apparently her ex decided to have someone in Fla, finish up the QDRO as opposed to his attorney and submit it to the court in NY. The judge in Rochester, approved the QDRO and submitted it to the pension plan administrator.

My wife was made aware of this from the pension plan administrator. The question I have is that should have the judge approved the QDRO without giving us the opportunity to review it ? We have no idea as to what it says as we are trying to obtain a copy from the pension plan administrator. What recourse do we have with the judge if we find out it is incorrect after reviewing it ? Can her ex have someone out of state complete the QDRO for submission to the court ? Thank you

Law firm, two partners, each funding their own SEP to $49K every year. Two NHCE employees, both with more than 3 years of employment, never received SEP contributions. The are looking at a DB plan now and in asking my questions this came up. I've informed them that their SEPs have issues, they want to know the risk/consequences.

Obviously the deductions for prior years are at risk and they should correct this, but they've been around long enough to know the probability of IRS finding this is virtually nil.

What about the employees? Do they have a claim for benefits and earnings? SEP document obviously provides that employees are covered. Seems like SEPs would be included in the ERISA definition of an employer plan for benefits, even though the funds end up in IRAs, does ERISA apply or does something else give them a cause of action? Of course the SEPs may never have been established by the partnership, that's another issue.