Plan currently does not allow for loans.

Want to add that participants can take loans from Rollover account only.

Two owners have Rollover Accounts

25% of other participants have R/O accounts.

Do I have to pass nondiscrimination tests - as all are allowed R/O accounts - they just don't have them.

Thanks

Pat

I have a client who amended their 401(k) on 1/4/10 to allow for catch-up contributions effective 1/1/2010. On 4/8/2010 they restated the plan for EGTRRA and did NOT include the catch-up provision (I’m not positive, but I think it was simply an omission when the document was prepared). On 9/21/2010 they signed an amendment to the EGTRRA document allowing the catch-ups, but made the amendment effective 1/1/2011. Should that amendment to the EGTRRA document be effective 1/1/2010 instead? The client is using a PPD non-standardized prototype.

I had someone come to my office today that has a "keogh" plan. He is self-employed and about to take minimum distributions.

1. He thinks he has plan documents but doesn't even know when the plan started...my first gulp.

2. He has employed two full-timers for the last twenty years who have never been given a statement.

3. Since the employer didn't know what a 5500 is, I think it is safe to assume no 5500 has been filed.

I think we will find some documents, but I am sure he will be a non-amender at some point. With regard to the participants, he is willing to reallocate to include the employees as of their eligibility date.

Can I file under VCP for both the plan defects and non-compliance together? Then would I need to file old 5500's under the DFVC? How far back?

Any advise (other than run for the hills) would be appreciated.

A client has an immediate annuity IRA that was opened with a transfer of an existing IRA, not a pension.

Are they allowed to rollover the payments they are receving from the annuitized contract into another account?

Thanks!

I suspect I am breaking one of my own rules with this question. I suspect the rule I am breaking is am over thinking this problem but…..

With most DC plans it seems to be the conventional wisdom is coming down to the idea if you send a participant a PPA statement with their balance and a set of distribution forms you have met the statement notice requirements referred to with question 8 of the 8955-SSA.

But many ESOPs require a wait from the time of termination to payment—wait 5 years, wait until the loan is paid etc.

So one does not send a set of distribution paperwork to them before you have to report them on the 8955-SSA. We have a copy of Relius’ notice format that they say meets the requirements. So we were going to send one of those notices to people who have to wait for their payment. However, for this notice one needs to report something that reflects what you put in Part III column (d) & (e). For most DC plans you put an A and A—Single Sum and Lump Sum.

And historically that is what I have put and no one has questioned it as what most DC plans do.

But it is rather common for an ESOP to pay over 5 years. So should one have been answering this questions B and B—Annuity payable over fixed number of years and Annually?

You normally think of those answers only in the context of a DB plan. And for one thing the amount paid each of the 5 years isn’t going to be the same so what amount would you put for the answer in either 9(f) or 9(g)?

Just double checking.

What line item on the 5500 do participants receiving RMD's get reported on? Are they included in the terminated entitled to future benefits, or terminated receiving benefits?

We have a nonqualified plan. The plan has the following provisions for mistaken or omitted participation:

If you are participating and Employer determines should should not be, your deferrals will immediately stop.

If you are not participating and Employer determines you should have been, you will receive a special contribution.

Is this allowable under 409A?

Any thoughts as to how to proceed on this are appreciated.

401(k) Plan was started in 2003. The plan used a national volume submitter document that has an IRS advisory/opinion letter.

The document was timely amended and then in early 2010, restated to an EGTRRA. They were advised to file for a determination letter with the EGTRRA document.

After a years review, the IRS reviewer noticed that they do not have a signed copy of their GUST (which was also their initial) plan document. No one can locate the signature pages for this document, neither are there any Minutes or a Resolution from 2003 showing that the plan was actually adopted.

What options do they have now:

I think they need to go through VCP as that would be the best remedy. However, in regard to the determination letter filing, what do we do now? The agent cannot issue a letter without the signed pages. Do we just ask that the D. Letter request be withdrawn and the IRS will let it go at that? Or do we now tie the VCP filing to the det. letter request?

Alternatively, has anyone had any luck with drafting a letter from the current board stating that it was the Sponsor’s intent to adopt the amendment at the time, that the signed document cannot be located, and that the plan was operated in accordance with it since then.

Thanks

Is an HRA similar to a FSA? Where do I get a document? I am assuming that a Form 5500 has to be filed. Is that correct?

health reimbursement arrangement

Is an HRA similar to a FSA? Where do I get a document? I am assuming that a Form 5500 has to be filed. Is that correct?

Our client received a child support enforcement levy letter from the State against a former employee's vested balance in the Plan. Balance has not yet been paid out.

Should the client refer this back to the participant to obtain a DRO or does the State have the authority for this request without a DRO?

The levy references "section 5232(a) of the Civil Practice Law and Rules" & the client is in NYS.

The client will consult their attorney, however I'm curious what others have done in practice in these matters.

any input appreciated.

So far in 2011, we inadvertantly used the wrong salary number (base versus gross) when withholding from employees' paychecks for 403(b) elective deferrals, with the result that elective deferral contributions were understated. We need to correct this by contributing the correct amount to the plan provider, preferably in 2011. How do we handle getting the additional contributions from the employees? There is not enough payroll remaining in 2011 to catch up and still leave the emplyees with enough money to live on. Are we stuck with our company making the contribution in 2011 and withholding the money in 2012 to make the company whole. Would that mean the employees' W-2 is higher in 2011 than it should have been, and in 2012 lower than it should be?

Thanks,

Ken

Facts: Audited 401k plan pays fees out of the plan (including audit fee)

Source 2 - 401k

Source 3 - Match

Source 5 - Rollovers (unrelated)

Current plan count is 200 participants with $1MM in assets

The plan has approximately 10 participants that would like to roll money into the. Assume each rollover is $100k. About an additional $1MM could be added to the plan. They are hesitant to roll the money into the plan because the rollover would increase their share of the plan fee. The rollover alone is 5% of the total plan balance. That doesn't take into account any other fee they may have (ie mutual fund expense, etc). It would be cheaper to keep in an IRA. However they like the protection of the 401k plan (and keeping all their eggs in one basket)

Questions:

1 -Can we choose which "sources" plan fees are deducted from? Can we say or choose plan fees will not be deducted from rollover sources?

2 - Can we say only participants that contribute 401k and receive match share in the plan fees?

I believe there is an advisory opinion out there (or some other authority) somewhere wherein the DOL (or other governmental entity) indicated that it is okay for a selling entity to continue the former employee's in its plan for a short period of time (realizing that it might take time to get the seller's employees in the buyer's plan) after the transaction, but I am having a difficult time finding it - any help would be appreciated! Thanks

I believe there is an advisory opinion out there (or some other authority) somewhere wherein the DOL (or other governmental entity) indicated that it is okay for a selling entity to continue the former employee's in its plan for a short period of time (realizing that it might take time to get the seller's employees in the buyer's plan) after the transaction, but I am having a difficult time finding it - any help would be appreciated! Thanks

What kind of disclosures need to be provided for whole life insurance policies? I've not been able to find anything concrete. Thanks.

Hi...

I am not exactly where to find this in the regs. When running an ABT test, can you use the net amounts after the NDT failure? In other words, plans fail the ADP/ACP test and make ROES, can I use this reduce contribution amount when running the test?

Thanks for you help...

Two questions:

1- If a client was previously filing a full 5500 (had other plan participants), but now the only participant is the owner, therefore filing a 5500-EZ, is still necessary to reverse this participant?

2- Participant reported in 2000, paid out in 2001. Since it was volunatary to reverse the participants back then, is it necessary now to reverse this participant 10 years later? If so, how far back do we go?

Any help or guidance would be greatly appreciated.

Thank you.

DPSRich

Dear All,

DOL regulatuions and case law have held that owner-only retirement plans are unprotected by ERISA outside bankruptcy proceedings.

Is this still the case?

Many thanks!