A client of ours does a lot of work of on prevailing wage jobs. They have a 401k/PS plan and contribute the prevaling wage contributions to the plan. They are also known to make untimely 401k deposits and possibly prevailing wage contributions. I've been doing some reading on prevailing wage and maybe I'm thinking too much into it but am a little confused as to the timing of the deposits. The most common answer that I've seen is that the prevaling wage contribution submitted to a qualifed retirement plan must be made at least quarterly.

My question is that if you have a paydate in January which contains prevaling wage I understand that the prevailing wage contributions must be made to the plan no later than March 31st but what if your pay period is the middle of March. Do those prevaling wage contributions from March also have be submitted to the plan by March 31st? Must all prevailing wage contributions within a quarter regardless of the paydate be submitted by the end of that quarter?

DB Plan Sponsor (medical practice - 10 participants) wants to invest a portion of the plan assets in Real Estate Development group. Although not a controlled group he is 40% shareholder. PT or not?

Plan is prior year tested. Owners started company a few years ago. They start a plan during 2010. First year they elect to use the current year test method. All non-HCEs are eligible and newly hired during 2010. None have met the statutory minimum requirement for 2010.

For 2010, I test the HCEs (owners) against the statutory NHCEs. Since there are no 2010 statutory NHCEs, the ADP test is deemed to pass for 2010. No real issue there.

The total 2010 NHCE group averaged 5.14%, but non have met the statutory minimum requirement.

{During 2011, only one of those 2010 NHCEs met the statutory minimum requirement on 7/1/11.}

My question is for 2011 testing, when I am now using the prior year test method.

Can I say that since there are no statutory EEs during 2010, then the test is deemed to pass for 2011? Or, do I have to use the 5.14% rate? Or did i miss the boat entirely?

Thanks for any assistance and citations on this. I'm up against an ERISA attorney.

A participant in a 401k has passed away. Her spouse, the bene, rolls her 401k into a brand new IRA. Upon advice from his broker, he now wants to transfer her 401k money (which is now in his IRA) to his 401k. His 401k allows for rollovers. The question is, since he is older than 70 1/2, does he have to take his 2011 RMD from the IRA he created with her 401k money? Or can he transfer 100% of her 401k money to his 401k without having to take the RMD for 2011?

Thanks.

May an otherwise eligible full-time employee elect out or opt out of retirement benefits in exchange for receiving a higher salary?

I know this has been done before, but I think it's good to keep talking about it

Safe Harbor Plan has no profit sharing option. Am I barred from adding a profit sharing feature? I know the IRS has taken a hard-line interpreting the 401k regs regarding amending SH Plans, but is there anything beyond public statements from IRS officials supporting that strict of an interpretation?

I'm aware of the notice that was released regarding the permissibility of adding hardships and Roth, but that notice left the door open for other changes as well.

Under the 409A regulations, an employer can change the employer's contribution until the later of 1) the employee obtains a legally binding right to the amount or, 2) the latest date the employee could make an election to defer.

The employer wants to give a match, but wants to be able to change the match % on a payperiod-by-payperiod basis. I think the employer can do this so long as the change is prospective only (i.e. it only relates to compensation earned after the change). This is because the employee does not have a legally binding right to the compensation deferred, to which the match applies, until the employee actually earns it. Does anyone see a problem with this? (please also let me know if you agree).

Does anyone have any experience reporting multiple top hat plans electronically under the DVFC program?

The DOL Q&A's allow a single filing for multiple top hat plans, but the calculator prompts for a single plan name and does not appear to contemplate multiple plans. By "continuing" I am concerned that I will not have the opportunity to add the other plans. Has anyone advanced to the next screen and can tell me otherwise? Because the submission is coded 888 or 999, it's already identifiable as a top hat submission, so I'm wondering whether it's okay to just list a generic name, such as "Deferred Compensation Plans" or something to that effect.

Defined benefit plan, first plan year was 2009. S-corporation, a single 100% owner, not "professional" and at the time of plan installation, they had one employee who accrued a benefit, so the administrator listed them as PBGC covered and paid PBGC premiums. Apparently, did the same for 2010 and I don't know about 2011. The employee terminated as zero per cent vested in 2009, and under the terms of the plan, his benefit was immediately deemed distributed/forfeited.

Fast forward to 2011. Ignoring other aspects such as permanency and whether PBGC premiums were paid in error, he wants to terminate the plan. Is it subject to PBGC? I don't see how, but I've also never happened to see this, and wondered if anyone had an opinion? I'd say no - I can't see any reason why you can't flop back out of Title IV if you satisfy the exception.

Have a standard 401k plan whereby a trustee is asking for the availabilty to purchase an equity membership in a golf course with his participant allocations.

How do I shoot this down or accomodate?

What are some of the pitfalls?

We're looking for a secondary tax advisory provider. We're currently using EBIA. Can anyone recommend a 2nd, 3rd choice, etc.?

Looking for some guidance. Company A is acquiring Company B - deal to close mid-December. On January 1, employees of both companies will be on the same benefit plans. However, for the last 2 weeks in December there will be 2 sets of employee benefits - therefore employees, potentially in the same class, will be eligible for different benefits. Is there some grace period after an acquisition where Company A has time to get all employees on the same plans or does it have to be in place the day the deal closes? Thanks

I am very confused. I have researched thisand cannot find an answer.

1. Can an greater than 2% shareholder in an s corporation participate in a HRA account?

If not is it treated the same way as accident and health insurance prem. Add to box 1 as taxable income not subject to FICA and Med. and then it is taken as an AGI deduction on the 1040.

2. Same question exception can the shareholder have a Health Savings Account.

A terminated participant received a total distribution of his balance in a 401(k) plan. The amount distributed was over $5,000. Subsequently, he received an additional contribution of less than $200 due to a match true-up. For his second distribution, which will be in the same taxable year as the first, is he required to receive a rollover option due to the amount of his original balance?

Hello, all,

I'm drafting/designing a 409A-compliance plan for an LLC. Under the Plan, participants will be granted the option to buy service-recipient stock at a future date (for date of grant FMV).

While the equity option design *should* satisfy the exemption from 409A, company/client wants to comply with 409A for a long list of business reasons, including the risk of inadvertant loss of the exemption (i.e. by an unintentional modification or extension).

(I'm generally treating the 'stock right' rules under 409A as analogous to the LLC setting based on IRS Notice 2005-1, Q&A 7 and the Final Regs Preamble Section III(G)).

Under the Plan,

-Each grant will specify a vesting date; and

- (change in control will accelerate vesting).

Here's where I've hit a conceptual stumbling block:

I am thinking (given the 409A 'permitted payment' concept,) that all vested equity units must be *exercised* (and included in income) in a single block (or, alternately, in sub-blocks, if different exercise dates are pre-assisgned, such as: "you may exercise 50% of units in Year A and 50% in Year B").

Client, of course, wants increased flexibility, and wants me to report back that the following would by OK:

1. once vested, participant may choose how many units to exercise when (i.e. participant could *decide* to exercise [and be taxed on] 30% [or other participant-elected percentage] in whatever year he or she chooses prior to the end of the exercise period.); or

2. If specifed exercise dates must be used, client hopes that the choice, *not* to exercise in a specified year would be permissible if such choice results in a forfeiture of the right to exercise those units [ever]).

Other than as described the BNA "Section 409A Handbook" on p. 425, below, I don't see how the client can have the flexibility under point 1. (Unless, of course, they abandon the idea of complying with 409A and just use the exemption).

As to point 2, I'm inclined to think that might work, but without any actual identified authority to rely on.

On point 1, the BNA "Section 409A Handbook" (which is great), provides the following on p. 425:

(Emphasis added).

Question 1: I'm just looking for a reality check to confirm that I'm not crazy, and that under 409A, the units must be either: (i) exercised only upon the pre-specified date/year (and that the participant can't just decide not to exercise them in a specified year [as least notwhile retaining the right to exercise those in a future year]); or (ii) the options may be exercised at any time [and I gather that income would accrue], but receipt of the actual equity would be delayed until the speicifed payment event. Thoughts??

Question 2: Anyone ever seen a 409A option plan under which, if participant doesn't exercise upon a specified date, the right to exercise is forfeited??

1 man plan with life insurance. After 9 years the employer is hiring some employees. He, being a generous soul, does not want to buy life insurance for his employees. He wants to amend the plan so that no future life insurance is purchased (before the new employees become eligible). Just on the face of it this seems discriminatory to me because there will be a benefit available to HCE's only. I can't see anyway to justify this. However, I promised I would inquire.

Anyone think that this is possible?

Thank you in advance.

Small top heavy plan has about $1,000 unallocated funds in trust which has been tracked to earnings on a 2003 profit sharing deposit that were not allocated along with the contribution. Plan sponsor cannot locate report from that year. Can this amount be allocated this year as 1) among current active participants as a forfeiture? or 2) as earnings to all remaining participants who were in the plan in 2003, based on current account balance, or 3) as earnings to all current participants, even if hired after 2003?

I would be very curious to know how other employers handle this? What is our obligation to educate employees on their annual max amounts into 401(k), 457(b) plans? Where is the line between personal advisor and employer administering a benefit?

Is there a line that could be crossed when educating employees on what their deferrals should be etc.....

Thank you

Two questions here:

1 - Can I do 2009 and 2010 on separate 2009 Forms? Does it matter if I combine them all on 1 form or do both separately?

2 - For Relius users - I have Plan Sponsor and Plan Admin info populated in the Plan Info worksheet so when I open the SSA everything rolls into the form. The IRS instructions state to put "SAME" on the 8955 SSA form for the Plan Admin info if the info is the same as the Plan Sponsor. Does it really matter if I populate both sections? I cannot edit the form so I would need to go to my Plan Info worksheet, erase all of the plan Admin data, write in SAME, and carry over to the SSA. Trivial I know but just trying to see if I can avoid doing that for 100 plans.

Thanks in advance for the input.

are there any statutory amendments that need to be adopted before 12/31/2011 or shortly thereafter any one knows of?

of course plans need to be restated by 4/30/12.

thanks