We just aquired a plan that has not filed a Form 5500 since 2003. They tell me they have never received a letter from the IRS regarding a delinquent filing. Is there anyway I can find out if the IRS did mail these notices or not? Also, if a notice was received, does that mean we can no longer file under the Delinquent Filer program?

I am not even sure that testing has been done on the plan since 2005.

Any advice as to where to even start? Or perhaps should we just resign before we begin?

Hi all - I'm back after a long break. And no, I wasn't hiding because of the Red Sox dismal September choke job, although I should be...

I know these disclosures are everyone's favorite subject. Just one question - wanted to see what folks think.

What I get out of the regs is that for the 408(b)(2) service provider disclosures, "one-participant" plans ARE subject to these rules. But for the participant fee disclosure regs under 2550-404a, the "one participant" plans are NOT subject to the rules.

Agree/disagree?

Trying to determine if an HCE is eligible for a distribution as of 11/1/2011. We have the FT. TNC and FT of the individual participant as of the most recent valuation date, 1/1/2011. Is the correct methodology to take the 1/1 numbers and increase them for 10 months at the plans effective interest rate to come up with an estimated 11/1/2011 liability? And is the total liability you compare to the assets the FT + TNC, or just the FT?

Once I increase the plan's FT, TNC, and participant's FT with the EIR, then:

Contribution Required to Pass Test = 110%(FT + TNC - Participant's FT) - Assets + (PVAB of Participant)

A client with a Profit-Sharing Plan has consistently kept a portion of the trust invested in real estate (usually raw land) and has done well buying and selling over the years. A few years back, the Plan purchased a 60% interest in a property as a Plan asset, and an individual (also a participant) purchased 40% personally, not as a plan asset. The land is roughly 1/3 of plan assets. The Trust is commingled.

The client is now at retirement age (though not ready to retire). His account is 95%+ of Plan assets. The plan allows in-service distributions. The Adoption Agreement doesn't now, but can provide for in-service distributions.

Is there any prohibition from him taking an in-kind distribution and making direct transfer to a self-directed IRA? Assume an independent third party appraisal or three are obtained.

The IRS sample 402(f) notice for accounts that are not designated Roth accounts says:

If you have an outstanding loan from the Plan, your Plan benefit may be offset by the

amount of the loan, typically when your employment ends. The loan offset amount is

treated as a distribution to you at the time of the offset and will be taxed (including the

10% additional income tax on early distributions, unless an exception applies) unless

you do a 60-day rollover in the amount of the loan offset to an IRA or employer plan.

Does the reference to an "IRA" include both a traditional IRA and a Roth IRA?

Here's the setup...

Company A = Owner #1 50% and Owner #2 50%

Company B = same Owner #1 20% ; same Owner #2 20%, Owner #3 20%, Owner #4 20% and Owner #5 20%

All of these owners receive payroll under only Company A and the owners plan balances are all under Company A.

Do you concur that for top heavy determination purposes on Company A I use only the balances for Owner #1 and Owner #2?

457(f) plan allows for a contribution to an employee's account equal to a certain dollar amount less the maximum amount that may be contributed to the 457(b) plan that is also in place. It appears as though the organization inadvertently credited the employee with the dollar amount and failed to reduce it by the 457(b) amount that was also contributed. Is this excess contribution a problem since the amount exceeds the amount outlined in the plan document. What is the proper correction procedure for a 457(f) plan? Also, due to short term deferral exception, plan is not subject to 409A.

Someone just told me there 403b plan limits their contributions to 20% of pay. Corbel's 403b does mention that the "salary reduction agreement may reference minimum and maximum deferral limits."

I was surprised by this because of universal aviailibility. Is it OK to limit contributions? Someone making $20,000 will be limited to $4,000 of deferrals. Does that cause a problem?

Suppose a calendar year 401(k) plan excludes non-shareholder HCEs from all contribution types. The employer does not apply the top-paid group election.

Suppose an employee is hired in June of 2010 (not a shareholder) and they do not earn enough wages in 2010 to be an HCE in 2011. Suppose they enter the 401(k) plan on July 1, 2011 (after one year of service). Allocations are made to their account for 2011.

Suppose they are paid enough in 2011 to be considered as an HCE in 2012. Starting January 1, 2012, they are excluded by the terms of the plan. The plan is top heavy.

Are the required to receive a top heavy minimum allocation in 2012?

on edit, added: Please assume this plan is not a safe harbor top heavy exempt plan.

Recent retiree (2010), has no earned income for 2011, but is exercising NQSOs, the bargain element of which is subject to employment tax. Is this eligible to be treated as earned income for purposes of IRA contributions for 2011?

BruceM

I have an employee who is expecting a child on December 30 of this year. They want to elect the FSA plan to get reimbursed for hospital charges the will occur in 2011. Per the plan, the employee cannot elect until the date of the event at which point there will be no payroll run for us to deduct the election. I understand the the employee can elect the FSA, but can I take payroll deductions in 2012 for 2011 expences due to the circumstances? If someone can point me to regulations around this or give me insight, I would appreciate it.

Thank you.

Am I missing anything here.

1 person 401(k) Plan

Owner is taking only 12500 in compensation (Assume net of FICA)

He is deferring 12,500.

Can he contribute 25 % of pay (12,500) or 3125?

If he does he exceed the 415 limit as 100% of pay is 12,500.

But then can he reclassify 100% of the PS contribution as Catch up and then end up with over 100% of pay as EE plus PS?

Not used to working with such small pay amounts.

Thanks

Pat

I submitted a determination letter application for a cash balance plan. The document had a 414(k) provision in it that basically says that if the plan ever permits employee contributions then the contributions will be treated as annual additions to a DC plan pursuant to Code Section 414(k). The IRS agent responds to the submission and claims that 414(k) accounts are not permitted in a DB plan and that I need to submit a new DL application if I want a ruling on that 414(k) provision.

Since when are 414(k) accounts not permitted in a DB plan? Isn't that the sole purpose of Code Section 414(k)? Also, why would I need to submit a new application for a 414(k) ruling when that does not appear to be something you need to specifically request a ruling on when you submit a 5300?

Am I missing something?

An owner, who has been receiving RMDs, had a QDRO distribution made from his account on 1/3/11. The paperwork to get the QDRO distributed had been submitted to the investment company before 12/31/10. We calculated his 2011 RMD on his balance as of 12/31/10, however 3 days later his balance dropped by half and now his RMD amount is a significant portion of his entire balance.

Is there any exception, in this case, to using the 12/31/10 balance to calculate the 2011 RMD? Could we subtract the QDRO distribution since the process had started before year end?

Thanks.

Calendar year plan year; files 5500 on accrual basis. Sponsor adopts an 11(g) corrective amendment in 2011 effective for 2010. Corrective amendment calls for an additional employer contribution for 2010, which was made. But for corrective amendment, no such contribution would be due, but plan would be at risk for disqualification. Should this be reported as a receivable on Schedule H as of 12/31/10 and/or as a matter of GAAP?

A taxpayer will be inheriting a portion of an IRA (there are multiple family members named as beneificiaries) from a deceased parent. The taxpayer would like to disclaim the IRA so that it would go to the taxpayers's children and be used in the future for educational purposes.

Not being that familiar with the disclaimer process, is this feasible? In reading about the disclaiming of an IRA, it appears that upon disclaiming, the IRA passes to the contingent beneficiary of the IRA. If the taxpayer's children were not contingent beneficiaries of the IRA, I don't think this could be done. In addition, it also appears that the contingent beneficary would also be required to take MRD's from the inherited IRA based on their life expectancy.

Am I in the ballpark on this? Any thoughts would be appreciated, thanks.

Can a plan be designed to exclude compensation earned for service in an eligible job classification for accrual purposes? For example, employee earns $60,000 for entire plan year, but $20,000 was earned as a union employee or, say, a worker of unit x (which may or may not have its own plan, and assuming their exclusion satisfies the nondiscrimination requirements). Can the employer contribution be allocated based on the $40,000, or must it include all $60,000?

I can't think of any policy reason for excluding this, provided the nondiscrimination tests would be satisfied, perhaps based on the full $60k.

Has anyone ever considered this question?

As far as the requirement for participant statements goes for Cash Balance Plans, would the hypothetical account balance and vested hypothetical account balance be sufficient? Or are people using the Monthly Accrued Benefit and Vested Accrued Benefit?

Easiest solution is to use both, I suppose, but these things are cluttered enough as is.

Thanks.

Can an individual provide the following services to a Non-ERISA 403(b) plan, and remain in compliance?

• Provide guidance regarding the plan so as to ensure it maintains its non-ERISA status and comply with applicable ERISA laws and the tax code. In general, serve as the Administrator for the 403(b) plan
  
• Serve as an investment advisor to plan participants under a no-fee arrangement, but be paid commission for trades
  

Thanks

When are shares for RSUs deducted from the total number of available shares, at the time the RSUs are granted, or when the RSU vests? Any guidance (particularly ISS specific) on this is appreciated. Thanks much!