I have a client with a last day 1000 hour requirment.

He wants to prefund his PS - say $50,000

At year end we would allocate the $50,000

What about the earnings or loss on the $50,000

Who would that go to ?

Thanks

Pat

:angry: :angry:

Anyone else using Web Client this year? I am running into so many issues - timeouts, notifications not sending out, publishing/republishing delays...and the list goes on.

Came across the following situation:

A self-insured health plan provides $7000 in employer contributions towards the "premium" for NHCEs, and $10,000 (100%) for HCEs (officers). The NHCEs can elect to make a $3000 pre-tax contribution for the rest under a cafeteria plan.

In reading the 105 nondiscirmination rules, it says that pre-tax contributions under a 125 plan are treated as employer contributions..thus, for testing purposes it looks like the employer is providing $10,000 to all participants.

If this correct? On its face it looks like this plan is discriminatory.

Also, if the Cafeteria plan was found to be discriminatory, the HCEs pre-tax contributions would become after-tax. However, there are none in this situation, so there seems to be no penalty.

Has anyone ever looked at this type of situation before? Am I reading one of the rules incorrectly?

I have a plan with AFTAP < 60%. Benefits and lump sums fully frozen.

The plan has a disability provision that calls for 100% of the accrued benefit payable as of the date of disability. The plan uses Social Security as the ruling factor. As you may know Social Security often takes more than a year to rule on disabilities.

A participant just received a SS disability award retroactive to October 2010. Normally, the plan would retro disability payments back to October 2010. However, due to the AFTAP, is that permitted?

Seems to me that I can probably only retro back to 1/1/11 without violating the benefit restrictions. Agree?

If you agree, I guess the plan would just have a "payable" for the other 3 payments until the AFTAP is > 60%?

Comments?

I'm taking over a governmental 401(k) plan where the former TPA was a bank who also served as trustee. Now they need a new trustee, and they want the document to read that the "Board of Commissioners" is the trustee. Is that specific enough? Especially as it would related to information on the SPD an an SS-4 application (well, I know it's not specific enough for that!). Thx.

Participant misinterpreted the dependent care cap and pledged $5,000 instead of $2,500. What are the options for the participant - can she stop future payments without a qualifying event and recover the excess that is not eligible?

Client has a Simple 401(k) Plan and they have been making contributions into it this year. They would like to establish a DB plan this year. Is that possible? If so, what is the best mechanism?

Thanks in advance

I know this is a 5500 question and I asked it on that board, but need an answer quickly and haven't gotten it there.

Assuming all the other requirements are met, when determining whether or not a plan has to file a Form 5500EZ due to having assets under $250,000, is that number based on the actual assets at 12/31/2010 or does it include accrued contributions for the year.

Example, plan has $225,000 in assets at 12/31/2010 and contributes $30,000 during 2011 for the 2010 plan year. EOY cash basis assets = $225,000, EOY accrual basis assets = $255,000. Is this plan required to file?

Somoeone called and proposed this:

Have a SIMPLE IRA for two years. Because in a SIMPLE the match can be as low as 1% for two out of 5 years, they do 1% for two years, to take advantage of the "cheap" contributions (i.e. it's only a quarter of the SH Match, but ~75% of the contribution limit). After the two years, discontinue and do a SH 401k.

Is there a problem with this?

What do you do where you do not have enough information to file a Form 5500 by the filing deadline? Wait and submit under DFVCP, or file incomplete with a statement?

Assuming all the other requirements are met, when determining whether or not a plan has to file a Form 5500EZ due to having assets under $250,000, is that number based on the actual assets at 12/31/2010 or does it include accrued contributions for the year.

Example, plan has $225,000 in assets at 12/31/2010 and contributes $30,000 during 2011 for the 2010 plan year. EOY cash basis assets = $225,000, EOY accrual basis assets = $255,000. Is this plan required to file?

Is there anything an employer can do who simply cannot meet their funding deficiencies? They have two year's deficiencies and they want to explore the possibility of contacting the IRS to ask for clemency regarding the 10% excise taxes? They feel that the plan would be better served if these excise taxes were deposited into the plan to meet minimum funding. They want to know if there is any such program the IRS may have for plans in such a situation. Given the economy, they can't be the first small business who can't meet minimum funding.

Benefits have been frozen. They do not have enough assets in the plan to cover all benefits, even with the owner waiving his benefit if the plan were terminated. They do not want to go through distress termination and do not have the funds to even pay an ERISA attorney to help them through this. They have not applied for a funding waiver since that is so costly.

Anybody have any solutions, or an IRS contact?

curious what others do when submitting the lost earnings for participants on any of the 401(k) investment vendors such as JHancock, American Funds, Nationwide, etc. with regard to how the

deposit is coded. I don't believe it should be made as a "contribution" as that would impact the current year's tests.

I think it could be coded as a "transfer in" on most vendors; just trying to get my arms around the mechanics of the actual payment to the Plan participants.

thanks in advance.

I am reviewing a Money Purchase Plan 5500.

It would seem you would answer Q3, correct?

Can Q4 even apply to a MPP? The instructions would seem to say there should be an answer to Q4 for a MPP.

Thanks.

For 2010, many of the plan's deferral contribuitons were late, I reported amounts on 10a on short form. The contributions have all been funded as well as the late earnings and 5330 filed. Do I need to attach anything (schedule of delinquent payments) with the SF form that shows payments made and when? I don't think I do I just have to have everything in order if/when DOL letter comes. Thanks,

If an employer has 2 safe harbor 401k plans can the annual (safe harbor) notices be combined into one notice for both plans? The safe harbor provisions of both are the same and other provisions are similar- just different employees who are eligible for participation. All employees could potentially be eligible for either in the same plan year, or both, at different times (again within the same plan year- which is also the same for both plans.)

more poorly behaving 1 participant plan sponsors.

say plan has 300k in assets.

owner/participant is age 69 and has worked past NRA

pvab = close to 300k

in 2010 owner withdraws 130k (in about 4 payments during 2010) and prepared a 1099R.

no benefit election forms, etc. prepared

plan allows for QJSA to commence at NRA if working or lump sum option

not married and normal form is life annuity.

owner now terminating the plan and will distribute balance.

as far as i see it the 130k withdrawal is a plan operation failure and could disqualify the plan

resulting in potentially loss of corporate deductions and entire pension taxable, etc.

is that a correct interpretation?

If a defined benefit plan year ends 1/15/11, what is the extended due date for the form 5500?

If the plan year ends 1/14/2011, what is the due date for the 5500? What is the extended due date?

A DB plan amendment will be adopted during 2011 to change a July 1 - June 30 plan year to the calendar year effective 1/1/2012 so that there will be a short plan year from July 1, 2011 - December 31, 2011. The benefit formula is 1% of FAS x YOS, where FAS is determined on a July 1 - June 30 basis. As of 12/31/2011, the accrued benefits for all actives will be calculated. Effective 1/1/2012, a participant will accrue benefits under the same formula but using FAS determined using historical calendar year compensation. If greater, the 12/31/2011 grandfather applies.

As of 1/1/2012, the AFTAP is calculated to be 80% before applying the amendment (i.e., just with the grandfather). After applying the Amendment, the AFTAP is 78%. Can this amendment take place without the Plan Sponsor making additional contributions to increase the AFTAP to 80% after the amendment ??? If not and the employer does make a contribution, does this mean the plan year has not changed or that the plan year has changed, but the part of the amendment that changes the computation compensation period does not take effect?

My opinion is the Plan Amendment consists of two separable provisions -- the change in plan year and the change in compensation compensation period. There should be no problem changing the plan year. However, it seems that the change in compensation period, while it does not alter the benefit calculation formula per se, does in operation increase benefits and so would be precluded from going into effect.

Comments ?