Folks,

Incredibly useful site. Would appreciate any input one can provide on my situation.

I am in a very fortunate situation of having two employment contracts with distinct employers and sizable self-employment income as well. I am prone to save as much as possible in retirement plans, mainly to achieve as much tax deferred investment as possible. Thus far, I have the following plans established:

1) Employer 1 (<100K income): 403B. I contribute the maximum (was 16,500, now 17,000) and my employer contributes ~20K (capped at this for my age group).

2) Employer 2: 401K, to start this upcoming July, 2012 after 1 year of service. I can contribute $17,000 to this with a full match to 49 or 50K (whatever the maximum is). I assume I will have to cease contributing to my 403B with my other employer so as not to exceed maximum employee contributions across plans.

3) Employer 2 also offers a 457B, to which I have not started contributing, but would like to. I assume I can make these contributions exclusive of the 403(b)/401K contributions (I will not be contributing to both the 403 and 401K starting July 1)? Is this assumption correct?

4) Self-employment: I have established a defined benefit plan for myself with target income of ~130K at age 62 and contributed ~100K for 2011. Actuarial assumptions not available for 2012.

5) I also contribute each year to a non-deductible traditional IRA for me and my homemaker wife, which I assume I can make.

Are my assumptions correct for the above scenario and am I taking maximum advantage of retirement plan contributions? Am I overlooking anything or in violation of any IRS rules? Any advice you sages can provided would be most appreciated.

Many thanks in advance!

SR

been awhile since I posted this report.

this version of the census report should provide a variety of 'warnings'

1. years from term date to report year end. (added this due to the number of takeovers we've done and forget to enter break in svc years. this should only print if ee has been gone at least 4 years to find people who should possibly forfeit)

2. ee has prior year term date but current comp /hours. must be a rehire that was imported

3. message if ee is age 69 or older (for possible min distribution)

4. Date of birth warning (rare, but I've seen bad centuries from time to time from an import)

5. NRD check - just in case someone's birthdate has changed for whatever reason. e.g. if it was 1970 and it was corrected to 1980, the system won't change the retirement date unless specifically told to recalc during eligibiility)

6. comp is 0 but the person is still active. guess they didn't tell you the person quit in the prior year.

7. inactive or ineligible, but no reason is given

8. inactive but no status date.

Does anyone know where I can find information on what needs to be done if the single Trustee of a 401(k) Plan dies suddenly?

We have a client in an Affiliated Service Group (A-org). The A-org sponsors a SEP IRA that covers the 2 employees of the A-org and the FSO sponsors a traditional 401K (ADP test) that covers the 50 employees of the FSO. Thanks to Derrin Watson's Who's the Employer, I believe I understand correctly that members of an Affiliated Service Group can sponsor different plans with different levels of benefits as long as they can pass covergae testing separately (but must include employees of all ASG members in testing). But how would this work when there is a SEP and 401K? Does a SEP even test coverage or is it just required that any employee of all employers in ASG that meet the SEP's eligibility requirements receive a SEP contribution? Can you aggregate a SEP and 401K for coverage or nondiscrimination testing? If so, how would that work?

I don't work with SEP's or Affiliated Service Group very often so I appreciate any guidance you can give.

We have a 1/15/2012 quarterly contribution due

Someone in my office mentioned a 30 day grace period for each quarterly where you don't have to worry about giving participants notice of msisign the date?

Happy New Year!!!

Does anyone know of any software that can be used to manage a private equity plan? We are a small company, with only about 28 participants at this point, but poised to expand and looking to be ready. Seems silly that my Chief HR Officer is sending out manually prepared statements for our program.

Any assistance appreciated!

Thanks...Sheila K

12/31 plan is very top-heavy. Can I change Plan Year-End to 3/1/12 - 2/28/13 (short plan year from 1/1/12 to 2/28/12), or is that just plain crazy?

A spousal bene missed taking a rmd in 2008 and 2010. This was due to admin error by recordkeeper

All RMD's were made in 2011. Did earnings have to be calculated on the missed RMD's?

In what year are the missed RMD's taxed ? In 2080 and 2010, when they should have been made? or when they were received?

A Participant has been receiving $600 per month under a 100% Joint and Survivor Annuity. Five years later the Participant's account is audited and it is found he was overpaid by $100 per month ($700 rather than $600) for 60 months or $6,000. The Participant then dies. What is the survivor's benefit, $600 or a survivor benefit of $600 reduced for the overpayments?

Hi everyone! I am scheduled to take the ERPA test part 1 on the 25th of January and was wondering if anyone who has already taken it has any tips or any extra study material to share? I did a review course through Sungard which gave a sample test of 160 questions and a powerpoint of the main topics to be tested. The test / info was written by Sungard attorneys, not the actual ERPA test writers. I know you can buy sample tests from aire.org but wondered if anyone didn't get there study materials from aire.org and studied on their own and how you did?? Any sugesstions would be appreciated! Thanks!

Is form 8955-SSA required where vested benefits in a 403b plan are held in a individual or group annuity? P 3 of 8955 instructions provides that reporting is not required if benefits are paid before filing date but there is no definition of "paid". If cash is distributed the benefits are paid. Why should there be a distinction in reporting if the vested benefits are held by a third party outside the control of the plan administrator since the plan does not have beneficial ownership of the vested benefits in either case?

If reporting is required on 8955 then at retirement participant will believe that supplemental benefits are payable from the plan in addition to the benefits held by insurance co.

Is the code 'd' on the 8955-SSA 'optional'? I have seen some information online regarding this but the Instructions for the form do not indicate so. Thanks.

For Lump Sum distributions to residents of Michigan is the MI W4-P required, and is state withholding required based on how the MI W4-P is completed? Is the mandatory withholding only for monthly Pension and Annuity payments?

This seems like a really dumb question, but here goes. Let's say you have a fairly "typical" TPA, and a client has a 401(k) plan on a recordkeeping platform with, (pick anyone - let's say Hancock.) Plan administration fees are billed to the EMPLOYER,not to the plan. Any revenue sharing payments to the TPA are used to directly offset fees otherwise paid by the employer. These fees can also be paid out of plan assets, as provided for in the plan document language, but are usually paid by the employer.

Her's the question on the fee disclosure. Let's say that due to this arrangement, the TPA determines it is a "category 2" CSP, as this recordkeeping platform is offered "in connection with" the service contract. When it comes to the actual detailed disclosure with regard to each "designated investment alternative/investment vehicle" - what actually has to be disclosed by the TPA? Seems like two choices, depending upon how you interpret the regs:

1. TPA would disclose only the revenue sharing, and would not be responsible for all of the other stuff typically found in a prospectus - loads, transactional fees, sales fees, redemption fees, whatever.

2. TPA would be required to disclose all of this "prospectus" garbage, even though the TPA cannot possibly receive any of these amounts.

Option 1 certainly seems more logical. But, if option 2 is required, then it could be covered by providing the same information required for option 1, plus providing a prospectus.

Personally, I'd vote for #1. It seems like the other charges as outlined in the prospectus should be disclosed by the investment provider (Hancock, in this case.)

My wife and I got married 6 months ago and missed the 30 day window to have her dropped form her coverage and added to mine. I want to consolidate her onto the plan I get through work. I just added her to my insurance during the open enrollment period (effective January 1). Can she cancel her coverage because she now has coverage through me, or does she have to wait until her open enrollment period (June) to do so?

What would be the due date for the Form 8955-SSA for a June 30 year end plan? There will be participants reportable for 2009 and 2010. Is the due date for 2009 January 17, 2012 or is it the due date of the 2010 return? I see conflicting information out there.

Thanks for any input.

Employer has 5 ee's who were supposed to be excluded. Plan passes all of the testing. Unfortunately 3 of the excluded employees, were included. What do you do? Do the 3 employees who were included forfeit their benefit? Or do the 2 employees who were excluded now get included?

Thanks.

Please provide regs if you can.

I hope you have the best new year ever!

And thanks for all your posts in 2011.

We administer a calendar year cross-tested 401(k) plan with a prevailing wage component. Everyone is in their own allocation group. To receive an allocation of the PS contribution there is a last day & 1,000 hour requirement. The plan is not safe harbor.

For 2011 the client wants to allocate a 1% profit sharing contribution to everyone (HCE's and NHCE's). The plan document says to offset PS contributions by prevailing wage contributions.

There is one HCE that received a 10% prevailing wage contribution, and the other 8 HCE's did not receive any prevailing wage contributions.

Do I have to cross-test this plan if we allocate the 1% PS contribution (& therefore include the prevailing wage contributions in the test, which would trigger the gateway test) or is there a way we can test the PS separately (since the 1% PS is a uniform allocation) from the prevailing wage?

Thanks in advance for any help.

I have been circling this topic forever and I can't seem to pin down an answer.

Say a small business owner sets up a SIMPLE with the the 3% matching contribution. He has 6 employees, none of whom want to participate in the SIMPLE. The employer says fine, sets up an account only for himself, and contributes the maximum with match. Is this permissible or not? The way I read the IRC and the DOL Notice 98-4, as well as the IRS FAQs below, an employer must enroll the employees so that they have a plan, but if they contribute zero, great, their accounts will reflect that. The employer has a son who passed the bar this year, has been licensed for 8 months, and is saying there's no need to set up any accounts for the employees if they don't want to participate.

Who is correct? If anyone could send me any evidence or authority to their answer, I would be eternally grateful. This simple issue is driving me nuts! Thank you!!

FAQs

Which employees of an employer must be eligible to participate under a SIMPLE IRA plan?

If an employer establishes a SIMPLE IRA plan, all employees of the employer who received at least $5,000 in compensation from the employer during any 2 preceding calendar years (whether or not consecutive) and who are reasonably expected to receive at least $5,000 in compensation during the calendar year, must be eligible to participate in the SIMPLE IRA plan for the calendar year. If an employee meets the conditions described in this paragraph (or such lesser conditions imposed by an employer) and is not excluded, then the employee must be covered by the SIMPLE IRA plan.

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May a participant "opt out" of a SIMPLE IRA plan?

An employee may not "opt out" of participation. Of course, any eligible employee may choose not to make salary reduction contributions for a year, in which case such employee would accrue no employer matching contributions for the year, but would receive an employer nonelective contribution for the year if the plan provides for such contributions for the year.