Doubt there are answers but let's try. Calendar year plan.

I've come across my first mandatory burn of FSCOB to bring AFTAP to 80%.

Question 1: Does mandatory burn eliminate need to certify? If you don't certify, then is AFTAP deemed to be <60% ?

Question 2: Suppose plan was not certified in 2010 and presumption of underfunding applies. Is it still necessary to burn FSCOB?

My guess is (1) if you don't certify, than AFTAP is deemed to be less than <60% even though FSCOB was burned to bring AFTAP to 80%.

My guess is (2), Yes, it is necessary to burn FSCOB.

Comments ???

Facts: As allowed under Reg. 1.401(a)-14(a), the DB plan at issue requires a participant to file a claim for benefits before payment of benefits will commence. NRA under the plan is 62. Plan is frozen and provides suspension of benefits notices to avoid an actuarial increase during the time of suspension. Assume that the plan document does not address these questions (even if it should), so I am looking for what the Code and/or ERISA may require in these circumstances.

Questions:

1. If participant is actively employed past normal retirement age (62)(assume suspension notice properly given), the participant terminates employment at age 63 and does not file a claim for benefits until age 66:

(a) Once the payments commence, is the participant entitled to an actuarial increase from date of termination until age 66?

(b) Or, is the participant entitled to back payments for the period of time from date of termination until age 66?

© If back payments are made, can they only be made if the plan allows "retroactive annuity starting dates" ("RASDs") and, accordingly, must be made in accordance with the RASD rules?

(d) Can the employer choose between an actuarial increase and back payments (assuming the plan allows RASDs, if required)?

2. Same questions as above, but with respect to a vested participant who terminates employment at age 60 and does not file a claim for benefits unitl age 66?

3. What is the annuity starting date for the foregoing participants in (1) and (2) for purposes of providing QJSA notices? Is it the date the participant finally elects to commence payment?

I would truly appreciate any comments on any of the foregoing questions.

I understand the time frame allowed for employee elective deferrals of unused leave (sich & vacation) pay of the 2 1/2 months or end to tax year. However, is there any set time for employer contributions? Could an employer make contributions a year after an employee separates, or more, due to cash flow issues?

The DOL has a "wet ink" signature requirement for the report. Is the signature required in an invidual's name or can the name of the firm just be signed? This is from the DOL's website:

Attachments

Q24: How do I attach the report of the independent qualified public accountant (IQPA report)?

The IQPA report needs to be documented on letterhead, signed, and then saved as a single Portable Document Format (PDF) file. That PDF file then needs to be attached to the Form 5500 annual return/report. When you submit the Form 5500 annual return/report, the attachments will be transmitted to EFAST2 along with the rest of the information in the annual return/report.

It doesn't seem clear how that signature should be done, so it seems that the name of the firm, would be sufficient?

Thanks.

An employer makes a contribution to its PSP of $40K and the Plan lends the Employer $40k the same day. Is this covered under the VCP Class Exemption? Is a filing required? The $40K represents less than 10% of plan assets. Only owners (100% owner and adult children through attribution) are participants.

I just received a question from the client, who is on our Volume Submitter Plan document, regarding the FICA max ($106,800) and the IRS Annual Compensation Limit ($245,000). They are currently an integrated plan. They want to know if it is possible to freeze those limits at what they are now, or do they have to let those limits continue to rise as the government raises their rates?

Is there a way to amend their current VS document to include this change, if it is possible?

Or would they need to create a custom plan document to accomodate a limit freeze? I

f it is possible, are their testing implications?

A not for profit employer established a 403 b plan with group annuity contracts for participants. Subsequently, the assets of the employer were purchased by another entity and the employer was liquidated. The new employer (a for profit company) is attempting to terminate the plan.

There are two groups of contracts, those established before 2009 and those established in 2008 and 2009 intended to recognize the change in rules. The insurance company will not allow the pre 2009 participants to be forced out of the plan. We would like to use the FAB relief to exclude those contracts from the plan, but due to a clerical error, one participant's 2009 and 2010 contributions were deposited to the pre-2009 contract rather than the new contract. This participant has since taken a full distribution, so there is no way to correct the error. The CPA auditing the plan says we are now required to include all of the participants covered by that contract, and show their balances as remaining in the plan.

Does anyone have any suggestions about how to resolve this issue? It seems unbelieveable that an employer that no longer exists can have ongoing responsibilities to prepare Form 5500 for an unlimited number of years into the future.

Participant hired contractor to remodel bathroom. Before the job was completed, the contractor left the country. The participant has been left with an unusable bathroom (non working sink/toilet, holes in floor and ceiling, etc.). Expected cost to finish the job is $3k.

Question: does this qualify under Section 165? The damage was not "sudden" but could be considered unintentional. My guess is that if the repair was not "needed" and was primarily for cosmetic reason as most remodels are, it would not qualify.

I am learning my way though the Form 5500 (trial by fire), so I apologize for what seems to be a simple question that maybe I am overthinking. I am working on a health plan that is self-funded. They allow an outside vendor to come in and offer voluntary supplementary insurance products to their employees, such as cancer, life, etc. The Plan allows payoll deductions for the premiums and remits the premiums when deducted to the vendor. The Plan does not file claims or pay any of the premium or any type of fees. The contract is between the individual employee and the vendor. This vendor has not been reported on previous filings. I assume there are some commissions somewhere, but they are not funded by the Plan.

Is this something that should be included on Schedule A? If it should be reported, how far back should I amend?

Thanks for any help.

Need to do an Annual Funding Notice for a large terminated plan that is beyond the year that it was last subject to minimum funding. Is there any guidance on what an appropriate format might be?

Facts: Termination effective 6/30/2010. Doing AFN for PYE 6/30/2011.

In the page one three year grid, is it appropriate to simply put "N/A" for all liability related items in the column for plan year beginning 7/1/2010?

And then "Plan's liabilities", under the "Fair Market Value of Assets" would be "N/A"?

Is there any informal (or formal) guidance in this situation? What have others done? This is a large plan, so it is important that this be "correct". Thanks for any help.

Lines 6a and 6b are used to report those entitled to a deferred vested benefit. In Part III of the form, these folks are the ones with a Code A.

In 6a and/or 6b, do we also add in anyone from Section III that has a Code D?

If I have 50 total new people to report with a Code A, but also have 50 people previously reported and no longer entitled to a deferred vested benefit, Code D, will 6a and 6b equal 50 or 100?

In the old 5500, line 7i, I used to include the sum of people being reported, Code A and Code D.

I have a little problem with what was to be a series of key-man policies. The group is an LLC with four partners. There are four term policies, one for each partner. Partners went to a tax lawyer and rewrote the operating agreement so a partner automatically loses his interest at death.

Currently set up with the Partners as the owners and the proceeds to be split 50/50 between the company and the deceased's estate with a collateral assignment to protect the company. My confusion is the dual purpose of the life insurance. Any ideas on the most efficient structure with the current policies and can someone suggest the proper taxation to the company and the partners for the intended purpose of the life insurance?

We restated our clients' Sungard volume submitter plan documents in April 2010 (EGTRRA restatement) and submitted each of them to the IRS for a letter of determination. I received an email from Sungard about a PPA restatement by January 31, 2012. I'm confused about whether or not this applies to our plans. Surely we would not need to submit for another LOD this soon.

Is Tri Care considered group health care coverage for purposes of enrolling in an employer's section 125 plan?

As long as the company exists? A small doctors group wants to keep its plan frozen for at least 5 years in order to maintain its insurance policies in the plan.

The plan sponsor met the minimum funding requirement prior to 9/15, but then put in an additional 50k in the plan today towards 2010. I know this 50k can't be put on the 2010 SB, but can it be included on the SF. I think it can. Also, does the 50k (reduced with interest) increase the prefunding balance as of 1/1/2011? again, I think it does and i would show it on the 2011 SB Part II 7(b) with additional explanation attachment. Anything wrong here?

Andrew

I have a plan that had late deposits in 2009 and 2010. They are late by a week or two for some of their deposits.

On the 2010 5500 sch H part IV 4a, question about failure to transmit. Do I have to put the total for both years.

The interest was applied in 2010 for the 2009 late deposits and the 2011 for the 2010 late deposits.

Or do I just included the 2009 contributions that were not deposited until 2010?

Have a group of participants in a 401k that were brought into the plan 4/1 instead of 1/1. None of them contributed when enrolled at 4/1. What is my correction for the missed quarter. A qnec based on the quarters ADP for NHCEs? It's a calendar year plan. I believe that since I'm within the plan year and none elected to contribute there may not be a qnec. Any help appreciated.

Participant received a plan loan and provided the Plan Sponsor with the required documents including spousal consent which was notarized. Now appears that the consent and notarized was a fraud. Participant's spouse is now asking questions.

What should be done to protect the Plan Sponsor and what should they do regarding the made up paperwork?

Many thanks.

A participant wants to rollover her traditional IRA to her employer's 401(k) plan.

The participant has made both deductible and nodneductible contributions to the traditional IRA.

The participant wishes to rollover ONLY the portion of the traditional IRA attributable to her deductible contributions, leaving the amount attributable to her nondeductible contributions (and their basis) behind in the traditional IRA.

Can she do this? Or does any amount distributed from the IRA, even if it is a rollover to a 401(k) plan, have to prorate the distribution between the deductible and nondeductible contributions? What if the 401(k) plan didn't accept rollover contributions of after-tax amounts?