Are PTIN's required to file the 2010 Form 5330? I don't see it on the IRS' list as an exception to the new PTIN rule.

What are TPA firms doing if a PTIN is required on the Form 5330 and nobody in the firm has a PTIN? Are you advising clients to have their CPA's complete and file the 5330?

I'm working on allocating a QNEC instead of using the one-to-one method for late excess contribution refunds. The plan uses prior year testing I understand that under EPCRS you have to use the appropriate participant data (so for 2005 failures I need to allocate the QNEC for 2004).

I've ran into a problem - this plan failed in 2005 but this was their first year of testing so they used the "new plan rule" and had a max HCE average of 5%. How do you allocate a QNEC in 2004 for that? Or maybe I need to use one-to-one in this situation since that's the only way I can determine the amount of the QNEC?

Please help! (Tom, I know you and your massive brain are out there somewhere!)

Thanks for any help you can provide!

Vicki

Plan year is 8/1 - 7/31. Paying a lump sum on 7/31/2011 during the plan year beginning 8/1/10 - 7/31/11. Under 417e, do we use the 2010 applicable mortality table or the 2011 applicable mortality table?

Are a participant's Roth 401(k) contributions available for in-service withdrawal (if the plan so provides) after being held in the plan for two years? Or are they subject to the same in-service withdrawal restrictions as non-Roth (traditional) 401(k) contributions (hardship and age 59 1/2)? Can anyone direct me to guidance on this issue?

I am looking for any thoughts or regulatory guidance (please cite such if it exists) to deal with the following scenario...a participant with a qualified defined benefit pension plan was a lost participant for a lengthy period of time (25+ years or more). The participant had not been employed with the company for many years prior to what should have been the date his plan benefit should have been commenced (it should have been commenced on his normal retirement date of 2-1-94) based on the plan provisions. He was recently found July 2011...at the age of 82)...long after the date that his benefit should have been commenced (normal retirement date)and long after required minimum distributions should have commenced. He is not a 5% owner...thus required minimum distributions should have commenced by April 1 following the end of the calendar year in which he achieved age 70 and 1/2....based on current applicable law and associated regulatory guidance.

The benefit is not insignificant..being slightly over $1,000 per month (single life annuity at normal retirement date...he is not married)...and he is due that amount per month back to 2-1-94 and continuing until his death.

If participants or beneficiaries do not receive their minimum distribution on time, they (not the plan) are subject to a 50% additional tax on the underpayment. To pay the additional tax, the participant or beneficiary must attach Form 5329 to their federal income tax return for the calendar year in which the minimum distribution was due. The IRS may waive the additional tax for reasonable cause, if reasonable steps are being taken to make up the distribution. I understand, however, if there is reasonable error, the individual may file for a waiver following the procedure described in the Form 5329 instructions.

Is there any specific guidance (maybe some "special dispenation") allowed in a case of a lost participant such as this that avoids the necessity of the participant having to file for a waiver per the procedure described in the Form 5329 Instructions? Any other thoughts/guidance? Do the retroactive annuity starting date regulations/guidance have application in some form here? How about thoughts on required withholding (federal) of what will be a rather large payment to "catch him up"? We're still figuring out what the state withholding (if any would be).

Thanks for any help. Odd case. Bit of a brainteaser...at least for me.

What are common reportable transactions for this line?

A DB plan participant did not cash the first check for his benefit distribution. When re-issuing the check, can the employer pay the original amount or does it have a duty to pay interest to cover any lost earnings?

Does it matter if the payment was a lump sum distribution or part of an annuity?

We are reviewing prior returns for a potential client, and discovered that all previous forms have been filed using calendar year dates when the document specifically states that the plan is to coincide with the company's fiscal year (8/31).

What is the correction in this instance? It appears that the actual data used in completing the form was correct (9/1 to 8/31), just the dates on the form were wrong. Would all prior filings need to be amended? Just the last 3?

Two Owners, One employee - Employee is Highly Compensated - does he have to be included in the plan or can we carve him out since he is Highly Compensated?

Thanks

I know a coprporate extension can be used to extend a Form 5500 filing, but it would only extend until 9/15 for a calendar year plan.

Can a sole proprietor extension be used in place for a 5558 is the sole prop is extended - again for a 12/31 PYE?

A small plan sponsor wants to sell a $40K note in a pension plan to its psp in order to have enough cash in the pension plan to pay a non-common law participant. I think this would be a prohibited transaction as the plan would be considered a party in interest. Ultimately both plans will be terminated. The pension plan is not liquid. Do you think approaching the IRS for approval would be an option?

The ER discovered that EE and ER matching contributions weren't made to the company's SIMPLE IRA plan for a period of about 18 months. He immediately made arrangements to make the missing contributions including lost earnings. He filed under VCP and will be getting a compliance letter. However, the draft of the letter says that the IRS will not disqualify the plan, but it doesn't make reference to any penalties. I've determined that 4972 doesn't apply, but I'm not so sure about 4979. The IRS says 4979 penalties don't come under the scope of VCP. I want to make sure that our client covers all his bases. Should I be concerned about 4979?

I thought I remembered seeing a good discussion somewhere (I think on BenefitsLink) that went over the issue of Participant loan payments being made with after tax money, and then the interest being paid back into the plan is taxed again when the funds are distributed at retirement. So in essence, the participant pays taxes on the funds twice.

Maybe it was an article in the newsletter instead of a posting on the message board.

Anyone recall that, or anything like that?

Thanks!

Dennis

We are preparing a Form 5500-SF for a Plan that has its assets at Principal Investments. Principal has provided us with their version of Schedule A, C, D, and H. From this I was going to pull information for entering information Line 8f (Administrative Service Providers (salaries, fees, commissions) and Line 10e (Were any fees or commissions paid to any brokers......by an insurance carrier.......)

The only disclosure involving fees on the information supplied by Principal above was the commissions and referral fee paid the broker on Schedule A. Schedule C has no fees disclosed and Schedule H has no fees broken out in the expense section.

Assuming Principal provides some disclosure to the Plan Sponsor which may explain why Schedule C blank, I guess.

But why wouldn't the Plan be required to answer on Schedule H the fees paid to Principal and the broker?

Many thanks.

Does the permissible withdrawal feature that applies to EACA's also apply to QACA's? I've been reading the Regs and Sal Tripodi's info but don't think it is is an option.

A few weeks ago we had a woman in her mid 80's call us to take over the administration of her defined benefit plan. Upon reviewing the plan, we found it to have assets that far exceeded the value of benefits (benefits at 100% of FAC). She has been the only participant, retired 15 years ago and has not worked since. It appears all filings, RMD's etc have been done.

It looks like the administrator just kept the plan going without suggesting terminating the plan back 15 years ago when it was slightly over-funded. Of course you never know the real story as the prior administrator does not want to talk about this. At a minimum, they should have considered an in-service distribution.

It looks like she could not have a qualified replacement plan as she has not worked and has had no earned income for 15 years.

Has anyone run into anything like this? Are there any potential solutions to avoid 50% excise tax and income tax on the reversion?

Thanks

Suppose you have a small calendar year DB.

1. Can you change from BOY to EOY for 2009 and then change back to BOY for the 2010 year without approval? 1.430(g)-1(f)(3) seems to allow this.

2. If yes, must the employer make a formal election to do so?

Does anyone know if an employee who is working abroad for a US employer and who qualifies for the foreign earned income exclusion because of income earned abroad can also participate in the employer's ERISA 403(b) plan with her contributions going into the Roth 403(b) option? In this situation my understanding is that she'll just pay FICA on her foreign earned income but I'm not sure if the foreign earned income also ends up on a W2 and if the IRS allows her to contribute some of her excluded income into her employer's Roth 403(b). Thank you.

As a result of a determination letter application, the IRS is questioning a client about the timing of the adoption of its 401(k) plan. The client set up the plan effective 6/1/06 and allowed elective deferrals immediately at that time. They formally adopted the plan 12/1/06, under advice that the plan would be compliant if it was adopted before the end of the year.

I understand that under 1.401(k)-1(a)(3)(iii) of the regulations, elective deferrals are not permitted until the plan is adopted. This seems very clear, but, first question, is there any exception to this that we may be able to use? My research hasn't come up with anything remotely helpful.

Second, the employer may have other plans with the same problem that the IRS has not yet asked about. Are we able to bring those plans under VCP to avoid Audit CAP? I am assuming it would be considered an "operational failure".

Third, does anyone have any idea what kind of penalties are assessed for this type of qualification failure under CAP? I've never been through CAP before.

Thank you so much for any help!

I am brand new to this business & wonder if the following is a practice thru-out the industry. The company I work for has clients sign the document pages for egtra but has not completed the document or provided it to the client including the summary. It is my understanding documents were to be completed by 04-30-10 - so they were signed by the due date but a final document hasn't been completed or provided to the client. Is this an industry wide practice to help manage the influx of document work? Surprised people signed without knowing what the document contained. . .thoughts?