Can a QACA safe harbor match be applied to deferrals over 6%, assuming the statutory requirements are met? In other words, can I have a QACA safe harbor match that provides 100% on the first 1%, plus 50% on the next 9%?

Given: RMD's apply to Roth monies inside qualified plans, but not to Roth IRA's.

Obviously, RMD rules are in place to ensure that taxes are ultimately paid on tax-deferred monies.

But is there a rule that states that when an RMD is taken, that the participant cannot choose to have the withdrawal made from his Roth account?

I have searched everywhere and asked everyone I can think of. I can only conclude that there is no answer and that the IRS didn't think through these rules very well when they decided to require the inclusion of Roth monies in the calculation of the RMD for qualified plans.

In my situation, the plan does not allow for in-service withdrawals, yet anyway. The business owner converted about $500K of pre-tax monies to Roth monies in 2010 (had a huge NOL in 2010 so no taxes were due). His RMD is about $40K. I would like to be able to give him the choice of taking $40K in income in 2011, OR taking the $40K from his after-tax Roth account, thus only having to pay taxes on the earnings portion of the Roth.

Any input would be much appreciated. I cannot find the answer in Sal's Book although I've been told that it says the participant can choose the money source.

I have an issue, where the company failed to pay installment payments to an individual for a period of four years. 2006, 2007, 2008, and 2009. With respect to 2006, and 2007, since the taxable year is closed, I believe you aggregate the income inclusion and include the income in 2008 (2006, 2007 and 2008 failures added together). Is this correct?

Also, is 2009 correctable, because it is a deferral failure that occurred year after the next failure year (failure in 2009, it is now 2011). Is that correctable via 2008-113 by including it income -- thus allowing the participant to not pay interest for the 2009 piece? Or am I missing something?

I believe 2006, 2007, and 2008 would not qualify for correction because they are more than a two years past the failure.

Any help would be appreciated.

Under ERISA 105©, we have to provide an individual notice to each separated participant for whom information is required on the new form 8955-SSA. Is there any official guidance with respect to the content of the notice? I know that it's supposed to be the same information contained in the 8955-SSA, but I haven't seen anything on this.

I just picked up a calendar year 401(k) plan to do the annual administration for 2010. Upon reviewing the assets for the 2009 Plan Year, I noticed that a $4,500 salary deferral made by one of the employees never made it into the plan. The company uses a leasing company that failed to transmit the money to the trust. In fact, it is still outstanding as of today. If it would be allowed, I would just like to complete a Form 5330 for the late deposit penalty and get this late deposit including estimated earnings back into the plan as soon as possible. This approach would be alot easier than to assume the salary deferral was never made. That would entail revising the employee's 2009 individual tax return, corporate tax return, individual tax return of the owner (Sub-S Corp), 5500-SF for 2009, 2009 Annual Report and on and on. I think that my first solution would meet the requirements under the self-correction program per RP 2008-50. I would appreciate any comments.

The aggregated purchases and sales of a plan's money market fund exceed the 5% threshold, but the trust statement lists no reportable transactions. Is there some kind of exception for money market investments or is this an oversight by the trust company? Participants are not allowed to direct investments in the plan, so that exception is not applicable in this case.

Voting rights are passed through to ESOP participants under IRC 409(e). Any authority that these rights also include dissenters' rights? Any authority that they don't?

Do you include life insurance cash value (or cash surrender value) as assets in Form 5500 (e.g. Line 7 of Form 5500-SF)?

Thanks for all responses.

I currently work in the TPA division of a CPA firm. I used to be a licensed broker, but my licenses have since expired. I am interested to re-licensing so I would be able to share in the commissions in order to offset plan administration costs. Since my firm isn't a broker/dealer firm, I'm not sure what I would need to do or if I could even attain my licenses.

At this point, I'm still just exploring the idea, but I would love to hear your thoughts on what it would take to become a broker dealer and/or partner with a broker dealer.

I have a profit sharing plan in which the only participant is the owner of the business. He wants to buy his in-laws house with plan assets (they are moving to a retirement home), remodel and sell the house, so basically flip the house. Is this permitted? Does it make a difference if he wants to demolish the house and build a new house to either rent or sell?

Thanks.

Can a CLU or ChFC who assist a plan sponsor on qualified plan contribution and tax-deductibility issues be considered an "Unenrolled Return Preparer" who can act as representative under Form 2848?

Thanks for all responses

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Hope someone out there can help. Our company is closing and the 401(k) plan has been terminated. Unresponsive accounts have been rolled over to an IRA with the exception of a handful of accounts blocked due to pending domestic relations orders. We are a California company and several of the blocked accounts are due to Joinders submitted. While there is a shelf life of 18 months on a DRO, there does not seem to be an expiration date for Joinders. Some of our Joinders were submitted years ago and no further action has been taken. The prevailing opinion is that there is no expiration on a Joinder. Any ideas on how we can proceed? Thanks.

I recognize there is no official guidance yet from HHS on what constitutes "essential health benefits" under PPACA, but I am trying to discover what employers are doing/attorneys are counseling in the interim. Several of my clients limit chiropractic visits to a specified annual dollar amount (e.g., $1,000). The annual limits on essential health benefits need to be removed (or phased out for grandfathered plans) this year. Is it reasonable good faith to retain the annual limit until there is guidance deciding whether chiropractic services are essential health benefits? if the plan sponsor removes the dollar limit and either imposes an annual limit on chiropractic visits or requires preauthorization of chiropractic services after the 5th visit will this adversely impact the health plan's grandfathered status? These clients are self-insured and aren't bound by insurance company decisions (which appear to be going both ways on the chiropractic services/essential health benefit issue).

I currently work in the TPA division of a CPA firm. I used to be a licensed broker, but my licenses have since expired. I am interested to re-licensing so I would be able to share in the commissions in order to offset plan administration costs. Since my firm isn't a broker/dealer firm, I'm not sure what I would need to do or if I could even attain my licenses.

At this point, I'm still just exploring the idea, but I would love to hear your thoughts on what it would take to become a broker dealer and/or partner with a broker dealer.

I can't find an existing thread on this topic. Am I the only one that sees conflicting information on this topic?

Code Section 72(t) does not exempt returns of excess deferrals from the 10% early withdrawal penalty; Treas Reg 402(g) states that if the distribution is made on or before 4/15 then it is not subject to the early distribution tax of 72(t), but does not give any sort of exception when it discusses distributions made after 4/15. So those 2 things together would make me think that distributions after 4/15 would be subject to the 10% penalty. Also, the IRS fix-it guide indicates that the 10% tax is applicable if distributions is made after 4/15.

However, if you look at the instructions to the 1099, 1040 and the 5329, there is nothing to indicate that the 10% applies, and actually the Form 5329 specifically states that the tax on early distributions does not apply to distributions of excess deferrals (with no discussion of the timing of the distribution). And we have been speaking to an IRS agent who insists it does not apply even for distributions made after 4/15.

Does anyone have any insight on this? And if the 10% does apply, will it apply to both the years (the year deferred as well as the year distributed)?

The answer to this question seems obvious to me, but I wanted to run it through the forum. An employer just informed us that he cannot make the 2010 safe harbor NEC contribution of 3%. Is there any relief anyone knows of?

We have an S-Corp that sponsors an ESOP. The plan states that all distributions will be made in cash.

An Amendment is being considered to allow current shareholders to elect stock distributions when they become Qualified Participants for Diversification purposes.

The Amendment would also permit current shareholders to elect stock upon termination of employment.

Non-shareholders would not be permitted to elect stock.

Is this discriminatory, or is there some element to ESOP's sponsored by S-Corps that would allow this?

There are some shareholders who are Non-HCE, but the satisfaction of the 70% test of 410(b) is not guaranteed (effective availability issues).

Any thoughts?

For about a decade, a husband (100% owner) sponsored a qualified 401(k) for his office, covering his employees.

For the last 8 years, the wife (100% owner) offered a SIMPLE for her business, covering her employees.

1. They have a minor child

2. They live in a community property state

Under §1.414©-3(d)(6)(i), they have a problem. Can this be fixed by just renouncing community ownership in these two assets (the businesses)?

Blah...

We took over a plan from another TPA who didn't keep good records.

First, my question is, how do we do the plan termination amendment when we have no one to sign now? It was a Solo K and the only participant (owner/trustee) passed away.

Second, the prior TPA didn't have any beneficiary forms on file. The owner was not married. I have asked the broker (who has been in contact with the owner's child), if the child has found any beneficiary forms with the owner's personal or business files. Lack of that, the plan is directed to pay out to the estate based on the division of the Will, correct? (For instance, say he has 4 children and the Will states liquidation of assets and division of the liquidation at 25% to each.)

Thank you so much for any advice/opinions you can give.

A plan was terminated 12/31/10. The employer contributed an amount that was between the min and max. The accountant missed part of the contribution that was made in April 2011 and did not deduct what was reported the SB - Plan Yr and Corp Yr are the same. Can the accountant deduct the amount he missed on the 2011 return?