As part of our application for a determination letter on a pretty standard 401(k) plan, we received a letter from the IRS that said the initial review has been completed and the file forwarded to Quality Assurance staff for review. I have never seen this before. Does anyone have insight on why this is happening to us now?

I cannot find authority saying that the ADP/ACP test must be run if the plan used the prior year data even if it adopts QACA. Anybody can point me to it? TPA says they must run the test even if plan satisfies QACA.

I have a client who provided information about the plan to two employees who have met the eligibility requirements to enter the plan. Both reviewed the plan and both declined participation.

Can these employees be removed from the plan for testing purposes? It is currently a safe harbor match plan and top heavy (satisified by SHM) but what if the employer chooses to make a profit sharing contribution? Will these employees be required to get a contribution?

This is a trivial exercise that hit me last night as I was reading an article printed off the internet. I have an 8 1/2 by 11 inch sheet with a 1 1/4 inch border both vertical and horizontal and justified printing.

Question: Approximately what percentage of the paper's area is taken up by the border?

Mathematics yields an answer that in no way agrees with what the eyes see. I was flabberghasted by this result.

If a terminated plan pays all participants in 2011, and total withholdings are only $1,125, can the withholdings be remitted using form 945 (since the total will not exceed $2,500)? I know this was allowed in 2010, but not sure if it applies to future years as well. If it's allowed, can someone tell me where to find a 2011 form? I can only find 2010 online.

If a Valuation assumes the payment form will be lump sum distributions, and the plan's actuarial equivalence used 7.5% pre and post retirement interest rates (84 UP table), do I fund using those interest rates while substituting ONLY the 417e mortality table for the mortality funding table ?

Or do I need to also assume some different interest rates other than the 7.5%, like the 430 interest rates or even the 417e interest rates ?

Thanks for the input.

Ireland plans to levy private pension funds a tax on their assets, a grab at private retirement funds.

http://www.irishtimes.com/newspaper/breaki...48.html?via=rel

We have plan w/fiscal PYE 09/30/11. Plan is terminated, with all assets distributed. We have everything needed to file final 5500 report now (May, 2011). Can a 5500 report be filed BEFORE the end of the plan year? Is there any reason not to file the 09/30/11 report now?

Participant in SEP received a lump sum distribution, then he decided he didn't need the cash for what ever reason. If within the 60 days of the distribution can this be returned to the SEP Plan account (he will pay entire amount back including any tax) or does it need to funded into a different IRA account?

Thanks,

I work for a TPA firm and need some clarification on this subject. We have a client that has been sending in double the amount of employee deferrals and safe harbor match for one participant since late 2009. Do we need to remove these funds from the employees account and into forfeiture or can we leave them in the employees ccount if they are under a certain dollar amount?

If we add in-plan Roth conversion to our 401(k) plan, can it ever be eliminated? Are in-plan Roth conversions a 411(d)(6) protected optional form of benefit?

An amendment is made 12/15 (not an -11g amendment) to provide an additional contribution to 5 individuals who were not otherwise eligible in order to pass testing. Plan subsequently terminates on 12/31. Are these 5 required to be vested?

One HCE with no Deferral for the Plan Year ending 2/28/10.

Deferrals for 3/1/10 to 12/31/10 total $18,492.66

Deferrals for 1/1/11 to 2/28/11 are $6,058.20

What is maximum catch-up that is available for Plan Year ending 2/28/11 ADP Test? I'm thinking $5,500 for 2010 and $5,500 for 2011.

For 2010 plan year employer prefunded $100,000 to their defined benefit plan. Due to several factors the minimum and maximum contribution is zero. The employer also has a 401(k) plan with a profit sharing feature. The employer has made no profit sharing contribution for 2010, but based on 25% of compensation could contribute $60,000. In reading the instructions for the form 5330 it says that the 10% excise tax is based on the the excess contribution less the amount allowable as a deduction under section 404 for that year. If the employer does not contribute $60,000 to their profit sharing plan would this reduce the amount of excess contribution subject to the excise tax to $40,000?

Hi all,

In our office we are debating on what distribution forms we should be providing terminated participants. We have a set of standard forms we have used over the years which includes the standard special tax notice (one for Roth and one for Non-Roth). Our standard distribution form requests the terminated participant information, reason for distribution (termination, retirement, death, disability, etc....), election (Lump Sum or Direct Rollover), as well as an election to have additional federal taxes withheld. On our standard form we ask for Spousal consent if the plan is subject to J & S, we have a participant release agreement, as well as the waiver of 30 day waiting period.

Most of us in the office would prefer we continue with our standard forms others suggest we must use the Relius document forms which would include a special tax notice, participant distribution notice, and the participant distribution election form.

Does anyone have any feedback on this? For those with the Relius document software are you using their distribution forms?

Thanks for the feedback,

Currently client has a non-SH 401k w/a discretionary match going to a small group of NHCEs (salaried only, excludes commission only paid NHCEs) and no HCEs receive the match. HCEs and all NHCEs can defer once meet eligibility requirements (3 months w/quartery entry dates).

If the match is changed to a SH Match - again going just to this small group of NHCEs - is there any problem with that? Obviously it passes 410(b) since no HCEs recieve the SH Match but I didn't know if something in the 401k SH rules forces them to give the SH Match to ALL NHCEs that make salary deferral contributions?

Thanks

I work with various Physican groups that have all Highly compensated with both share-holder and non-share holder classifications. Does anyone have experience with an employer reducing compensation to pay for benefits (LTD, LTC, and Profit Sharing contribution in 401k Plan) pursuant to a comp agreement that makes no mention of this arrangement. The physicians verbally agrees to this arrangement. The employer give the physician the one time option to take the "benefit" instead of cash and does not include the benefit costs in taxable compensation.

Additionally, the ER reimburses the employee for unreimbursed medical expenses (with no limit - have seen $100K plus reimbursement.)

My question -

1. If the ER group wants to do this type of "trade-off" can they legally do so within the employment contract? Can we use generic "ER may reduce salary to pay expenses" statement in employment contract.

2. Can the ER reimburse medical expenses without a formal MERP or 105 plan?

3. Is there a maximum that can be paid under a MERP type of arrangement?

4. Is it possible for the business to deduct the expense and not include the premiums paid or reimbursement in the physician's taxable income?

Thx

Anyone have a recommendation for a multiple employer document provider?

Assuming 100 to 200 employers, with the option for employers to have a few provisions that vary from each other.

The software we're looking at now can do this for only up to 20 employers, and it is a lot of manual work if one overall plan provision is changed affecting all employers.

One of our clients (An LLC) has a partner that is involved in a variety of different business ventures. He has W2 income from our client but his overall total income (including all his business ventures) was negative for 2010. His accountant called and stated that all his deferrals for 2010 need to be distributed back to him.

Is this correct?

Thank you

Hypo:

Plan is disqualified. Plan subject to taxation retroactively for all years. Previous distributions from plan were made as direct rollovers to IRA. Due to disqualification, rollovers now treated as excess contributions to IRA. Because previous distributions from disqualified plan no longer constitute eligible rollover distributions, IRS states distributions are subject to 10% early withdrawal penalty under IRC 72(t).

But:

IRC 72(t) specifies the 10% early withdrawal penalty is applicable to premature distributions from qualified plans. Does any other authority provide that this penalty can be imposed on a premature distribution from a disqualified plan?