I am a financial planner in Texas and I was hoping for some direction on 401(k) plans if possible. I have a client who is a U.S. citizen who is planning on moving to Switzerland within the next couple months. My question is once he moves abroad what happens to his 401(k) plan that is held in the U.S.?

1. Assuming he leaves his current job here in the U.S. and joins a Swiss based company. Can he simply roll the funds into an IRA rollover? What if He maintains his current job with his U.S. based firm but lives in Switzerland?

2. Are there any immediate tax issues to be concerned with if he is no longer employed in the U.S.? The client is in his early 30's and has no plans or need to withdraw the funds.

3. The assumption is that the client will maintain his U.S. citizenship.

4. Does anyone know of any resources regarding Swiss employee benefits and retirement plans?

I realize my query might be a bit unorthodox but if anyone can provide any insight or resources to me that would be extremely helpful.

Thanks.

A plan freezes accruals and one participant's accrued benefit was being capped at the time to 30% of the 415 high-3 limit based on 3 YOS. A year later the participant has 4 YOS - would his frozen AB increase to the lesser of 40% of the 415 limit or what his AB would've been at the time the benefits were frozen without a cap? In other words, is the frozen AB literally written in stone even though the participant's 415 limit continues to grow? Is the answer different if he was being capped by the 415 $ limit instead?

When I get detailed information, this will be checked with an ERISA attorney if there is any doubt.

Doctor group one - it is a P.C., specialized area.

Doctor owned sub-s corp. 100% owned by an employee, non-owner of Doctor group one.

THe sub-s corp provides training for home care of clients of Doctor group one, home care supplies and an on-call registered nurse who also makes home visits. CLients of sub-s must visit the office at least once a month, and practitioners of Doctor Group one are available for consultation.

Doctor group one specifically advertisers the existence of the sub-s corp.

It appears to NOT be a FSO-A org because no owner of group one ones any of the Sub-s. It is an HCE of group one that owns the sub-S.

as for the B org - I am getting income numbers. However it appears that all of the activities of sub-s are for clients of group one, and of a nature traditionally provided by employees of group one.

THe provisions of the home supplies and the existence of other independent companies that do the same work as sub-s gives rise to a concern that this might not be a B org.

Any other items I should be gathering? Any exceptions to the ASG rules that might apply here?

Thanks in advance for your thoughts.

We have an employee who terminated about 10 years ago and so his 401k loan at that time defaulted. He was rehired maybe a year or so later and now our recordkeeper says he can never have another 401k loan again because of the default on his record. Is this the law somewhere, or would this be a plan provision that we should be able to get changed?

2009 Plan Year Minimum Required Contribution goes unpaid. There are no quarterly installments are required in 2009.

There are quarterly installments required in 2010.

I understand that all payments have to be applied to the 2009 unpaid minimum first. I'm confused as to whether I'm just using the 2009 effective rate, or if I need to add the 5% penalty at any point.

Any advice is appreciated.

So I'm filling out a Form 5307 - determination letter for a proto document. I'm not sure what question 3n is asking when it says: Is this plan an offset arrangment with any other plans?

Of course the 5307 instructions don't help. Anyone know how I would go about figuring out how to answer this question?

I'm a 51% owner in Company A who sponsors a 401(k) Plan and then terminate employment and sell my ownership.

I then start Company B where I'm a 51% owner and establish a 401(k) Plan.

I then take my distribution from Company A 401(k) and rollover the money into Company B 401(k).

Would this money be considered an unrelated rollover in Company B 401(k)?

Does the answer change if I was a 100% owner in Company A and B?

As part of the EGTRRA restatements, we filed and received favorable determination letters some time ago for all of our clients...except for one. We filed the Form 5307, etc. in early 2010 and received the standard acknowledgement letter from the IRS dated 2/12/2010. And that is the last we heard from the IRS -- no follow-up, no determination letter. So, I called the 1-877-829-5500 number earlier this year and was told that the review was "in progress." I was able to have the representative put it for review by a supervisor, who I was told I could expect to hear from within 30 days. Naturally, I never received a call. Two months go by and I called the number again and get the same "review in progress" answer. On 5/3/2011, I sent a fax to (513) 263-4330 number shown on the IRS website to request copies of EP Determination Letterss or case files. It's mid-June and I still haven't been contacted.

As this point, I'm sure it's just gathering dust somewhere or has been completely lost. As noted, it was received by the IRS and the client paid the $300 User Fee, so if we had to re-submit things because it's been lost, then we would do so. But I can't seem to get an answer on what happened here. Does anyone have any ideas on the best way to contact to the IRS to get information on a 5307 filing?

Thanks.

Would characteristic code 3B "Plan covering self-employed individuals" be used for a plan set up by a Partnership?

I have a plan that made a distribution to a participant who is actively employed and below the normal retirement age. A VCP application has been made, and is yet pending. I'm preparing the Form 5500, and two of the questions trouble me a bit as to how I ought to answer.

One is line 6b. It is checking for the eligibility for the small employer exemption to the annual audit requirement. It asks, "Were all of the plan’s assets during the plan year invested in eligible assets?" Part of the assets properly belonging to the plan were for a time during the year held by a plan participant who was not entitled to it. Is that considered an investment in ineligible assets?

The other concern is line 10b. It is probing about the possibility of a prohibited transaction, Title I style. "Were there any nonexempt transactions with any party-in-interest? Since this was not a proper distribution being that it was premature, was the payment to the participant a nonexempt transaction with a party-in-interest?

Things seem to getting more complex as companies evolve away from DB plans - instead of easier - opinions below?

FACT: Participant A

DB plan - traditional years of service and final average pay. The early retirement benefit actuarially reduced at time of retirement, unless you satisfy Rule of 85. [Age 55 with at least 30 years of service] - if you satisfy rule of 85 you get your full retirement benefit at 55 or thereafter with age 55 and 30 years of service.

Participant A left the company at age 52 with 34 years of credited service.

Participant is now Age 54.

Plan X terminated further accruals Jan. 1, 2010. She did not get notice of the cessation of further accruals. It supposedly will be terminated - though no one has received a notice of termination either. This is a big company - I cannot imagine they messed it up, and my client may of course have a bad address on file - don't have any of those facts yet with copies of the documents from the plan sponsor and administrator. Lets assume that Plan X is fully funded with a standard termination on Feb 1, 2011. My client turns 55 on June 1 2012. Fortune 500 company - regulated utility - internal staff, outside contract administrator,m internal administrative committee for investments and administration/ appeals.

The SPD and plan document do not specifically require that a participant be actively employed on the date they 'retire.' The definition of 'retirement' is satisfying the provisions to receive a retirement benefit. The plan document contains a separate 'vested terminated' benefit section - but thats only there to preserve term vested benefits. Do not have their pattern and practice yet.

Issue #1: Can she age into early retirement benefit? And is it thusly 'accrued' for payment at plan termination [a lump option will be provided supposedly but obviously the difference between $2400 a month starting at age 55 and $860 a month is substantial]

Issue #2: The VP of benefits for the company has decided that a participant needs to be employed at the time of application to receive a subsidized early retirement benefit. The Plan document states that benefits applications must comply with plan rules - but no plan rules are published or available to an employee even if they request them. Can this provision be enforced - the SPD is silent on required employment at the time of benefit application for either the normal, early or disability retirement benefits.

Issue #3: This is an additional fact: Plan X plan sponsor spun off a new company. Participant A had the choice of remaining with Plan X sponsor or going to the new company. She ASKED the HR Generalist for Pensions a specific question "with the plan projected to be terminated in the future, and if I leave at age 52, can I age into the benefit later." She was affirmatively in writing told YES. LAter - when the plan terminated - she was told that VP of HR had decided that in order to qualify for an early retirement benefit she needed to be employed at Plan X sponsor at the time she applied. Furthermore, assume that Plan X employees who could simply age into the ER subsidy ARE being paid as part of the plan termination. Does she have a claim against the employer for negligence - she received a mea culpa email apologizing for being wrong in her advice about her employment decisions - this is where the ERISA sole source of claims rule destroys an employee who makes a career decision based on incorrect advice about a benefit plan

Issue 4: Can she simply go back to work for Plan X sponsor and age into the benefit and then make the claim? How does the plan termination effect that?

Thanks- this is very complex and there are lots of moving parts of the analysis - and I'd appreciate anyone's thoughts on the matter - this client clearly got screwed by her former employer-0 and they are apparently including provisions that are not in the plan or SPD to limit the payment of an aged-in early retirement subsidy - Rev Rulings and other sources are all 25 years and probably a dozen changes in the law later - thus my reach out to current practitioners . . .

Would appreciate direction on where to locate the following:

(a) How many single-employer ERISA DB Plan there are (say as of the end of 2009). Breakdown by company size would be highly desirable.

(b) How many of these are frozen

© During 2009, how many terminated

I've done Google searches, the IRS, DOL, PBGC, and GAO and more likely than not ran right past what I'm looking for.

These questions are related to section 23(d)(3) of the Corbel DB non-standardized adoption agreement and section 5.2(j) of the Corbel basic document of the adoption agreement (EGTRRA updated).

We are adding an employee as a participant pursuant to the above provision of the document. Questions:

(a) Is the accrual calculated using the accrual rules as adopted in the adoption agreement?

(b) Can this be just a one year accrual, i.e., for next year, if the plan passes the test without this particular employee, can we exclude him at that point?

© Do we count him as a participant in the year of failure or in the year we are doing the correction, i.e., do we need to calculate a pension contribution for him in the year of failure or in the year of correction?

Any guidance would be greatly appreciated!

For 2009, an analyst didn't remember that the rules had changed, and filed a 5500 for a one person plan because it was a controlled group. Should have filed an EZ. Now, for 2010, they have other participants, so a 5500 is now the appropriate form.

Just seeing what other folks would vote for. Would you:

A) Leave it alone, and hope the DOL never kicks back the 2009 form

B) File a 5500 EZ with the IRS for 2009, as an amended form, and attach the confirmation from the DOL to prove that the original was timely filed, but inadvertently filed as a 5500 rather than an EZ

C) Other

P.S. - they don't qualify for the SF

Thanks!

I'd learned several years ago (2008?) that John Hancock's mutual funds inside their contract were no longer reported on schedule D filings. Does anyone have any knowledge on this that is definite?

Sungard's synopsis of the changes

"The IRS has just released the 2010 Form 5500-EZ and its corresponding instructions. The new form is essentially identical to the 2009 form, except the 2009 form had only 6 boxes for characteristic codes while the new form has 10 sets. Read our Technical Update."

Why on earth was this thing delayed for months if that was the only change???

Multiple employer plan for 3 employers: Companies X, Y and Z. Participant A works for both Company X and Y. X and Y are not a controlled group. Participant A contributes from pay of both companies. Top heavy test is run for each company. Participant A will need to be included in each TH test. Do you have to do separate accounting for the participant to determine the account balance used in each TH test? How is this handled?

An insurance agent sold a profit sharing plan to a Dr. group. The group has 6 participants (2 doctors, and 4 staff). The insurance agent set up each participant in an individual variable annuity. The annuities have sub accounts that the employees can direct. The plan document says the employees can direct their investments.

The plan's new advisor wants to ultimately get out of these annuities for the employees, but because of surrender fees, he doesn't want to move them right away. For the two doctors, the annuities make sense, and they want to keep them. Since 90% of the money in the plan belongs to the doctors, the advisor is at a loss as to what to do with the employees.

Since the employees don't have enough money to be up on a platform, I suggested that he open individual brokerage accounts for them, and they could invest the funds however they wanted to.

He's concerned about costs. He feels that if he pools the employee money, he can take advantage of cost savings because they will his some sort of breakpoint at the mutual fund company. The pooled account would be directed by the trustee.

If they set up this pooled account and give the employees the option to invest in this or in annuities, does it still count as participant directed? It kind of makes me think of the pooled account as a "fund of funds" type option, but it makes me nervous that the trustee is directing the funds.

Any thoughts?

Having brain freeze this morning.....

Are you allowed to terminate a money purchase plan and then immediately start up a 401k? Or is that one of those situations where you have to wait a year after terminating the money purchase before you can set up the 401k?

Doe anyone know if there is a late filing penalty for form 945 if all deposits were made timely?

Circular E talks mostly about form 941 and indicates there is a late filing penalty equal to 5% of the unpaid tax for each month or part of month the return is filed late.

In this case there was only $5,000 withheld and it was deposited timely with no tax due.