Question: What is the advantage of filing Form 8905? That is, is there any advantage of a 6-year RAP vs 5-year RAP other than the 1-year delay of paperwork?

Thanks for all responses.

Hi all,

I'm looking for any books out there that discuss accounting for ESOPS in more depth from the sponsor's side and the plan than SOP 93-6 does. If there are n't any apart from that, can someone recommend other authoritative sources ?

Thanks.

I am looking at a document that defined a big accrual rate for the owner-employees, a middle-size accrual rate for each non-owner employee who meets the definition of a highly compensated employee for the determination year, and a wee little accrual rate for everyone else.

When goldilocks receives lower compensation and thus changes from a non-owner HCE to a reguler NHCE, must she receive a 204(h) notice before her accrual formula can truly drop down to the wee little rate?

CompanyX has about 20 full-time employees that it covers in its 401k plan. It also has about 20 part-time employees which have been kept at under 950 hours per year so that they don't ever become plan eligible. CompanyX has recently been it talks with Assante PEO. Assante says it will take the part-timers and make them Assante employees; then they won't be employees of CompanyX, and they'll be able to work over 1000 hours (in CompanyX's service) without becoming eligible for CompanyX's plan (or being factored into its 401b test). Assante might also assign these employees to other companies in order to get them 40 hours per week.

I've done some reading on this, and I find as many questions as answers. Has a definitive answer been given yet by the IRS/DOL? How should CompanyX treat these employees if they are transferred to Assante?

Also, some full-time employees (over 1500 hours) might be transferred to Assante also. Should they be treated differently than the part-timers?

TIA, Greg

In the preamble to the 403(b) regs, there is a statement that the 414© rules apply to plans referenced in section 414(b), ©, (m), (o), and (t), such as plans qualified under section 401(a) or 403(a), as well as section 403(b) plans.

I cannot find any provision in Code section 414 that applies the controlled group rules to 403(b) plans directly. Am I missing something? It seems that the 403(b) regs apply the definition of "severance from employment" on a controlled group basis, but it was my understanding that the controlled group rules do not apply for 403(b) purposes except through the indirect application of another Code section listed in 414 (e.g., the nondiscrimination rules).

Any thoughts on this would be greatly appreciated!

A participant in a DC (401(k) profit sharing) plan and their ex-spouse have agreed to split the ppt's account balance in the 401(k) 50/50. They have also agreed to take $10,000 each and save it for their child's education (minor child). Neither party trusts that the other will actually come up with the $10,000.

They want the ex-spouse's $10,000 to come from their awarded portion of the 401(k). Likewise, the ppt needs their $10,000 to come from the plan as well. So if the ex-spouse is the alternate payee under the DRO and half of the ppt's vested balance is $50,000, the AP will be awarded $40,000 and the remaining $10,000 will be for the child. Can the DRO state that $40,000 will go to the ex-spouse named as AP #1 and $20,000 will go to the child named as AP #2 ($20,000 with the thought that $10,000 is coming from each parent)? Since the child is a minor does a legal guardian have to be named in the DRO? Can the legal guardian be the participant?

Any guidance is greatly appreciated.

Hi all,

We administer several multi-employer trust funds - defined contribution plans, usually with only employer contributions (although some of the plans allow employee pre-tax contributions). We've had our first request to take a distribution from one of our DC plans and roll it over to a Roth IRA. Unfortunately, we've never dealt with this before. Can you tell me exactly what we have to do (if anything) that is different from a rollover to a traditional IRA? For instance - do we have to tax the distribution? What about the 1099r coding - is it still just a "G" or is there a special code for rollover to Roth? Anything else I'm missing? Seriously - I need A - Z instruction. Please help! Thanks so much!!

My client's loan policy and plan document provides for an in-service withdrawal for a participant who has defaulted on a plan loan.

The loan policy provides the following language: To prevent the continued accrual of taxes and penalties on defaulted loans which may not be foreclosed

because you are not yet eligible for a distribution, you may elect to receive an in-service withdrawal from

the Plan solely for purposes of allowing the Plan to foreclose on your vested profit sharing account balance due to a default on a Plan loan. The maximum amount that can be withdrawn is the amount of the unpaid loan balance, plus any interest owing to date. Further, the withdrawal may not exceed your vested profit sharing account balance minus the amount of Employer contributions allocated to that account during the two-year period immediately preceding the date of withdrawal. The request must be made at the times, in the proper form, and in the manner determined by the Committee.

My questions are as follows:

1. Is the "Foreclosing on Plan Loans" - in-service withdrawal considered a 411(d)(6) protected benefit?

2. If not, what type of lead time would participants need to remove this withdrawal provision?

Good Morning, it would appear that the preliminary talk about the 8955-SSA filing is that for 2009 & 2010, each year will need to be filed seperately.

Logic would have it that the TPA of record for 2009 prepare the 8955-SSA for any 2009 plans that have left they service as of 01/01/2010 and the new TPA for 2010 would prepare the 2010 8955-SSA.

Does anyone see anything different being discussed about filing the 2009 when you were not the TPA until 2010 or not filing a 2009 for a prior plan that has left after the 2009 testing year? Is anyone planning on preparing an 2009 8955-SSA for a takeover plan you received in 2010?

Any and all comments will be greatly appreciated.

Thank you,

A plan sponsor has a DB Plan and 401k Plan. A bond is required up to a maximum of $500k. Is this per Plan? Or would one $550k bond cover both Plans? The 401k Plan has over $5 million in assets so would require a $500k bond on its own. So, would the DB Plan need it's own bond? Possibly another $500k bond if it too has over $5 million in assets? Or I guess both Plans could be listed on the same bond but it's the amount I'm concerned with. Thanks,

We have a Section 125 plan that includes both our insurances and our FSA. In the past, we have only checked box 1 for Questions 9a and 9b. But I think we should also be checking box 4.

I think we fall under "insured and/or unfunded". There is no trust fund that the employee Cafeteria/Section 125 FSA deferrals go into. Instead the employer holds it in his own company accounts. That's how the deferral avoids treatment as earned income by the employee. The employer pays valid FSA expenses as they are presented by the employees (we use a TPA for administering what is valid).

That's why I was thinking that the box for Ques 9a 4 and 9b 4 should both be checked for "General assets of the sponsor".

Appreciate any help from a more experienced 5500 filer.

We need to do a 1099. We used FT for our fulfillment so we have no red forms.

1) Anyone know where to get a handful of red forms?

2) Would the IRS really reject if I sent in a laser printer version of this thing??

401(k) Plan needs to return deferrals to ineligible participant. What is the best way to handle this?

Ok, so a DB plan terminates. Question is, what happens to the lump sum limit for 415 purposes? Is it set in stone as of the plan termination date? If the distribution isn't made until a year or two later when the termination is finally approved, does it go up or down based upon participant's new age and/or changes to 415 limits, etc.?

Is there any formal answer to this, or only opinion? We're having a little informal discussion, and so far, it appears that there isn't any definitive guidance, only opinion.

Can someone point me to a good sample qdro available on-line? I looked at the IRS's version, but it is far from a "true template." Apparently Florida has rules where you can divorce without attorneys so they are not using any attorneys at all.

so instead of releasing a new form, I see they have released the latest draft, dated 4-28-2011

haven't looked at it yet myself, so don't know whatmight have changed from the original draft.

http://www.irs.gov/pub/irs-dft/f8955ssa--dft.pdf

Let's say someone's last day is Friday, and on the day befpore (thursday) they get a check that includes a month of severance. Is it excluded or included? The money was received PRE-severance.

I have an employee who forgot to complete his benefits update prior to the close of open enrollment in April. The system automatically defaulted to a standard plan and "waived" his dental and vision plans. Our plan year does not occur until June 1st, but our corporate benefits department is telling him that sec 125 requires they stick to an enrollment window and that the only permissible changes outside of open enrollment are "qualifying events". The employee is arguing that restrictions under sec 125 should only apply once the plan is in effect and payroll withholdings begin. I tend to agree and want to help him in anyway possible, but I am not sure what advice to give since corporate has told him no changes.

Any advice is appreciated,

Thanks

JM

If anyone has suggestions, or has developed a useful mechanism, for paying benefits (especially required minimum distributions) to incarcerated participants in, or beneficiaries of, a governmental plan, I would appreciate hearing them! (Note is a governmental plan, so not subject to ERISA.)

West Virginia law arguably requires the appointment of a conservator or other legal guardian before sums can be paid to an incarcerated individual, but does not specify who is to pay the costs associated with this; if the recipient is not willing (due to the small dollar amount of a distribution) or financially able (due to the costs of petitioning for court appointment/approval of a conservator) to arrange for the appointment of his/her own conservator, does the plan sponsor have the obligation to bear the costs to do so? We want to ensure the plan sponsor fulfills its fiduciary obligations, while minimizing cost outlay and the risk of a subsequent claim from the recipient that the funds were improperly paid out (if a conservator is not utilized).

One idea we are considering is having the plan sponsor contract, for a fairly minimal sum, with a local attorney to serve as “conservator” for any such incarcerated recipients. Has anyone tried this approach? We’ve also heard that some states may appoint a sheriff or similar public official to serve in such capacity, but we are not aware of any similar provisions in WV, and so are left without this option.

Any thoughts or suggestions welcome.

According to Rev Proc 2005-16, you cannot rely on VS opinion letter if the employer has maintained at any time another plan covering some of the same participants.

Does this mean all combined DB/DC VS documents will have to apply for Letter of Determination?

Thanks for all responses.