If assets are invested/tracked separately for each Adopting Employer (AE) in the Plan and benefits can't be paid from the assets of one AE to participants of another AE, can this still be considered a Multiple Employer Plan or is this really an aggregate of Single Employer Plans?

Ideally, the Multiple Employer Plan would have one Plan document, one Form 5500 filing but separate Schedule SBs for each AE, and a PBGC Premium Filing for each AE. Under this setup, would the Substantial Employer rules (annual notification, withdrawal liability issues, etc.) apply?

The information in the Multiple Employer area is somewhat limited and sometimes conflicting, so am wondering what the pension industry is doing for these types of plans.

Also, how do you file separate PBGC Premiums in the MYPAA web site? It won't allow multiple plans to be created using the same EIN/Plan Number combination. Is a unique Plan Number required for each AE?

Thanks in advance for any help you may be able to provide!

A group of physicians started a 401(k) PSP. They lease employees from a hospital and the leased employees participate in the hospital’s 403(b) plan.

I know that we must include the leased employees deferral and match contributions from the 403(b) plan in the 401k Plan's tests (ie ADP/ACP test). I also know that contributions to the 403b plan can be included in the 401k Plan top heavy testing.

What I don’t know is whether or not we can include the leased employees total 403b account balances in the 401k Plan top heavy test. In other words, can we include the leased employee 403b account balances for the entire period they were leased by this group or can we only include new monies to the employee 403b accounts since the inception of the physician 401k plan? The physicians have leased these employees prior to the inception of the 401k Plan.

Client sent checks to investment carrier for the 1/31/11 pay period on 2/2/11, but they never made it to the carrier. Broker noticed this on 3/7/11 and checks were reissued an deposited on 3/11/11. The latest they should have been deposited was 2/9/11. I have calculated the lost earnings which total $78.45 (used the DOL calculator). I've never filled out a 5330, so I am thinking I need to complete the Sch C section of the form, but what dates and dollar amounts am I supposed to use? the date that the dpoesit should have been made by (2/9) or the date the deposit was actually made (3/11)? The amount of the deposit (each check, as there were 5 checks) or the amount of the lost earnings on each check? My boss has communicated to the client that the excise tax is 10% (I think it is 15%) on the lost earnings. Is that correct?

A plan we have uses "self-service" with their payroll company to allow participants to manage their deferral percentage elections,. One of the participants requested a suspension of his deferrals on 11/30/2010 and he just realized that they did not stop. Is the employer obligated to refund these deferrals to the particpant. A confirm is not issued to the particpant when they do this. It would seem to me that that it is to late to refund 2010 but what about the 2011?

Church plans are not subject to the anti-alienation requirements of Code Section 401(a)(13) or ERISA Section 206(d). However, many voluntarily include language prohibiting a participant's benefit from being assigned, garnished, etc...

Can anybody think of any problem with a church plan that generally prohibits such alienation being amended to permit a participant's benefit to be garnished in the limited situation where the purpose was provide restitution to the plan or a particpating employer for a crime? Thanks.

Let's say you designed a CB plan and for the first 2 PYs you had an allocation group of "All Other Employees" getting $0. Then in year 3 before benefits are accrued you do an amendment to exclude those in the "All Other Employees" group by job category. All coverage, 401(a)(4) etc passes under both scenarios.

Basically they are going from being a "participant" getting $0, to not being a "participant". A popular book shows an example of participants in a DB plan being excluded by category after they were participants and states that their participation in the plan is "discontinued". Of course there are no cutbacks, it is all in the future.

Going forward are these "Excluded Participants" truly not "participants" now?

I have the above example from a book and I have someone taking the other side. The other side is they cannot be excluded once they enter and have to continue to be considered a "participant" going forward due to anti-cutback rules.

Any thoughts?

A participant in the ABC Company is looking to term her account. Her balance is over 5000 so she is required to have spousal consent signed and notarized. She claims that this is going to be a issue because she is a abusive marriage and has legal court documents that reflect this information. If she can provide court documents, would she be able to get a exemption from having to have spousal consent signed and notarized?

Please provide your thoughts and the Code and/or Regs that provide exemptions from spousal consent?

I think that I know the answer to this, but since there are always people with more experience, I thought that I would give this a shot. Can I terminate a SIMPLE IRA mid year and start up a 401k plan the same year for the same company? I think that my answer is no for several reasons -- calendar year requirement -- no other qualifed plan in same year, etc. , but I didn't know if anyone knew of a way around these reasons.

A calendar year plan terminated last year in April.

The plan is still in the process of distributing participant benefits. The participant count was about 300 as at 1/1/2010. After distributions there are about 55 participants left in the plan whose benefits have not been paid out.

Does this plan need an annual funding notice for the 2010 plan year to be prepared and distributed to the remaining participants? Or since the count is now much less and also the plan has terminated, the funding notice is no longer required to be prepared?

Thanks in advance for all clarifications and replies.

employer plan as a qualified retirement plan with a points system where they allocate X points for compensation and Y points for years of service. Do the limits for max compensation and annual addition apply to this type of plan? I would have said yes, but an attorney is questioning the salary cap.

Thanks!

I've got a 45 year old single client who does some 'moonlighting' and made about $20,000 in 2010. Through his 'regular job' he earned about $90,000 but his cost in his group health plan is so costly that he elected to take cash from his employer and has purchased his own HDHP within his HSA. Lets say for simplicity his annual HDHP premiums are $2,000. Through his employer's 401(k) plan, he currently contributes 5% of his salary, or about $4,000.

What would be the maximum contribution he could make to his solo-401(k) for 2010?

Here is my calculation:

Maximum salary deferral: 16,500 - 4,000 = 12,500

Maximum profit share:

SE tax: (106,800 - 90,000) = 16,800 subject to OASD, 20,000 subject to HI. So (16,800 * .9235 * .124) + (20,000 * .9235 * .029) = 2,459.47 SE tax, divided by 2 = 1,229.73

SE income = 20,000 - 1,229.73 = 18,770.27

Profit share max: .2 * 18,770.27 = 3,754.05

Total max solo 401(k) contribution: 12,500 + 3,754.05 = 16,254

So, a couple of questions:

1. Did I do this right?

2. How, if at all, would his deductible health insurance premium and HSA contributions be used in calculating his maximum solo-401(k) contribution?

Thanks for any assistance

BruceM

Under the Standard Premium Funding Target, is one required to use the end of year valuation dayte if that is the date the minimum required contribution is using

Hello, I am a CPA and I have a questions that I just can't answer anywhere else. This is my first post on this forum. Please help if you can

I have a client that initially used Form 5305A-SEP to start a SARSEP for his business (Model SARSEP). Then in 2002 he adopted, amended and restated his SARSEP using a "Prototype" SARSEP (later approved by the IRS).

He used the Model SARSEP from 1996 to 2001, then he has been using the Prototype SARSEP from to Jan. 1, 2002 to present.

Both the Model SARSEP and the Prototype SARSEP were properly adopted by corporate resolution and annual Board of Directors meetings minutes.

Also, the client has followed the plan properly since 2002 (at least) and has passed all the "Top Heavy" and "Deferral Percentage Limitation" tests.

Is the change from the "Model SARSEP" to a "Prototype" SARSEP in 2002 going to be a problem?

Or is it commonly allowed?

The only thing specific I can find anywhere is a sentence in Rev. Proc. 2002-10, Section 4, .05, it says "An employer using an existing model SEP for the first plan year after December 31, 2001, must adopt a revised model plan (or appropriate amended prototype plan) by the end of the first plan year.

It seems to me that the client is ok but I am by no means an expert. Please help. Thank you!

In a cash balance plan that provides hypothetical contributions based on X% of pay, can the plan be frozen during a plan year after participants have completed the year of service necessary to receive a contribution credit? The intention is to draft an amendment that would provide a hypothetical credit for the year of the freeze but only based on compensation paid through the date of the freeze, and completely freeze hypothetical credits in future years?

Example:

2011 calendar year plan

1000 accrual requirement

Current formula: 10% of plan year comp.

Amended formula 0% of plan year comp effective 7/1/2011

Participant attains 1000 hours in June 2011. Pay is $10,000 per month - $60,000 through 7/1, $120,000 through 12/31

2011 hypothetical contribution = $6,000?

When I went to work for my employer part of my negotiations was they would pay my full Heath Insurance Costs for my Family.

9 months later they informed me the would no longer pay the family portion and started deducting my family portion. I wouldnt have signed on with them for my salary if it didnt include family insurance. I have informed them I am not happy about this. Can they just do this??

When I went to work for my employer part of my negotiations was they would pay my full Heath Insurance Costs for my Family.

9 months later they informed me the wouln't pay the family portion anymore and started deducting my family portion. I wouldnt have signed on with them for my salary if it didnt include family insurance. I have informed them I am not happy about this. Can I sue them for the deductions?. I understand this will probably be the end of my employment with them.. :-))))

In order to make distributions to terminated participants, the company purchased stock from the plan. The stock paid dividends during the first month of the plan year. Would dividends be paid to terminated participants who received a total distribution of their 12-31-09 account balance? Doing this would mean they are still participants with very small account balances.

If dividends are allocated to participants of record at the boy minus those that received a distribution then how can the excess be handled?

We have an employer that offers various insured benefits through their wrap cafeteria plan. Because the benefits are with different insurance carriers, the contract years are different. Because of the different contract years, the employer has different open enrollment periods for the various benefits it offers through the wrap cafeteria plan. So, for example, to enroll in medical insurance coverage, the open enrollment period begins in July for enrollments that take effect in September. For dental insurance coverage, the open enrollment is in May for enrollments that take effect in July. Does anyone know if the different open enrollment periods for benefits that comprise one plan are permitted under the cafeteria regulations? I have not yet found anything in the cafeteria regulations prohibiting this practice. Thanks for your help.

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Have a plan that ended in 06/30/2010 that has a failed ADP test, excess deferrals were not distributed. What are the remaining options for corrections since they are beyond 2 1/2 month time frame?