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?

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