Example: Calendar Year Plan Year (12/31/2010) with 3/31 limitation year.

How does this impact my allocation and testing definitions? I 'm beyond the follow-up question of why isn't the plan year the same as the limitation year. That would be too easy.

Additional Facts: 1/1 and 7/1 entry dates and plan measures compensation from entry date. Plan Document: Corbel VS.

Compensation Definition in Doc: W-2 wages (plus elective deferrals) earned during the Employer's Fiscal Year that ends in the Plan Year.

I'm measuring allocation compensation from 4/1/09 - 03/31/10 for allocation purposes. I'm assuming my compensation limit and 415 limit is based on 2009 numbers because the limitation year begins 4/1/09.

What happens to the 7/1/10 entrant who apparently doesn't have compensation for allocation purposes in the 4/1/09 - 03/31/10 window?

Plan has last day and 1,000 hours rule for profit sharing allocation. I believe this is ok.

I would use 4/1/09 - 3/31/10 comp definition for 401(a)4 nondiscrimination testing.

ADP testing compensation. This is where I'm confused. I have a full plan year (1/1/10 - 12/31/10) worth of deferrals and understand the 402g limit is not impacted since it's a calendar year limit. I would think I would use calendar year compensation since it corresponds to the deferral period, but I'm unsure since it doesn't match the plan compensation definition period.

Does the limitation year have to correspond to the compensation definition period for allocation purposes? Example: Is it possible to have a 12/31/10 (calendar/plan year) limitation year, but the plan defines compensation from 4/1/09 - 03/31/10.

Is this getting ridiculous?

Participant takes a hardship for a home purchase, but the deal falls through. Can the money be re-contribyted? I think not, but in this case it's a decent chunk of change.

I just want to make sure I'm understanding this correctly.

Brother-sister controlled groups don’t have the separate “controlled group for 415” rules.

Parent-subsidiary does have the additional 415 rules. You just substitute “more than 50%” for “80% or more”.

The proposed regs had this applying to both types, the comments the IRS received prompted them to clarify the issue in the final regs.

I don’t understand why “one guy” who owns 100% of A and 75% of B doesn’t get viewed as a parent of both. It seems odd that if he made A own B he’d have one 415 limit, but he just owns A&B as an individual he gets two 415 limits.

Am I interpreting this correctly?

Hi!

I had a S Corp in 2002 and had set up a Simple(Individual) 401K with me as the only person.

I closed the company in 2004 and frankly neglected about the 2010 deadline.

Can I now close this 401K account and transfer to a new IRA account?

Or I have to file the Amendment signing for now a closed company?

Neither my brokerage firm nor I have the initial adoption agreement, when I file can I set the date effective as the 2002?

Thanks,

VS007

This is a personal question... My dad has Alzheimers and my step-mother has power of attorney. While reviewing some records, I noted that Dad might have a "lost" IRA (we consolidated his several IRAs a couple years ago and may have missed one). So now my step-mother is trying to get info about the account and the investment firm is requesting she present the original POA. The estate planning binders my step-mother and I have only have copies of the POA (I presume the original is at the lawyer's office). Other financial firms have accepted the POA copy.

So the question is: does the investment firm have any valid reason to insist on seeing the original POA or I am in the right to expect the POA copy be accepted?

EDIT: after further discussion w/ my step-mother, it's likely that she misstated the situation. But I'd still be interested in any answers for future reference.

I know this must have been covered before, but I just can't seem to put my finger on it. A 403b plan which excludes part time employees and they have employer match contributions. Just wanted someone to tell me if I am right when I assume that the part time employees must be considered in the coverage testing if they are not otherwise excludable under the statuatory exclusions. Thanks a bunch

I have a plan that failed the ADP test for the 2009 Calendar year, but did not make any refunds. This was just discovered last week. Can someone please tell me EXACTLY (by the book) what I need to do to correct this?

They failed the 2010 ADP test also, and only two refunds were made by 03/15. Of those 2 refunds, both were more than what the failure amount should have been. Is there anyway the participant can put the overage back into the plan?

Thank you for your assistance, I really appreciate it.

I work in the governmental 457b and 401a area.

Advisors I have worked with are always concerned about the inability to get equal pricing when a governmental agency has a 401a money purchase and a 457b deferral plan. The recent Rev Ruling 2011-1 will allow for the comingling of the plans into 1 trust (Contract).

I have worked with the following vendors and I know they cannot handle. There are work arounds but still the pricing is basically seperate and the 457b is always the drag on the much larger 401a. This is a huge fiduciary concern for the advisors I work with.

Does anyone know or can suggest a vendor that can handle these plans under one contract?

"A plan may provide that the benefit accrual required under [411(b)]" is reduced (but not below zero) by the amount of any actuarial adjustment under the plan in the benefit payable for the plan year with respect to the participant because of a delay in the payment of plan benefits after the particpant's attainment of normal retirement age."

This comes fom proposed reg 1.411(b)-2(b)(4), regarding adjustments for delayed retirements. This is also phrased as "offsetting actuarial increases against benefit accruals" earned after NRA. This language is probably cake to actuaries and many other plan professionals, but it has me baffled.

In one of the examples, a participant's monthly benefit at NRA with 30 years is $600. Participant works for one more year post NRA. His benefit would be $620 with the additional year of accrual. However, because the Plan has elected the above language, the Plan is "not required" to provide the extra accrual; instead it may provide the actuarially increased benefit of $672, which is the actuarial adjustment from the NRA benefit, based on delayed retirement. (This is from Example 2 of the reg)

I don't understand how this is a "reduction" or "offset." To me, reduction or offset involves subtraction. One variable is reduced by another variable. Rather, this is a matter of providing the greater of A or B, but not both. Is this simply a matter of industry terminology? What's even more confusing is that another example (example 6) does involve "offset" in my understanding (subtracting annual benefits from NRA benefits with additional accruals).

Can someone shed some light on this for me? Thank you very much.

I've been doing some research and have come across a few threads on this topic but none actually answer the question for me. We have a plan that has not yet made their 12/31/09 plan year end safe harbor non-elective contribution. I need them to make the deposit, plus earnings, but then what? Do we need to run an ADP test? Most more recent threads say no ADP test because you can't fall back on that option. By making the contribution more than 12 months after plan year end, it is an operational failure, correct? So that means VFCP or EPCRS? They are a fiscal year end of 6/30 for their corporation, so I'm not sure how that plays into things for deduction purposes as well.

Can anyone steer me in the right direction?

When must an amendment be signed to implement this change effective January 1, 2011. In my situation the owner (age 50+) has not made any deferrals. So I should be able to still sign this amendment, correct?

Plan sponsor wanted to establish a new Cash Balance plan (CBP) for 2010.

The requirement is that the plan must be "adopted" berfore 12/31/2010.

Since CBP is an individually-desgined plan, the documents have to be submitted to IRS.

Questiosns:

(1) What does "adopted" mean? Does it mean a formal corporate resolution to adopt the plan? Does it mean the doument must be signed before 12/31/2010?

(2) Assuming the plan was "adopted" before 12/31/2010 (as discussed above), will the IRS reject the submission as being "late"? Which Cycle document must be submitted (Cycle E - which ended 1/31/2010, or Cycle A)?

(3) In general, is it still possible to get DL for 2010 with an April 2011 submission date?

Thanks for all responses.

Under health care reform, nongrandfathered health plans, including self-insured plans, must contract with independent review organizations to conduct external reviews of appeals. Under Q/A 9 of the Affordable Care Act Implementation FAQs Part I, the regulators stated that a self-insured plan does not need to directly contract with any IRO and that the plan's TPA can contract with the IRO.

That doesn't answer the question whether a plan whose external reviews are being arranged by their TPAs must nonetheless execute a business associate agreement with the IRO. I've seen some secondary sources that say that a BAA is required.

Does anyone have any thoughts on this? What are TPAs doing who take on the responsibility of contracting with IROs?

As always, thanks for any help.

Does a participant who is not an owner have to take an RMD if their spouse is a 5% owner?

Please provide the Code and/or Regulation where this information can be found.

I have a client is is having trouble passing the ADP Test. The owners of company A (our client) are partial owners of another company B (not our client). There is no control group issue. Owners receive compensation from both companies.

Company A has a 401k plan. Company B has a simple IRA plan.

Can the owners make contributions to both Company A's 401k plan plan and Company B's Simple Plan?

The instructions state "Generally, if the "Yes" box is checked and the non-prescribed assumptions have been changed in a way that decerases the funding shortfall for the current plan year, approval for such change may be required."

When they use the word "approval" does that mean plan sponsor approval, or IRS approval? My understanding is plan sponsor.

And when they use the phrase "may be required", what is the "may" conditioned upon? When is it required and when is it not required?

Perhaps this is in the regs and I need to revisit them, but some input would be helpful too.

thanks

I need the help of the experts here. I recently came across a cash balance plan design as follows:

1st Plan Year - 12/31/2009 - 12/30/2010

2nd Plan Year - 12/31/2010 - 12/31/2011

Company Fiscal Year = Calendar

The goal being to double up deductions for 2010. Example:

1st plan year $250,000 deposited after 2009 TR due date, so deducted on 2010 tax return.

2nd plan year $250,000 deposited by TR due date, also deducted on 2010 tax return.

I know if you make a contribution after the tax return due date it can be deducted the following year, but the 12/31 start date just seems wrong.

I also know for DB deductibility, you have to choose a method of which plan year to use and stick with it. The excuse here was the plan was not signed by the tax return due date so the ending year had to be used and it will normally be the beginning year and a resolution says as much. This may be the problem.

So basically they are trying to use the fact that the PY starts in 2009, 2010, etc to claim a deduction for that year. Just seems off to me.

Thanks

I have one client that needs a fasb report.

the prior actuary prepared the 2009 fasb report incorporating expected return on assets as a component of 2009 net periodic pension cost. this computation was done in 2010 after the actual return on assets was known.

in preparing the 2010 net periodic pension cost here in 2011 I am thinking that it is more appropriate to use actual return on assets instead of expected return on assets as a component of 2010 net periodic pension cost. I sent the report out prepared in the same manner as was done last year, but I have second thoughts re: that aspect.

On the flip side if actual return on assets is used then it seems that the entire asset gain would have been fully recognized and thus no additional gain would need to be recognized or folded into the unrecognized total net gains.

Any views on this?

For the 2011 projection of net pension cost using expected return of course makes sense.

thanks.

As part of the definition of specified time or fixed schedule, 1.409A-3(i)(1)(i) provides that "an amount is not objectively determinable if the amount of the payment is based all or in part upon the occurrence of an event, including the consummation of a transaction by, or a payment of an amount to, a service receipient."

I interpret this to mean that if a plan provides that an employee will receive some percentage of the net sales proceeds from a sale of the company, the plan would violate the above language if it provided for the payout to be made in installments, as opposed to a lump sum, because the amount would not be objectively determinable.

Am I missing something?

Thanks in advance for any insights.

A court ordered a QDRO share of my late husband's 401(k) to his ex-wife. It is for a finite, specified dollar amount. I am to receive the balance after she receives her share. I am both the named beneficiary as well as beneficiary under Federal ERISA rules.

She has submitted a QDRO twice and both times the QDRO was rejected based on technical incorrectness. However, since then she has not re-submitted a new QDRO. We have been asking them to do so with no result.

It is our belief that she is deliberately delaying the submission of the QDRO with the intention of waiting for the market to drop -- as is anticipated as a result of the situation in Japan (and elsewhere). She is actually very solvent financially and she would not mind a small loss. Her goal has been more along the lines of hurting me, rather than gaining more for herself. That she gains more for herself is but a side effect. (and NO, I did not break up their marriage -- it was broken before I met my husband and he was already divorced from her at the time, so I did nothing to deserve this -- she is just that kind of person, unfortunately).

Since I am NOT as solvent, and I NEED this money in order to live (for my future) I am quite concerned about this. Is there any way I can force the submission of a CORRECTED QDRO?

I had the idea that perhaps an appeal to the judge to assess penalties for the delay and/or for the submission of incorrect QDRO's might work.

what are my options here?