Employer wants to allocate a 7% PS contribution to all eligible participants. The document has a last day requirement for the allocation condition - all active and terminated participants will receive the 3% safe harbor contribution.

If the gateway/non-discrimiation testing are not required, must the terminated participants still receive a gateway minimum?

I'm wondering if there is anything preventing a plan from adding an amendment stating that for purposes of vesting, etc., an employee who dies while on leave is treated as if the employee returned to work on the day before he died? I would like the plan to add something similar to the provision in USERRA for active duty military personnel. I'm just wondering if there would be any conflicts with the Code if the plan did this?

Thanks

Whenever we prepare a distribution package for a participant who has QJ&S (usually merged MP plans these days), we run a calculation to give all the options specifically calculated for that participant's balance. However, someone recently asked me why I bothered with that, and that I could just give an example.

This had never ocurred to me. Any thoughts on how legit this is?

Plan has 139 participants at the BOY in 2008, 126 in 2009, and 118 for 2010, so the plan falls under the audit requirements for those years and the Schedule H filed.

However, we are estimating that the count will be about 90-95 participants as of the BOY for 2011. It is my understanding that if the count falls below 100, the audit is not required, is this correct (some disagreement in our office, some say must be below 80 to get out of audit)?

For the 2011 year which Schedule will need to be filed the H or I? Or is there a choice do to the 80-120... I believe they could file the I because there is no audit required...

Thanks all!

We have had a number of clients contact us after receiving their 2011 Safe Harbor Notice and they are telling us that they do not want to be Safe Harbor for 2011 or not sure if they want to be Safe Harbor for 2011. The document is written as safe harbor.

First, does the document need to be amended to remove the safe harbor feature of the plan? Or is it sufficient that the client DOES NOT provide the safe harbor Notice?

Second, can a plan that again has the safe harbor feature written in, give a Safe Harbor Maybe Notice to allow the client time to determine if they can really make a contribution for 2011?

What are your thoughts on this issue?

Years ago we took over a MPPP (Plan A) for a development authority whose document indicated that it was a corporation. We have always filed a 5500. Recently we discovered that the plan sponsor should have been indicated as a Govt entity all along. Are we required to file a 5500 for this plan? How do we discontinue the filings since the assets will not go to zero? (This plan underwent an IRS audit a few years ago with few questions and no problems indicated). To complicate matters, this entity was merged with another govt entity who had a MPPP (Plan B) that has never filed a 5500. Should the old entity have been filing a 5500? -- the prior administrator says no since it is a Govt Plan. Not sure what to do with this this since no plan B 5500 to show merged into Plan A 5500. Any suggestions?

If an employee contributed $16,500 to his 401(k) in 2010, terminated employment and went to work for a 501©(3) organization, can he defer anything to the 403(b) knowing that the 401(k) plan will fail ADP and he will be receiving a refund of say $8,000. I do not think he is able to but would appreciate any thoughts.

Large ESOP plan pays quarterly dividends, participants have option of receiving cash dividend directly. Dividend cut back to 1 cent per share. I now have over 500 uncashed dividend checks of amounts less than $2, any idea of what can be done with uncashed checks? Can uncashed checks be redeposited into participants account, even though they have elected cash payout of dividend?

A group of 12 physicians adopts a 401(k) plan and wants to adopt a DB plan.

All are HCE's and key from compensation and ownership. No employees yet. They may hire 1 or 2 employees in the future.

Only 4 want to participate in the DB but others will participate at a minimal level to pass 401(a)(26).

The meaningful benefit of 1/2% of pay per year has appeared in a few memos, especially the June 2002 IRS memo. It appears from reading the memo that only non-owner nhce's would have to be provided at least 1/2% of pay to be considered as benefiting. In this case, any nhce's they hire would have much higher benefits than 1/2% of salary.

Question: suppose 2 more physicians want to participate at a level of less than 1/2% of pay. Would they pass 401(a)(26)? Or must they receive at least 1/2% of pay to be considered?

Participant is age 73 on termination of employment on July 09.

Elects not to take minimum distribution for 2009.

Participant is rehired as part-time on May 2010.

Does the rehire stop required minimum distributions?

If no, is the 2010 minimum due 12/31/10 or 4/2011?

Can anyone cite any case law other than Supervalu saying that 4212© (evade or avoid) does not apply to only sham or fraudulent transactions?

Do we currently have a design-based safe harbor formula for a cash-balance plan ? Did the final and proposed regs add anything to this issue ? The 401(a)(4) regs under section 1.401(a)(4)-8© has a safe-harbor structure but some of the requirements seem outdated and would not allow you to take advantage of the more recent evolution of cash-balance plans (i.e., these regs require the accrued benefit to be the actuarial equivalent of the hypothetical account balance, require if you use a fixed interest rate that it produce the same present value as 417e rates).

I have a simple cash-balance design of 25% of pay for each eligible participant. Under a DC money purchase plan this would be a very vanilla safe-harbor formula, it is such for a cash-balance plan ? or do I need to go through the mechanics to general test it if I want the accrued benefit to be equal to the hypothetical account (not equal to the actuarial equiv. of the hypothetical account) ?

Thanks for any opinions.

In a cash balance plan where partners are allocated individual amounts can the contributions be expensed without partners incurring FICA tax obligations on these contributions? Under a profit sharing plan these contributions are typically subject to FICA. In short, is there an inherent FICA tax savings under the cash balance plan when compared to a profit sharing plan?

I am in need of someone that can write advanced crystal reports with use of the Relius database. Any referrals would be appreciated.

A plan failed to make RMDs for several years. Two questions:

1. If the employer corrects through VCP and asks for a penaly waiver, should the employee (HCE) also file a Form 5329 for each year? I doubt we will hear back from IRS on the VCP submission before the deadline for filing the return.

2. Are the distribution of earnings eligible rollover distributions? I would think not but can't find anything that excludes them from the definition.

Can anybody offer some guidance as to the FSA Mass Transit limits for 2011? Absent of some change in policy it seems that the increase from $120 to $230 will revert to 2008 levels as the Stimulus Package only specified 2009 and 2010 as being affected by the increase. Everywhere I look TPAs seem to still be offering $230 elections to participants. Am I missing something? Thanks.

See the Stimulus text below:

Bill Text

111th Congress (2009-2010)

H.R.1.ENR

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H.R.1

American Recovery and Reinvestment Act of 2009 (Enrolled Bill [Final as Passed Both House and Senate] - ENR)

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SEC. 1151. INCREASED EXCLUSION AMOUNT FOR COMMUTER TRANSIT BENEFITS AND TRANSIT PASSES.

(a) In General- Paragraph (2) of section 132(f) is amended by adding at the end the following flush sentence:

`In the case of any month beginning on or after the date of the enactment of this sentence and before January 1, 2011, subparagraph (A) shall be applied as if the dollar amount therein were the same as the dollar amount in effect for such month under subparagraph (B).'.

(b) Effective Date- The amendment made by this section shall apply to months beginning on or after the date of the enactment of this section.

I've recently been thrust into the roll of "Must know everything" and documents were not my thing. I am a QPA with 20 years experience but haven't had to keep up with the compliance end in my office, now I do.

So, The Heart Act, help, is this like an Interim Amendment. We prepare our own docs so can someone tell me exactly what I need to do to make sure that all our plans are in compliance and do all plans have to have this amendment?

On a separate note, where do I find the information on what Interim Amendments are due by 12/31 and who must have them?

Thanks

Friday's IRS Notice 2010-84 (http://benefitslink.com/IRS/notice2010-84.pdf) eliminates the need for an immediate amendment to allow in-plan Roth conversions. The amendment is not necessary, generally, until 12/31/11.

But I can't tell from Q&A-17 and its cross reference to Q&A-4 whether that also eliminates the need for an amendment allowing an in-service age 59-1/2 distribution (for a plan that does not have one), or whether it just eliminates the need for an in-service distribution amendment which limits the in-service distribution to Roth conversions only. (On a practical level, that may make no difference. You could always change a limited conversion-only distribution--for which an amendment is not needed--to a full-blooded distribution at a later date.)

Also, if a plan does not already contain Roth accounts, doesn't Q&A-20 require some kind of notice to participants explaining the addition of Roth accounts (even though an amendment is not necessary) so that participants can defer into the Roth in addition to converting into a Roth? And, if a Plan is hard-wired for quarterly deferral modifications, wouldn't you need to amend the plan to permit a deferral modification before 1/1 to permit Roth deferrals to actually be able to occur before 1/1 in order also to permit conversions before 1/1?

Thoughts? (I've also sent an e-mail to the author of the Rev. Notice.)

i just want to clarify "offset plan expenses". Is there a list of what expenses actually qualify?

For example, can we use this money to pay ERISA attorney fees or Co-Fiduciary fees? I apologize if this is a redundant request but I have searched this forum and the internet for a list of qualifying expenses to no avail.

Can a document failure to include the 5-year rule for re-deferrals be corrected under Notice 2010-6? If so, what section?