• New 401(k) plan established in 2009.
  
• Business owner born in 1939.
  
• All of the money in the owner's account is Roth elective deferral source.
  
• Spouse/beneficiary is 13 years younger.
  

It appears that the owner will be required to take 4 RMDs before the 5 year period is satisfied. (Obviously, he is annoyed that no one mentioned the 5 year rule, or RMD rules, before he set up the plan.) This year's RMD amount will be ridiculously small.

Is it possible to specify that the distribution is all basis and leave the earnings in the plan?

I've been doing some reading about 403(b) participation when a not-for-profit agency has a for-profit subsidiary. In this case, the 501©(3) does not want to include the employees of the new for-profit LLC in the 403(b) plan. The easy answer is to say that since the LLC is not a 501©(3) organization, those employees can be ignored for 403(b) purposes. Could it be that easy? One reason I'm concerned is that the 501©(3) expects to add more for-profit businesses over the next few years, so I want to cross this bridge now rather than waiting until there's a bigger problem involving even more people.

We have a client medical practice corporation. There are two shareholders, each owns 50% and each is a member of the board of directors (only two members on the board). Upon termination of employment, the shareholder physician employment agreements provide that the employee (shareholder physician) is entitled to receive the A/R directly attributable to his physician services as it is collected during the 180 days after termination. Payments of the A/R collected will be made as it is received but not less than monthly beginning 60 days after termination. The issue it seems to me is whether this arrangement meets the requirements of 1.409A-3(i)(1)(iii), in particular -3(i)(1)(iii)(B), as to whether employee has effective control of the corporation. I have not seen any guidance as to what constitutes "effective control" for this purpose. It is clear that with two 50% shareholders, neither has voting control and all decisions require unanimity but I am not sure what criteria might come into play for the "effective control" analysis under this provision of the 409A regs.

Any thoughts would be greatly appreciated.

I am looking for some guidance here. Plan renewal date is December 1, 2010. The client is renewing a plan with exactly the same provisions as last year except for 1 thing. Instead of Rx copay $15,$25,$40, it is now $100 Rx deductible and then $15,$25,$40.

I know the deductible can go up 15% plus medical inflation. But what if the current deductible is zero?

They would like to keep their grandfathered status, even though they do not have any discriminatory practices. Everyone has the same entry date, same % of premium paid across the board, no one excluded once probationary period has been met.

Thank you.

Hi there...

If anyone could help me out, I would appreciate it.

I was divorced 12 years ago. In the divorce settlement, it stated that I was to get 54% of my (ex) husband's pension benefits. Recently, I realized that my lawyer did not file a QDRO, so I gave her a call. She immediately responded, and filed it in August of this year.

Just in case a copy was not sent to my ex's company, I personally sent a letter and copy of the QDRO to them.

The next month, in September my ex died in an accident.

After one more month, in October, (since I did not receive a reply,) I called his company. They said they did not receive a QDRO. So once again, I wrote another letter and sent a copy of the QDRO. This time I sent it by certified mail. They got this one.

My Ex died BEFORE he was able to draw his retirement. He had to wait 1 1/2 years before he was eligible.

My ex did not remarry, and he did not have any beneficiaries or etc. appointed.

The QDRO states that I am the alternative payee, and I was assigned a benefit equal to 54% of his benefits.

It also states that I can start receiving pension benefits at the earliest payout time, which would be in 1 1/2 more years.

and...

*Prior to the commencement of benefits to the alternate payee, the alternate payee shall be treated as the surviving spouse for purposes of the qualified pre-retirement survivor annuity with regard to 100% of the participant's accrued benefits.

Can you tell me what this means?

Today I received a call; I was told that they would be sending me application papers, but there was no hurry for me file them..

Ok...The amount that they told me that I would receive is $205.15 per month. This does not seem right. It seems very low. I was told that he did not sign up for joint survivor benefits. Because he died before receiving his retirement, will I get a lesser amount?

I am very confused. I am not even for sure what questions that I should be asking.

Thanks,

She

If you received your attendance verification form for the 2010 ASPPA annual conference, you may want to look it over carefully. I attended two ethics sessions, but only one showed up in the ERPA Ethics column. Workshop 25 was the one that was not credited properly. I called the number listed and they e-mailed a corrected form.

Hi Everyone:

Company A sells majority of its assets (and moves its employees) to Company B. Company A is owned by the spouse of the Company B's owner. Owner of Company B was once Company A's CEO/owner. Both companies have a 401K plan for its employees.

Can Company A give a termination distribution to the employees that have quit and joined Company B? Or because its in the same control group (assuming constructive ownership between the two owners by marriage), is only a merger possible, without the possibility of a termination distribution (same desk rule)?

Any insight would be deeply appreciated.

Does anybody have a formula for converting a life only annuity into a cash value annuity? Thanks!

I am long-term actuary for a DB Plan sponsored by a not-for-profit agency. The agency pays my fees out of the Plan. Of course, since PPA, the TNC incorporates this fee (expenses are assumed to be the preceding year's).

Anyhoo, the Agency is celebrating its 2,000 birthday and I would like to make a personal donation (from personal, and not business checking account) of say $100 in commemoration of this occasion. Assume the $100 is deminimis relative to my fee.

Anyone have concerns that this gesture could fall under the category of "No good deed goes unpunished?"

Can an employer credit service for an employee that paticipated in a foreign pension plan (i.e., ABC Company in Canada) and now that employee transferred from working at "ABC Company in Canada to the ABC Company in the US location. ABC Company (i.e., U.S. Plan) has a 90 day service requirement for eligibility.

Can someone provide me with any Regulations or Code with respect to this topic?

EPCRS is available to correct a missed MRD for a qualified plan, and to ask that the IRS waive the excise tax. Is there anything comparable, anywhere, for correcting a missed MRD for an IRA, and for waiving the excise tax?

If not, what do you do when an IRA's MRD was missed, other than pay out the MRD and file the excise tax return (Form 5329, part VIII) requesting an abatement of the tax. Anyone had any success with this approach?

Is anyone aware of which retirement plan vendors are offering In-Plan Roth Conversions in 2010?

Effective 12/31/2008, plan A participants become 100% vested and merge into plan B which has a 5 year graded schedule.. Anyone hired after 1/1/2009 is subject to the 5 year graded schedule. So if I was hired by plan A in Feb 2008, as of 1/1/09 I am now 100% vested. If I was hired by plan B in Feb 2008, I am subject to the 5 year graded schedule. Does this require a BRF Test? If so, how do I break down the groups? Plan A employees vs plan B employees, or years of service and anyone over 5 year in plan B as 100% and test them with Plan A employees?

In addition, there is a 3rd plan in the controlled group with a different schedule. Can I simply count them as nonexcludable-not benefit?

Does anyone know of a message board where general questions of this nature can be asked, unless someone would be willing to tackle the question here?

Currently attempting to determine the 2010 testing wages (414(s)) for an HCE in a plan using high 3-year average compensation. The individual's highest three years (without limiting for 401(a)(17)) are:

1999 - $199,999.92

2000 - $199,999.92

2001 - $275,000.00

Section 611© of EGTRRA allowed the use of the 2002 401(a)(17) limit of $200,000 for pre-2002 years.

Is this still true? I understand the the 2007 regs have re-interpreted how this is determined, and the 401(a)(17) limit for the year in question applies?

EGTRRA 611© = 199,999.92 + 199,999.92 + 200,000.00 = 199,999.95

2007 Regs? = 160,000.00 + 170,000.00 + 170,000.00 = 166,666.67

2010 Limits? = 199,999.92 + 199,999.92 + 245,000.00 = 214,999.95

Any opinions?

A terminating plan is scheduled to distribute assets by the end of the year and we just received notice that a participant is in divorce proceedings and that a domestic relations order will be forthcoming. Could the pending order hold up distribution of assets when those assets must be distributed by date X to comply with PBGC and IRS distribution timing rules? What can we do with this participant's benefit?

OK...I just want to make sure I understand the 401k ROTH deferral as far as the FICA/Medicare taxing and filling out the W2

Example: An employee defers $10k to ROTH in a 401k (we're dealing with a C Corp). The employee portion of the FICA / MEDICARE would be 7.65% or $765, therefore only $9,235 is transferred to the ROTH account. The employER must also pay it's portion of the fica/medicare or $765. Am I correct thus far?

What and where would the ROTH portion and taxes for on the W2?

Plan Year = Calendar Year

Eligibility: Employee shall be eligible to make deferrals on the first day of the first month or seventh month of the Plan Year coincident with or next following the date … he completes one Year of Eligibility Service;

One Year of Eligibility Service is 12 months period beginning with employment date during which he completes 1000 hours of service.

Employees hired on 11/1/2009. Complete 1000 hours on July 1, 2010.

Question: When can employee start participating?

Analysis: He will complete a Year of Service on 11/30/2010. The Plan Year that is "coincident with" the date he complete one year of Service is 2010.

Conclusion: He can enter the plan on 1/1/2010 because that is the start of the Plan Year (2010) that coincides with his completion of a year of service.

Comments?

Thanks.

IRS sends request for information CP-403 saying they have not received info from EBSA on plan 002 for 2008.

Sponsor only has plan 001.

In checking, we find EBSA says they do not have plan 001 for 2008.

How do we now respond to IRS? They recently returned a 5500 of another client sent in response to a similar letter and said we had to file electronically.

And how do we deal with EBSA with proof of mailing - clearly we don't want to used DFVC since we have proof of mailing. And they haven't asked for anything.

Today I sent the IRS $64.25.

I received this evening an email with subject "PTIN Welcome Letter"

The message read: "Attached please find an official communication from the Internal Revenue Service about your Preparer Tax Identification Number (PTIN) application" (Note, no period at the end of the sentence)

The attachment was an .rtf word file with a bunch of numbers as a title.

This is either a phishing scam or the IRS needs to use some alternative communication methods. If this is a phishing scam, then the IRS website may be compromised.

I did not open the rtf file.

Here's an enjoyable comment I found on Tax Almanac: "Funny but when I sent it to the "phishing Desk" they sent back the standard warnings that 'we never email you.' I am not sure which one of us, the IRS or self, is dumber for I read that they would send this but forgot. "