Plan sponsor has a DB and DC plan. The DC plan is not safe harbor and they routinely fail the ADP test, and correct by making a QNEC. Can the QNEC be used to satisfy part of the Gateway required for the DB/DC testing? For example, if the Gateway is 7.5% and the QNEC is 3%, does the QNEC of 3% plus another 4% profit sharing contribution satisfy the Gateway?

A sole prop has a safe harbor (3% non-elec) 401(k) Plan. He has a couple of employees that have been deferring and have received the appropriate SH contributions for the year so far (funded with each payroll). The plan is being terminated effective at the end of November. The plan year is the calendar year.

The question is... Will the owner have compensation for this plan year? Will he need to wait until the end of the calendar year when the accountant can prepare the Schedule C in order to determine if he had a profit for the year. Is that number then prorated for the portion of the year in which the plan was in operation in order to determine his SHNEC contribution amount? OR will he have no compensation since it is not determined until after the plan is terminated?

Are flat dollar allocations allowed for profit sharing plans, or are they only allowed in pension plans?

I can't seem to find much on this topic.

Thanks!

Clara Peller asked "Where's the beef?" A.T.A. asks, "Where's the fix?"

PPA purported to make pension plans safe for America, end all wars, and obliterate tooth decay.

A calendar year DB plan uses the preceding September segment rates, which for 1/1/2010 meant 5.03, 6.73, and 6.82. The liability held for A. Participant was $222,000. The Plan distributes lump sums based upon the segment rates as of the first day of the calendar quarter that precedes the calendar quarter of distribution. That's a mouthful but by example, the July 1, 2010 segment rates are used for a December 1, 2010 distribution. The July rates were 2.83, 4.66, and 5.26. Under these rates, a lump sum of $282,000 will be distributed, which is 27% greater than the amount reserved.

So what exactly has PPA fixed other than constructing an overly complicated basis for another undelivered political promise?

Can some explain the basics of the Utilization Standard test for C&B test of Cafeteria Plans (if the plan cannot utilize the Safe Harbor)? We are a TPA, and I don't know if I make this test more complicated that what it should be. I currently follow the guidelines laid out in the EBIA manual for Cafeteria Plans. Thanks!

I was curious to the thoughts of the members of this message board on placing a time limit on pursuing claims under a retirement plan document's claims procedures. For example, a limit requiring submission of a claim to the administrator within 24 months of the date the participant first became aware of facts supporting the claim or should have become aware of such facts through reasonable diligence. I thought I read somewhere that courts may become more supportive of such limits but can't find anything to support that.

A little discussion going on here internally - I'm taking a poll. Do you believe that QJSA requirements apply to a 1 person plan not otherwise subject to Title I of ERISA? Specifically, see Treasury regulation 1.401(a)-20, Q&A 3(d). Thanks.

We are working with a group of individuals who because of ownership % have three unrelated companies. Currently, one of the companies would be in an audit situation and the other two would not. If we put the companies onto a multiple employer plan, would all three companies need to be audited? I am thinking the answer would be yes...but would appreciate any thoughts.

An employee was termed in April 2009. Was entitled to a safe harbor contirbution for those 4 months. The employer always extends and makes the contribution in September 2010.

The employee takes a 100% distirbution of her account around Dec 2009.

She is rehired in June 2010. (did not know that)

The contirbution is made in September 2010 and John Hancocks system is set to distirbute in the same manner as the previous distribution if you do not let them know in 7 days (not sure of the time frame). The plan sponsor or TPA does not stop it and the money is distirbuted while she was employed (direct deposit to hert account on file with John Hancock).

What are the ramifications of the distirbution?

The instructions to the draft Form 8955-SSA specifically states "The 2009 plan year information cannot be combined with the 2010 plan year information and filied on the 2010 Form. You must use a different form for each year."

Before the draft was released we decided we would report any 2009 on 2010 form. I really dont see a problem with this and it will save us on having to mail paper copies of these as it is anticipated that these forms will be filed electronically for 2010, but that is even quite questionable.

Any opinions would be appreciated.

I just read a bulletin that said the IRS, in a Q and A session, has taken the position that forfeitures can not be used to reduce the employer's safe harbor non-elective contribution and also cannot be used to reduce the employer's qnec contribution to pass a failed ADP test.

Does that sound correct? Am I missing something?

I have a participant who died in 2005. He was born in 1932 and his wife in 1930. His remaining life expentancy (minus 1 year each year) is now less than the spouse's recalculated life expectancy. Can I switch over now to the Single LIfe Table to calculate the minimum she needs to take this year?

Thanks

From BenefitsLink Newsletters:

"No news items are available today, due to the peaceful death this morning of the mother of BenefitsLink Publisher David Baker."

Our prayers are with you and your family, Dave.

Non-PBGC DB Plan is overfunded for 2010, so no contribution will be made. Deduction limit for DC is 25% of covered comp, correct? Want to make sure I'm reading 404(a)(7) correctly.

What are people experiencing? Have a couple that are at 6 months now with no response.

We have a client with a large plan that needed to file their 5500 by 10/15. The audit wasn’t done so we advised the client to file anyway (in accordance with the DOL EFAST2 Q&A Q25). Currently the filing is listed as “Filing Error” with the DOL.

The audit is finally ready. Any suggests on the best way (cheapest?) to handle the new filing?

I’m assuming that the “correct” way is to simply amend the filing, attach the audit, and re-submit.

However, I’m thinking if we can simply submit under the DFVC, it may be the cheaper alternative.

Does anyone have any input on this? Can I even submit under DFVC if the client already submitted?

Have a client with a late 5500EZ? Realize there is no program for them to use apparently so what's the process. Just file and include a letter begging for reduced penalties?

Anyone using Relius 16.0 yet? Any comments?

Plan has a 8/31/10 year end valuation yearly, for the 2010 rmd which account balance would I use, the 8/31/09 or the most recent 8/31/10?

Thanks

Sadie Hawkins Day

When: Always on November 13

Here is a holiday that originated from a cartoon. It all began in Al Capp's "Lil Abner Cartoon in the 1930's. In the cartoon series, the mayor of Dogpatch was desperate to marry off his ugly daughter. So he created Sadie Hawkin's Day. On this day, a race is held and all the single men were given a short head start. If a woman catches her man, he had to marry her.

Sadie Hawkins Day races and events grew in popularity during the course of All Capp's long running cartoon. This holiday (largely popular because of the cartoon) died out after 40 years when the cartoon was discontinued. It can occasionally be seen celebrated on college campuses.

......................

for those married men: how much of a head start were you given?

I guess for the ladies: how much of a head start did you give him?