I remember reading something once that provided guidelines of the employer's rights during a DOL or IRS audit. It specifically addressed who can be present during the audit, it is different for IRS than for DOL. Does anyone have a good resource for this information? thanks!

Client failed the ACP Test in 2009. Instructions were sent to make a corrective distribution of the money. Now it is 2011 and and the client has provided investment statements and the correction was not made. What are the consequences?

Thanks.

Quick question. I realize that the annual compensation limit is $245,000 and that the deferral limit is $16,500 plus another $5,500 for those who are catchup eligible. For an annual true up, an employee making $300,000 would who maxed out at $16,500 would have the match calculated on the basis of 16500/245000=6.73%. This 6.73% would be used with the matching formula to calculate the proper match.

My question is if this person was catchup eligible and deferred the total $22,000, would their match be calculated on the basis of 22000/245000=8.98% or is $16,500 a limit for calculating matches much like the $245,000 limit??

Thanks

Anyone use FT William for their plan admin software? I would appreciate any feedback.

Where there more than one top 25 HCE requests a lump sum, must the determination of 110% (or 1%) take into account the effect of the payment to the other HCE? Or is it permissible to evaluate both HCEs independently and disregard a lump sum distribution to another top 25 HCE?

A Cycle E filer is preparing a determination letter application for Jan. 31, 2011. In the course of preparing the application, it is discovered that plan was not timely amended for some interim amendments. The restated plan document will be amended to reflect the changes retroactive to their respective effective dates. Do you have to file a separate VCP submission to ensure yourself of the modest $375 compliance fee, or can you skip the separate VCP filing if you specifically identify the interim amendment non-amender failures in your determination letter application (i.e., in the transmittal letter)? Stated differently, if you don't undertake a separate VCP submission, are you at risk for Audit Cap treatment and a significantly greater compliance fee even though you have highlighted the non-amender failures in your determination letter application?

I know we needed to test the ACP on 403b plans, but do we now need to test for ADP

As I understand it, if someone has a missed opportunity to make a deferral, the Employer should make a QNEC of 50% of the missed deferral. Also, the full match should be made.

What does that mean?

Match formula is 50% of deferrals. If the missed deferral is $1,000, the ER will make a QNEC of $500. How much is the match? $500, which is 50% of the missed $1,000? Or just $250?

Sole Prop's owner formed an LLC and owns 100%. When the Sole Prop dissovles this year, all employees will work for the LLC. What happens to the plan?

We are looking for a way to check for the death of pensioners to avoid issuing pension checks to participants who have died and whose families had not notified the Fund of same.

Anyone have any suggestions for companies or services that we could utilize.

Thanks for any help!

Plan of 79 participants non-leveraged, individually designed ESOP has to be submitted prior to 1/31/11.

I have the following items ready for submission:

1) Form 5300 (App. for Determination)

2) Form 5309 (App. for Determination of ESOP)

3) Form 8821 (Tax Info Authorization)

4) Form 8717 (User Fee)

5) User fee to Treasury for $1000

6) Notice to Interested Parties

7) Plan doc. restated effective 1/1/02 and subsequent amendments and last determination letter

I feel I have everything I need. Does anyone see a glaring omission(s) ?

Thanks

I have an unforeseeable emergency that is due to my dad's medical expenses. He had to have open heart surgery last week. In order to get a distribution from my 457 plan, do the medical expenses have to be for me, my wife, or my child (a dependent)? The plan refers me to the 457 definition of an unforeseeable emergency.

What is consequence if employer switches to an off calendar year fiscal year, but maintains calendar year plan? I see deduction timeframe will change since employer tax return deadline is different and 415 deadline is changed.

Any other issues?

Thanks!!

We are a TPA and have been advised by our custodian who handles withholding and Form 1099-R reporting that an error in 2010 withholding can no longer be corrected since it's now 2011. I always thought this could be done by filing a Form 843, Claim for Refund and Request for Abatement and Form 941c, Supporting Statement to Correct Information. Then the excess 2010 withholding would be "refunded" in the form of a credit to the payor's account. But, maybe this is ancient history? The custodian says that at this time their Form 945 filing must match their total Form 1099-R filings and that "adjustments" are not allowed. Now I know the IRS can make rules that don't make sense but is that the case here? Mistakes happen and it doesn't seem right we cannot make the appropropriate corrections for the participant. Any ideas? Thanks in advance for your help.

A client of ours received a request to do a telephone survey with Abt SRBI on behalf of the IRS. Their plan had been audited and closed last year (no issues).

I have not heard about any outsourcing of survey work by the IRS to other firms - does this seem legitimate?

Thank you all for your help. I've decided to drink a vial of soldering acid rather than continue to deal with meaningless federal rules and regulations. The camel's back straw was when the IRS announced its new user fees. From ASPPA:

CAUTION: Beginning February 1, 2011, the IRS requires that a Courier 10 point font only is to be used when preparing an application[e.g., 5300].

Wonder what happens if you script, bold it, or type in all upper case?

We've had a long running argument in my firm in regards to the following:

Have a cross-tested plan, 8 groups, typical plain Jane crosstested. Allocations chosen per group and allocated pro-rata within the group

One year, a young person leaves and that totally changes the results of the cross-testing, so some in our office say, just run the allocation integrated, it can be tested on a contribution basis and as long as it passes which of course it would, you're fine.

Here's my argument and if someone can give me proof, I'd be forever gratefu or maybe I'm wrongl. Doesn't that integration level have to be in the adoption agreement, so wouldn't we have to have a plan amendment stating that the allocation is now being performed on an integrated basis??

On Form 5500-SF, Line 8, how do you report assets that have been reverted to the employer as part of a defined benefit plan termination? URGENT: 5500-SF due 1/18/2011

I understand that Line 13a will need to be answered "Yes" and the full amount of the reverted assets will need to be reported. Form 5330 has already been filed and the excise tax paid.

What I don't understand is how to report the reversion in Line 8 to wind up with zero ($0) assets at the end of the year and no error message. The instructions don't seem to address this issue, and 8j doesn't seem right since only 25% of the reverted assets were then contributed to a qualified replacement plan.

Say a small plan (two or three particiapnts) is terminating 12/31/2010.

The reality is that all active participants are going to receive an immediate lump sum equal to PVAB.

It seems the valuation should have an imediate decrement and turnover is 100% for that year and the assumed ret age (line 22 of SB) is essentially Not applicable due to plan termination.

How are others viewing this? Still using ARA of 62 (NRA in plan) for the SB? Other?

thanks

The majority of the 401(k) plans we administer have all of their assets invested with one of the major platform providers. They will be able to provide the investment disclosure information.

What about small 401(k) plans that allow each participant a brokerage account? Identifying the investment alternatives and the investment performance of each investment alternative would be impossible as there may be thousands and thousands of investment alternatives. Does anyone know if this has been addressed in the new disclosure requirements?