ASPPA ASA indicated:

In reviewing IRS announcements regarding who will need to obtain a PTIN, I do not note where 5500s are mentioned. If I have overlooked the obvious, would appreciate someone pointing out where. The 5500 is an information, and not a tax return.

Client had had a SIMPLE with on mutual fund company for several years using the fund company's SIMPLE plan document.

THey now want to enable participants to put their funds into other financial institutions of their choosing.

Is this allowed ?

What plan document swill they need ?

THank you.

Last week I searched the forums and found an answer to this question, but now I can't find that thread again. Here are the facts. I have a 401k plan with a PYE of 9/30. I am trying to determine if the plan is Top Heavy for 9/30/2010. I have one person who is an officer and during the PYE 9/30/2009 she earned 151,000. During PYE 9/30/2008 she earned well below any limit at 85,000.

When I generate a TH report at 9/30/2009 out of Relius Administration, the system identifies this officer as a Key EE because her compensation is in excess of the calendar year 2008 limit of 150,000. My research seems to indicate that the compensation for determination of TH status for the officer is for the "calendar year in which the plan year ends". This comes from Treasury Regulation 1.416-1 T-14Q. Relius, however, is using "logic" in their system that uses the limit in effect at the beginning of the plan year and they are extremely insistent that this is correct.

My bottom line question is this. To determine TH status for 9/30/2010, do I look at the officer's compensation in 9/30/2009? If so, what limit is used?

Thank you

Plan has 4 former participants (no longer employed) and one owner at 12/31/2008. The former participants are paid out in early 2009, leaving only the owner.

For 2009 does this plan qualify as a " One participant Plan" and allowed to file 5500 EZ for 2009?

If so, and it has less than $250 k in assets is it exempt from filing the EZ?

I've been trying to explain that while no 5500 needs to be filed for the cafeteria plan, there should be 5500s filed for the welfare benefit plans. Is it possible that there is no underlying plans because the insurance company handles everything? When I ask for plan documents I only get things that relate to the cafeteria plan.

Hi - I'm somewhat new to the 403b world and had some questions put to me by a broker. I'm not sure how to respond. A local municipality is looking to start up a retirement plan - they currently have a SIMPLE. It will cover school EE's and other municipal EE's. They want to make a 3-5% contribution to the employee's.

Some questions:

1) can they offer a 401k or are they limited to a 403b?

2) Since it is a government agency must the 403b be a non-ERISA plan or can it be an ERISA 403b?

3) If they can offer both 401k or 403b, what would be the advantage of either?

Thank you for any insights you can provide!

That's 100110 in binary.

We have 2 companies A and B, in similar line of business where A owns part of B, but they are not a controlled group. Employees often transfer between companies. Situation we have is employee terminates with A and transfers/is hired by B. Lets assume employee met eligibility in plan A and had been particiipating for years. Plan B credits service with Employer A under the predecessor service provisions. Plan B has one year of service with semi-annual entry dates. Employee is hired on August 5th and has his service credited by Plan B. So when does emplloyee enter plan B? On August 5 or next January 1?

Thanks

I'm re-posting under 403(b) plans since there was no response in the 5500 section...

An employer has a basic deferral-only plan that meets the safe harbor for not filing a return under DOL Reg 29 CFR 2510.3-2(f). For unknown reasons, they adopted a resolution in 2008 that said "the plan is covered by ERISA." (Don't have a copy of that.) Do you think that, in itself, does make the plan subject to 5500 reporting? The safe harbor describes how a plan is generally subject to Title I but if specific requirements are met, is not subject to the reporting requirements of Title I. Just saying it is doesn't necessarily make it so, IMO.

I suspect they were trying to say that there is a written document, maybe? Is there a reason that I don't know of to go out of your way to adopt a resolution saying a plan is subject "to ERISA?"

Making it weirder is the fact that someone convinced them they should file a return, and someone filed an extension - on August 6. It was rejected. They're he**-bent on filing and paying the late filing penalty, in part because a sister organization has filed under similar circumstances, and the controller has ties to both and assumes they have to do the same thing. I think they don't have enough to do.

Has anyone ever heard of any enforcement initiatives, etc. regarding the PPA requirement that plans disclose the existence of social security integration on the quarterly participant statements? I imagine people must have gone through DOL audits where these disclosures have at least come up.

Is anyone using the "Attachment to 2009 Form 5500 SF Line 10a - Schedule of Delinquent Participant Contributions"?

1) If so, why or why not?

2) Is this information the DOL can access electroncially or does a person need to open a pdf file and look at it? For example, will including this form make less likely that the DOL might send a letter inquiring regarding whether or not the late depoit was corrected?

Generally, I prefer to do less work unless there is a compelling reason to do more work. Is there a reason to do this?

I need to amend a 2008 Schedule SB. Item 12 indicated the plan sponsor voluntarily waived their entire carryover balance, leaving $0 as the total beginning of year carryover balance in item 13. Actually, this amount was suppose to show in item 13 and $0 should have been in item 12 as the amount volunatily waived (the two entries got flipped flopped).

No waiver of carryover balance is consistent wtih the plan sponsor's election.

Any concern with submitting an amended 2008 Sch SB to correct this error?

Thanks.

Instead of starting a new Safe Harbor plan effective 10-1-10, the employer has elected to start a profit sharing plan effective 1-1-10 so that they can make a profit sharing contribution based on full-year compensation.

For a calendar-year plan, I know that a SH plan must be effective no later than 10-1. Is this for SH only. . or any 401k feature? If it were just to be a normal 401k plan w/ a profit sharing feature - could this still be effective 1-1-10? Or is the only way the Plan can be effective 1-1-10 is if it is profit sharing only?

Has anyone examined the issue of whether church plans are required to provide an actuarial increase to participants who work past normal retirement? See 411©(3) and 1.411©-1(e). Obviously, Section 411 doesn't apply to church plans. However, they are subject to the ADEA, which incorporates a number of the Regulations issued under Section 411.

Given the following scenario...

Cash Balance plan using separate allocation groups & a Floor Offset Arrangement

401(k) New Comparability Profit Sharing Plan

Groups: Owners & All Others

CB Allocation: Owners 60% of Pay, All Others 3% of Pay

Profit Sharing: Owners: 0% of Pay, All Others 6.5% of Pay

No allocation or Floor Offset Safe Harbors are employed

Both plans are aggregated for coverage and non-discrimination testing which passes using general testing (assume it passes at the razor's edge).

Is it allowable to use aggregated testing in such a Floor Offset arrangement? In essense you are testing the employees as if they are recieving 9.5% when in reality all they can receive is 6.5%.

Is it specifically allowed or specifically disallowed? Or is it gray?

A new plan is implemented 1/1/2010.

Say it bases benefits of 0.5% per year based on years of participation.

This would mean that no one has an accrued benefit at 1/1/2010.

The PBGC determines participant count as of 1/1/10 for a new plan and only participants with benefit liabilities are counted.

So it appears to me that the pbgc could take the position that the plan has no non owner participants benefitting and is thus not covered by the pbgc. Of course the plan on that basis would be covered in year 2.

Does the above seem accurate?

This has implications:

if the plan is not covered in 2010 would it follow that the company's profit sharing plan is subject to the 6% limit instead of 25% limit? Even though the plan will be covered by year 2.

Of course we can have (and may take this approach) a non owner participant have their pension be based on years of service and have an accd ben at 1/1/10 and thus be counted.

By the way the PBGC already said plan was not covered due to no non owner participants, though I am not sure where they came up with that as they don't even know the plan formula, etc. Employer of course wants coverage as they want to contribute above 6% to PS plan and make large (over 25% payroll) contribution to db plan.

Curious to hear views.

thanks

Our client offers an onsite medical clinic for its employees providing non-significant services (e.g., band-aides, temperature check, etc.). Should the value of the service be imputed as income for the employees making use of the clinic? If not, under what tax code section are these services excluded -- Section 106 (employer coverage)? Section 132 (fringe benefit)? Has the IRS put out any guidance on this topic? Thanks in advance.

Maybe this should be under 403(b)s to get the right eyeballs, but here it is. An employer has a basic deferral-only plan that meets the safe harbor for not filing a return under DOL Reg 29 CFR 2510.3-2(f). For unknown reasons, they adopted a resolution in 2008 that said "the plan is covered by ERISA." (Don't have a copy of that.) Do you think that, in itself, does make the plan subject to 5500 reporting? The safe harbor describes how a plan is generally subject to Title I but if specific requirements are met, is not subject to the reporting requirements of Title I. Just saying it is doesn't necessarily make it so, IMO.

I suspect they were trying to say that there is a written document, maybe? Is there a reason that I don't know of to go out of your way to adopt a resolution saying a plan is subject "to ERISA?"

Making it weirder is the fact that someone convinced them they should file a return, and someone filed an extension - on August 6. It was rejected. They're he**-bent on filing and paying the late filing penalty, in part because a sister organization has filed under similar circumstances, and the controller has ties to both and assumes they have to do the same thing. I think they don't have enough to do.

A large plan (100+ participants) needs an audit and gets the bill from the accountant. Can these costs be passed onto the participants and deducted directly from their accounts?

Thanks

Hi everyone!

Can anyone chime in on Relius WebClient errors; specifically a P-215 error regarding termination criteria? We had a welfare benefit plan (with only 5500 and schedule A attachments) receive this error.

Do you know what they are looking for? Is this a glitch not yet fixed?

Thanks for any input or hunches you can provide!

Vicki