A one-person DB plan is contemplating investing 92% of its assets in a bond portfolio of high quality bonds that will mature in 2 to 10 years and will have an overall yield of a little over 2%. The participant is age 54 and the plan has a normal retirement age of 62. The plan benefit is 100% of the 415(b)(1)(B) compensation limit. The participant is contemplating this action as part of an overall balanced investment strategy in which the pension plan bears the conservative element. This will facilitate plan assets not exceeding the 415 limit.

Given that 430 discount rates would be expected to be much higher, is there any problem such as unreasonableness of deduction or violation of prudent man rule. Just want to ensure there are no woodpeckers in the wood pile.

If the Plan Administrator and Plan Sponsor are the same person do they need to sign twice on the Form 5500 for 2009? We've always had two signatures on the previous paper filings. It seems with the electronic filing, if one person is both Admin. and Sponsor than they only have to sign as Admin?

Thanks

A controlled group consists of a parent (Company A) and subsidiary organization (Company B). Each entity has its own 401(k) plan. Employees of Company A are eligible to participate only in the Company A Plan and employees of Company B are eligible to participate only in the Company B Plan. Company A Plan provides richer benefits than Company B Plan. Is it correct to count only Company A employees as eligible employees when running the ADP and ACP tests for the Company A Plan and only Company B employees as eligible employees when running the tests for the Company B Plan? In other words, assuming the two plans separately satisfy the minimum coverage test, is it correct to assume that exclusion of Company B employees from eligibility in the richer Company A Plan should not affect Company A Plan's ability to pass the ADP/ACP tests? In addition, is there any reason why these two plans might be considered one plan for testing purposes (i.e., mandatory aggregation)?

I hope this is a simple question. I am foggy on it for some reason.

Brand new plan. Signed and effective February 1, 2010. We know PPA amendments are due on the last day of the first plan year beginning on or after January 1, 2009. Plan year here is calendar year.

Even though it won't be a full plan year, is the PPA deadline the last day of the 2010 plan year or December 31, 2010?

Then, when are the 2010 amendments due?

Add to that, I'm filing for a DL. If I amend, won't I have to restate, and won't all this blow the client's head off?

Propose: file for DL. Then, stand alone amendment for PPA before 12/31/2010. Done.

My boss read somewhere that a regulation was passed this summer allowing Roth conversions within the plan. I cannot find anything regarding this. Is this still in the proposal phase and not officially passed? Does anyone have a link to information regarding this?

Thanks!

I have an employee who waived all health coverage at open enrollment in May. The employee married and had a baby in July and her spouse lost his job and medical coverage in August. The employee submitted a QE change form in September requesting enrollment of self, spouse and baby in medical and self and spouse in dental, and checked off all three QE reasons: birth, marriage, and termination of spouse employment.

The employee was outside of the 30-day window to allow enrollment due to a change in marital status or a change in the number of dependents, and barely met the deadline for termination of spouse employment. My question is since the employee previously waived all coverage and her spouse was the only family member who lost other coverage (medical only), can we allow the employee to enroll herself, her spouse and her baby in medical, and herself and her spouse in dental?

To anyone using RGF/Relius Web Client:

In RGF, on the 2009 Plan Information Worksheet, under Signers, Service Providers, & Interested Individuals, are you checking the boxes "Rank" or "Enable Web Client Workflow"?

In Relius general FAQs, there's a question dated 5/7/10 that says:

"the Rank or Enable Web Client Workflow fields should NOT be selected at this time".

I'm just wondering if this is still the relevant answer today...or if it matters if they're checked anymore?

Anyone know?

thanks!

For your viewing pleasure:

Proofreading is a dying

art, wouldn't you say?

Man Kills Self Before Shooting Wife and Daughter

>This one I caught in the Tribune the other day and called the Editorial

>Room and asked who wrote this. It took two or three readings before the

>editor realized that what he was reading was impossible!!! They put in a

> correction the next day.

--------------------------------------------------------------------------------

I just couldn't help but send this along. Too funny.

>Something Went Wrong in Jet Crash, Expert Says

> Really? Ya think?

>----------------------------------------------------------------------------

>

>Police Begin Campaign to Run Down Jaywalkers

> Now that's taking things a bit far!

>

> -----------------------------------------------------------

>Panda Mating Fails; Veterinarian Takes Over

> What a guy!

>---------------------------------------------------------------

>

>Miners Refuse to Work after Death

> No-good-for-nothing' lazy so-and-so's!

>------------------------------------------------------

>

>Juvenile Court to Try Shooting Defendant

>See if that works any better than a fair trial!

> ----------------------------------------------------------

>

>War Dims Hope for Peace

> I can see where it might have that effect!

> ----------------------------------------------------------------

>

> If Strike Isn't Settled Quickly, It May Last Awhile

> Ya think?!

>-----------------------------------------------------------------------

>

>Cold Wave Linked to Temperatures

> Who would have thought!

> ----------------------------------------------------------------

>

>Enfield ( London ) Couple Slain; Police Suspect Homicide

>They may be on to something!

>------------------------------------------------------------------------

>

>Red Tape Holds Up New Bridges

> You mean there's something stronger than duct tape?

> ----------------------------------------------------------

>

>Man Struck By Lightning: Faces Battery Charge

>He probably IS the battery charge!

>----------------------------------------------

>

>New Study of Obesity Looks for Larger Test Group

>Weren't they fat enough?!

>-----------------------------------------------

>

>Astronaut Takes Blame for Gas in Spacecraft

>That's what he gets for eating those beans!

> ---------------- ---------------------------------

>

>Kids Make Nutritious Snacks

> Do they taste like chicken?

>****************************************

>

> Local High School Dropouts Cut in Half

> Chainsaw Massacre all over again!

> ***************************************************

>

>Hospitals are Sued by 7 Foot Doctors

> Boy, are they tall!

> *******************************************

>

>And the winner is....

>Typhoon Rips Through Cemetery; Hundreds Dead

>

>Did I read that right?

I was just given the following situation from a broker:

An employer set up a SIMPLE-IRA in 2004. The plan utilizes the 3% match. This match was calculated each year by the company's accountant. Rather than computing the max match on 3% of compensation, he calculated it on 3% of the employee's salary deferrals. Therefore, he has undercontributed the match every year since inception. The only partially good news is that the only participants in the plan have been the owner, his wife and 1 employee.

What would you recommend to the client?

1. Determine the shortfall to the employee, adjusted for earnings, and just deposit it? - I don't like this solution

2. Determine the shortfall for employee and the owners, adjusted for earnings, and deposit it? - I don't like this either

3. Just forget about it and correct it going forward? - I don't like this solution either

4. Apply to one of the voluntary compliance programs for correction? - maybe a possibility, but, cost could be a consideration

Any other suggestions and/or comments on my possibilites above would be appreciated.

Thanks,

Rick

Assume a filer is a Cycle E filer that sponsors a 401(k) plan designed as a safe harbor 401(k) plan. If the document contains a provision that undercuts the safe harbor status - - - for example, a provision that provides a higher rate of match for HCEs than for NHCEs, or that only allows deferrals from an "unreasonable" definition of compensation - - - does that constitute a "disqualifying provision" under Code Section 401(b)? My assumption is that it does not, since the plan can still qualify by running and passing the ADP/ACP tests; its qualified status is not jeopardized per se.

Thanks.

Does anybody know - in California is the state disability calculated on total compenation or compensation less deferrals? In other words, when an employer has to calculate the payment to the state for disability for an employee, is that calculated after deferrals are withheld?

Thanks!

if the employer contributes the profit sharing contribution by the deadline for taking a a 2009 deduction (september 15) when must the contribution be allocated to participants. can it be allocated at a later date or should it be done immediately?

A plan's PBGC variable premium rate was determined using the "Standard Funding Target" for 2008 and 2009. May the plan adopt the "Alternate Funding Target" as it's variable premium determination basis starting in 2010 (for 2010-14)?

Am working with an independent sales person who worked primarily with one Company for over 30 years. Received commission income that was reported to him on Form 1099-Misc. Company established a NQDC for its independent sales force years ago. My client retired triggering the NQDC payments to him. Will be paid approx 250,000 a year for 5 years. He wants to establish a defined benefit plan to shelter most if not all of the income.

I think if he was an employee of the Company and retired this income would be not be considered 415 income. Because he is self employed anyone have an opinion on whether he could set up a db plan?

Thanks to all in advance.

Many of us senior citizens are well aware of the contention that Yogi Bear "was smarter than the average bear."

A number of questions arise: (1) How was the conclusion drawn? (2) Was a random sample of bears selected and tested? (3) How was Yogi able to break away from his heavy work schedule for meaningless testing? (4) Was his tester another bear? (5) Is the bear Catholic?

Does anyone find this entire exercise unbearable?

Can the "annuity starting date" ever change for purposes of 417(e) (e.g. if a participant changes the form of his benefits, or if a new benefit form is suddenly offered)? Thoughts? Thanks in advance!

Company is selling assets (only at one particular location) and contributes to a multiemployer plan. Seller is also subject to CBA with union. The seller will be subject to withdrawal liability as a result of the sale. What can we do to protect the purchaser from incurring any liability associated with the withdrawal? I understand that the seller is liable, but is there any extra steps that can be taken to protect the purchaser? Is there an argument of successor liability, and if so, what is the best way to protect against that type of claim?

Thank you.

Are participants assets in a SEP or SIMPLE shielded from claims from creditors? A participant in one of these plans (he's not sure which one he is in) has some major credit card problems and was told by the collection agency that they could go after his SEP/SIMPLE.

Thanks

We have a client that is an owner. He turned 70 1/2 in August 2010 - but requested an in-service withdrawal in April 2010 (before he was 70 1/2). He rolled over his entire account balance to an IRA. He is still contributing to the plan and also received a profit sharing contribution after the rollover. When we rolled the money to the IRA he was not 70 1/2 yet - should we had taken the RMD before the rollover to the IRA - or do you have to wait until they turn 70 1/2 to take it? He has enough money in his plan right now to take the RMD for 2010 (not delaying it until April 1, 2011).

The rollover company (IRA) is saying that when we e rolled over the money from his plan - we should have kept back the RMD amount

and that the money needs to be distributed before 12/15/2010 otherwise there will be penaltys. I dont think that is correct when he isnt in any violation - he is still taking his RMD before 12/31/2010 (based on 12/31/09 balance) - he is just using money after when the rollover happened. Does it matter what money he uses as long as he takes it before 12/31/2010? Thanks

Plan Sponsor is in Cycle C - as they have an individually designed plan. They filed Form 5300 by the 1/31/2009 deadline. They have not received a Determination Letter yet.

They just recently amended their plan for some minor revisions.

According to Rev. Proc. 2010-6, if they haven't rec'd a DL yet, they "must" send the discretionary amendment to the IRS and it may be included as part of the determination. Here is the wording:

In addition, the applicant must send the Service any amendments that are adopted and/or proposed after the date of the determination letter application and before the Service issues the determination letter. The applicant must submit a cover letter that references the date that the pending application was submitted, the identity of the employer and the plan, and any other helpful identifying information. The amendments must be attached to the letter. Send the cover letter and the attachments to: Internal Revenue Service, TE/GE Correspondence Unit, P.O. Box 2508, Room 4024, Cincinnati, Ohio 45201. Although all such amendments must be provided to the Service, it is possible that the determination letter may not provide reliance for all of these amendments. See, Rev. Proc. 2007-44 for the scope of the Service’s review with respect to a particular determination letter application.

Has anyone had experience with this? Is it common for a plan sponsor to send amendments to the IRS in this manner? Are there any repercussions of not sending the amendment - since it says the applicant "must" send them to the Service? I would have assumed the plan sponsor would just wait until their next cycle is due to include any new discretionary amendments.