She owns. He works. I know family aggregation applies for controlled groups, but what about in the case of RMD's?

FACTS:

Plan offers J&S.

A beneficiary form is on file for X Participant and the beneficiary is a non-spouse beneficiary. Spouse consents to the non-spouse beneficiary.

If X Participant's vested balance exceeds $5,000 and X Participant requests an age 59 1/2 in-service withdrawal, must a waiver of annuity form be signed by the spouse considering the facts above? In other words, since the spouse already consented to X Participant's death benefit being paid to a non-spouse beneficiary, is a waiver of annuity form needed for a distribution taken by X participant while living?

Thank you.

The journey of a thousand miles begins with a single step. Its as true with saving money as with anything else.

These days, weve been frightened into thinking we must save thousands of pounds immediately. Most of us simply cannot do this, and the media does us no favors when it makes the situation sound so hopeless that we might as well give up.

Financial planning should be focusing on real people, people who have trouble saving, people who really need the help that instead seems geared towards the wealthy.

Thanks

LLC wants to give CEO phantom equity of 5% such that on 12/31 of each year the company would pay CEO a bonus equal to 5% of the total cash distributions made to actual equity members during the calendar year. Presumably the employee must be employed through the end of each year so I believe the payments are always subject to a SROF and therefore we could always qualify for the STD exception if we pay out within 60 days. Do you see anything that could cause a 409A problem?

Thanks.

I have a profit sharing plan, only, and needs to be cross-tested due to the group allocation of the contribution.

The plan is passing the ratio test, but failing avg benefits test. So, I am not passing 401(a)(4). Is there a way I can break the plan into component plans, and pass the avg benefits test and 401(a)(4)? Or, am I stuck because I am failing ABT, so I can not do the component plans?

In the past we've completed the 8109-B coupon and instructed the client to deposit the federal tax withholding check with the coupon and mail to the Financial Agent. We requested our client to hen return for 1099-R and 945 records a copy of the check written to the financial agent. Effective 12/31/09, we've been informed that paper submissions and 8109-B Coupons will no longer be accepted and the withholding must be filed electronically using EFTPS. I realize this is only a proposed reg at this time however feel it is important to educate my firm as well as our clients between now and then.

Do any of you have thoughts or suggestions on how we can educate and or communicate this new electronic filing to Clients? How can we assist out clients with this new process?

Information on EFTPS, including how to enroll, can be found at www.eftps.gov or by calling EFTPS Customer Service at 1-800-555-4477

Thanks

A 15 employee floor husband/wife contractor is looking to install a plan. Most of their employees are hispanic and only work when work is available. They are not necessarily terminated. He wants to set up a plan and doubts they will participate, but is there a way they can be excluded for plan purposes and still satisfy minimum coverage requirements? They were considering a Safe Harbor 401(k).

Terminated employee elected COBRA for herself and qualified for the ARRA subsidy. She did not choose to cover her child at that time. Now, it is open enrollment and she wants to cover the child. The COBRA participant is still entitled to the ARRA subsidy, but what about the child that she now wants to cover?

Thanks.

Client is majority owner/employee of business. He is planning to retire soon and would like to begin making gifts of his business interest to family members. It has been suggested that he lower the value of the business (and thus lower the value of his planned gifts) by adding a NQDC Plan and/or severance agreement for his benefit before he retires.

Any problems with this plan from a 409A perspective?

WRERA provided relief for the 436 benefit accrual freeze if a calendar year plan's AFTAP was above 60% for 2008 but below 60% for the 2009 AFTAP and this was extended by the funding relief that was issued this June to apply for 2010 as well.

Does this still apply if the AFTAP is deemed to be below 60% because it was not certified by 9/30/10 or does the late certification result in benefit accruals being frozen anyway?

Facts: 69 year old owner of an IRA

44 year old is sole beneficiary.

HOW DOES THE IRA OWNER ASSURE THAT THE BENEFICIARY TAKE WITHDRAWALS BASED ON LIFE EXPECTANCY?

A hypothetical employer is content to use its recordkeeper’s “pre-approved” prototype plan with one revision: The employer adds a provision mandating that, in addition to other investment alternatives that the plan administrator selects in its discretion, each of six mutual funds (specified by name) is a designated investment alternative that no plan fiduciary has power to remove (except to the extent that ERISA § 404(a)(1) requires the fiduciary to disobey the plan’s terms).

The employer wonders whether this one revision, which doesn’t seem to affect any § 401(a) qualification requirement, results in losing reliance on the prototype’s opinion letter.

Revenue Procedure 2005-16 includes the following provisions:

[19.02] Nonstandardized M&P Plans and Volume Submitter Plans — An employer adopting a nonstandardized M&P … plan may rely on that plan’s opinion … letter as described below if the employer’s plan is identical to an approved M&P … plan with a currently valid favorable opinion letter, the employer has chosen only options permitted under the terms of the approved plan, and the employer has followed the terms of the plan. Also see section 19.03(3) below. These employers can forego filing Form 5307 and rely on the plan’s favorable opinion … letter with respect to the qualification requirements, except as provided in [other conditions not relevant to this query].

[19.03(3)] An adopting employer can rely on an opinion … letter only if the requirements of this section 19 are met, and the employer’s plan is identical to an approved M&P … plan with a currently valid favorable opinion … letter; that is, the employer has not added any terms to the approved M&P … plan and has not modified or deleted any terms of the plan other than choosing options permitted under the plan or, in the case of an M&P plan, amended the document as permitted under section … 5.09[.]

[5.09] Adopting Employer Modification of Trust or Custodial Account Document — An employer that adopts a nonstandardized M&P plan will not be considered to have an individually designed plan merely because the employer amends administrative provisions of the trust or custodial account document (such as provisions relating to investments and the duties of trustees), provided the amended provisions are not in conflict with any other provision of the plan and do not cause the plan to fail to qualify under § 401(a). For this purpose, an amendment includes modification of the language of the trust or custodial account document and the addition of overriding language.

What do the experts think, may the employer still rely on the prototype’s opinion letter? Or should the employer submit Form 5307?

A large plan money purchase pension plan was merged into a new 401k profit sharing plan. There will of course be an audit report for the profit sharing plan, but does there need to be a final audit report for the terminated and merged money purchase plan? The mppp was merged in March of 2010.

An accounting firm has advised a client whose plan count has dropped below 100 that the audit needs to continue nonetheless. Barring any circumstances other than simply the participant count, does anyone know if that is true?

I have a client who allocates an employer contribution based on base pay only, and excludes all bonuses and overtime. They fail the 414 S test, so I can run the 401(a)(4) test, correct?

Am I correct in saying that in order to pass the 1/3 Gateway, I would be using total (415) compensation? If that is the case, what compensation is used for the 401(a)(4) test - the 415 compensation or the plan definiton of compensation?

It is my understanding that employee contributions have to be "held in trust" for a self funded plan (even though the plan is funded through general assets of company). What exactly is the held in trust requirement? Is it a special bank account or is it more that it has to be segregated from other employer funds? If employee contributions are held in trust does this trust then require an audit for the 5500?

thanks

is anyone seeing processing stopped statuses flip over to Filing Received? We have a lot coming back in the last day or two (even after adjusting for higher volume) as processing stopped, but nothing obvious is jumping out at us as a cause.

Is there legal authority that permits an employer to charge highly compensated individuals a higher premium than nonhighly compensated individuals? For example, $500 premium for employees with incomes $50k-$100k, $1000 for employees with incomes $100k-$150k, and $2000 for employees with income $150k +. Is this set up simply a reasonable classification under 105(h)?

with an end of the year valuation(year x), when

using the results to compute the following year's(x+1) aftap

is the fact that contributions were late for year x immaterial

for the year x+1 aftap?? in other words, the effect of late interest

impacts year x funding but does not impact 436 in year x+1?

Does the remedial amendment period for 403(b) plans that's discussed in Notice 2009-89 cover late amendments to bring a plan document into compliance with new law changes that require an amendment (i.e., the equivalent of a missed 401(k) interim amendment to a 401(k) plan)?

For example, if a plan is being maintained pursuant to a written document signed in early 2008 to comply with the final regulations, could that plan be amended after the deadline to adopt an interim amendment for a new law change so long as the amendment is just intended to correct the form of the plan and the plan operationally complied with that law change?

Or, is this the type of circumstance that should be corrected with a VCP Appendix F submission? Anyone tried this?

Would appreciate feedback on this issue.