Does anyone have an opinion on if the Plan Sponsor needs to keep the original signed promissory note (paper copy) or is an electronic copy sufficient?

Thanks All!

For a defined benefit plan, the definition of actuarial equivalence is:

Pre-retirement interest: 6%

Pre-retirement mortality: None

Post-retirement interest: 6%

Post-retirement mortality: 94 GAR, proj to 2002.

In calculating a lump sum distribution under IRC 417(e), do you use pre-retirement mortality or post-retirement only?

Has any guidance on this issue been published?

Previously, in the old SAR days, we would include a statement on the SAR explaining that the employer missed a quarterly contribution and provide them with all of the required information. Since the SAR was done with the 5500 for the year in question, most people considered this timely notification.

Now that AFN's are due 4 months after the first day of the year, before the employer may have completed the required deposits, do you think it would be ok to wait until the following AFN to report the late quarterlies?

For example, can I report missed quarterlies for 2009 on the 2010 AFN which is distributed in April of 2011 or would the client need to do a stand alone notice? If you think it needs to be a stand alone notice, when would you send it?

Can you use QNEC's to satisfy gateway requirements assuming the QNEC is not needed to pass a(4)?

I am just looking for some input on a problem I have. I took over a DB plan in 2007 and I have completed the 2007, 2008, and 2009 valuations, etc. The plan is a small plan with 8 participants and it's covered by the PBGC. The plan has been terminated as of 12/31/09. The plan sposnor is the client of the TPA that engaged me as the EA.

This week I was advised that there was an additional terminated vested participant that we were not aware of. The participant terminated in 2004 with a $100/mo AB payable at age 65. The participant is now age 35. Obviously everything that has been done is technically incorrect. I want to do the right thing but I do not want to needlessly have the plan spsonsor incurring fees. If I look back through the actuarial valuations, if I were to amend the valautions there would be no meaningful effect on the plan compared to what actually happened. In 2007 the sposnor contributed $15,000 more than required so maybe that credit balance would be lower by a couple of thousand at most. They never used that credit balance and and they had a $0 requirement in 2008 and 2009, and that would not have changed if the missed participant were included in those valuations. I just don't know if it's necessary to amend the vals and 5500 filings? The PBGC filings are off and those should probably be amended I feel. The Form EA-S is being amended. The plan has significant excess assets.

What would you do?

Thanks.

I hope someone can assist with the questions below. We are trying to anticipate the issues that will arise with clients that wait until October 15 to file and do not have the financial statements available. Please post if anyone has had experience with two scenarios described:

Scenario 1:

The 2009 Form 5500 is required to attach the report of the IQPA, but the report will not be attached to the electronic filing that is submitted with the Form 5500 to the DOL. Part III of the Schedule H is not completed. The filing will be accepted by the DOL as a timely filed return, but the filing should be amended ASAP. This is consistent with FAQ25. Per the EFAST2 helpdesk the filing status most likely will be the status “Filing Error”, but they are not sure.

Which filing status will be received - Filing Stopped, Filing Error or Filing Received (all indicate that the return is timely filed; the first two indicate an amended returns is required)

Scenario 2:

The 2009 Form 5500 is required to attach the report of the IQPA, but the report will not be attached to the electronic filing that is submitted with the Form 5500 to the DOL. Part III of the Schedule H is completed. The EFAST2 helpdesk does not know whether or not this filing will get Filing Unprocessable (not timely filed) or Filing Error/Filing Stopped.

Which filing status will be received - Filing Unprocessable, Filing Stopped, Filing Error or Filing Received? Filing Unprocesssable indicates the return is not timely filed; so we move into a DFVC filing instead of amended return filing.

Thanks.

ok - in the our new world of EFAST2 can others tell me what they do for this situation...

I have a JHancock plan with redemption fees. We report these on the Sch A. The report does not give me the street address, city, state or zip for the Fund Company.

The Sch A does not validate without that info. What do others do or can someone point me to where I could find a valid address for a Fund Company?

In this instance it is Vanguard Group Inc but I know there are bound to be more.

Thanks in advance.

We have a client that has two participants who had distributions paid in 2009 with incorrect vesting calculations.

The correct vesting was calculated and paid to these participants in 2010.

The client wants to know if they now need to answer question 4L on the Schedule H ‘Has the plan failed to provide any benefit when due under the plan’ as a ‘Yes.’

Any help would be greatly appreciated!

The owner was taking his rmd in the form of a 100% J&S in 2009.

In October of 2009, he terminated his employment and elected to take a lump sum distribution. He had already taken out his 2009 RMD. Unfortunately, the plan was unable to pay him out because of the 1.401(a)-5(b)(3) restriction.

In November of 2009, he passed.

For 2010, the plan now has enough assets that no restrictions are in place. What are the plan's options?

The plan at hand credits prior service with a predecessor employer. Employee is hired by successor employer and has his years of service credited for eligibility and vesting. So far so good. But how do the entry dates apply? Are they credited/waived if employee would have met such date, or does the employee have to be held out until next entry date which is not unitl January 1?

Thanks!

An employer has a basic match safe harbor 401k plan that provides the basic match to all employees, including HCEs.

The two owners want to maximize their deduction for their 401k and db plans.

they are not covered by PBGC so if their DB contribution is greater than 25% of payroll their DC deduction limit is 6% covered pay.

In order to avoid exceeding 6% to 401k plan the owners can waive their 401k match.

I didn't come across anything specifically allowing this, but is it ok?

Thanks.

Employer due to payroll glitch missed withholding deferral contributions for a couple employees. So we know how to self correction which per EPCRS is to contribution 50% of the missed deferral election - they participants had a deferral election in place. However when this contribution is submitted to the plan, is it a QNEC or is it a deferral contribution?

Thanks!

Employer provides company car but then employee incurs an imputed income tax on use of this car. How does imputed type income affect plan contributions? Employer wishes to exclude this type of income from plan compensation. Since the employee does not receive this as cash there is no tax withholding so if plan uses the IRC 3401(a) tax withholding definition as 414(s) comp will the imputed income be a non-issue? If not, plan will need to specifically exclude, and then do comp ratio test if necessary.

Are there any CPA's out there who may know?

Thanks!

I assume you'd agree that an order to pay a child support arrearage to a division of the court would qualify as a QDRO even though payment under the order is to be made to the court division rather than directly to the alternate payee.

A controlled group is going to become adopting employers of a MEP. Can each member of the controlled group provide a different vesting schedule? I know about testing for nondiscrimination in the aggregate for the controlled group, but is vesting a BRF to be tested or some other prohibition for the different vesting schedules?

Client paid too much match (based on match formula) to a few participants. Do you perform ACP testing before or after you make an adjustment for the over-deposit of the match?

If a plan design offers both a safe harbor nonelective contribution and a profit sharing contribution, are both (either or) contribuitons counted when determing if an employee is benefitting under the disaggregated non 401k non 401m coverage test? Logic would tell me no - the safe harbor eligibility is tied to deferral and has no allocation requirements. The profit sharing has a 1,000 hour last day rule. However, the ERISA Outline Book seems to indicate that any nonelective contribution received (including SH nonelective) can be used to satisfy this coverage test.

For example, if employee A received the SH contribution but not the profit sharing due to terminating during the year, this employee would deem to benefitting under the disaggregated "employer" coverage test. Is this correct?

If a participant has a 5% deferral election in place from the beginning of the year and exceeds the $245,000 comp limit in July (meaning they only deferred $12,250 up to that point) am I correct in concluding that 401(a)(17) would say that they cannot do anything to reach the $16,500 limit after that point?

401(k) plan is in Cycle D. They filed Form 5300 to the IRS (application for a determination letter) by the 1-31-2010 deadline.

They just realized that they answered some questions incorrectly on the Form. Should they:

a) Wait for the IRS to send them a letter and then correct the Form?

b) Revise the Form and send a new Form 5300 to the IRS with a cover letter explaining the situation?

Does the s/h definition allow a hardship is you are not the owner of the home? If you are living with your mother and it's your principal residence, can you take a hardship to prevent her foreclosure?