Does anyone know whether an amended Summary Annual Report must be distributed to participants if an amended Form 5500 is filed? Could not find anything addressing this issue in the DOL regulations or the ERISA Outline Book.

Top 25 HCE died and benefit is equal to LS value of accrued. My understanding is that spouse can only get the monthly LA that would have been paid to the participant. Or spouse can defer payment until participant is no longer in the Top 25 or until the plan terminates with enough assets to pay all benefits. But spouse cannot defer beyond 12/31 of the CY when the participant would have attained 70-1/2 (per plan document).

Spouse is older than the participant so installments would probably extend beyond spouses life expectancy.

Is my understanding correct? Are there other rules I may be missing?

Have been asked by self-funded church plan (so exempt from ERISA AND state law) whether it must comply with TAA of 2002.

I'm crunching through the TA Act and the Public Health Service Act to figure it out.

Often, federal requirements (i.e. HIPAA) attached, if at all, to church plans through the PHSA.

I'll figure this out eventually but thought I'd throw this out in case someone happens to know.

Thanks.

I am helping a small employer with DVCP and EPCRS correction programs after realizing that no 5500s were submitted, and prototype plan was never updated since 2002 (they *did* manage to get a good-faith EGTRRA amendment done in 2002).

Now it comes to light that, although ADP testing is required, it hasn't been performed.

All of the correction guidance refers to late corrections/contributions in connection with testing, but not to just missing testing all together.

I have advised client that testing is a core qualification requirement, and that testing back to 2002 needs to be performed now. If plan would have failed for any year, proper correction needs to be made now.

Then at least we have records to show tests were run, if ever requested, and we get the plan into true compliance.

My thought it, if plan would have passed for all years, we note in the EPCRS submission that it passed for all years (no details).

I expect client to think that this is a lot of work, but I've advised that terminating the plan (i.e. to avoid the work) is also not a solution, as terminating plans must be compliant.

Now that they have their TPA issue sorted out (years ago, a co. employee failed to pay the TPA's bill. TPA then 'resigned', but that employee didn't mention it, and left the co. TPA still answered questions, and even sent forms and assisted recordkeeper when regularly contacted by client, so client was surprised to learn, recently, that TPA wasn't 'really' their TPA, but rather sort of performing pro-bono type help here and there.

Anyway, does my advice to client on need to run prior testing seem right? I can't see any other option, but it's helpful to have a reality check, and/or to know if anyone else out there has ever seen a plan miss testing all together for several years...?

If you have submitted a VCP application in recent weeks and have not received your acknowledgment of receipt letter back (2008-50 Appendix E) this does not mean that it has been lost. The IRS has changed computer platforms (at least w/respect to VCP processing) and due to the change is not yet able to generate the VCP case numbers they stamp on the receipt letter before sending out. A VCP coordinator told me it may be a few more weeks before I get a receipt for an application I submitted on 6/29/10.

Just FYI.

The 2010 Schedule SB instructions for Line 11(d) read as follows:

"Enter the amount of the excess contributions for the prior year (with interest) that the plan sponsor elected to use to increase the prefunding balance. This amount cannot be greater than the amount reported on line 11c."

What is your read of the "(with interest)" piece of these instructions?

Does that mean that I have a signed election from the client with one number, but I will enter a different number (that elected number adjusted presumably with the prior year's effective rate) on line 11(d) column (b), or something else?

Joseph Carolan

One of my plans was not timely amended for 415 regs or PPA. I prepared an amendment that covered both of these. It was signed 2/16/10. (EGTRRA Restatement was signed timely).

I submitted to IRS using streamlined VCP with Appendix F Schedule 1 and check the box for "Final regs under 415" and check the "other" box and write in PPA.

The IRS tells me with regards to the 415 amendment - I need to submit Appendix F, Schedule 2 because "the amendment was signed outside of the remedial amendment period of 1/31/10."

For all I know she is correct but I can't for the life of me figure this out. DOes nayone know if this is a rule and if so where it comes from?

One person plan. Banc of America registered them with an incorrect ein and as a partnership when they opened the account over 10 years ago.

IRS doesn't recognize the incorrect ein so they require withholding. Withholding is reported by NFS under an omnibus account.

We have corrected the ein issue, and are close to being correctly classified as a retirement trust. Now we need the withholding back.

We tell NFS to do a 941-C to get the withholding back, since the money was sent under their filing/ein. NFS won't do this. They think we need to send a letter to IRS with the 1099's. But IRS doesn't recognize the ein when I call, hence the required withholding.

Any idea of how to get a return of withholding?

ugust 27, 2009; the actual deposit was made on 9/15/2009. The interest of $3.00 will be paid August 15 2010. What should be entered as "amount involved in prohibited transaction" in schedule C? I'm thinkiing that only the $3 interest is the "amount involved..." which results in an "initial tax on prohibited transaction" of $0. If this is correct, should we file the 5330 anyhow? Because of client's fiscal year, the 56330 was due May 2010 so now it's late. Do I need to do anything extra about that?

I have a Profit Sharing Plan where each individual participant has an annuity contract , and each participant self direct the subaccounts within their annuity.

The owner is contemplating adopting a defined benefit plan for his business, and he would like to dump the DB contributions into the annuity for his benefit in the profit sharing plan.

I believe that it is possible to commingle DB and DC assets, as long as the recordkeeping is clear (contributions, expenses, earnings, etc can be properly allocated to the correct plan). But this just sounds wrong to me.

Is it at least a prohibited transaction? Self dealing, perhaps? If having by larger asset base in the annuity, the owner could have some kind of unfair advantage over the employees?

Anyone care to share their thoughts?

We took over administration of a plan in 2002. I recently found out that the plan has an insurance policy. The policy was taken out in 1991. There was no mention of the insurance policy when we took over the plan. History of the plan prior to 2002 is sketchy. The company would like to correct and file under the DFVC program. I'm just not sure how to help them without knowing at what point the insurance policy was not included in the assets. Any suggestions on how to help them or where to start?

An employee worked only 2.5 months out of the year and then terminated. She got paid for about 500 hours of actual services rendered, so normally would not be eligible for a profit sharing contribution. However, she also got paid out for approximately 510 hours of accumulated sick, leave, vacation, etc. time leaving her with slightly over 1,000 hours in the plan year. For purposes of the 1,000 hour allocation requirement should all of these 510 hours count in the year of termination? Do you count the hours for the time period in which you are paid for them? Or could you argue that most, if not all, of them were accrued in past years?

Hi,

Client is on 12/31 year. Two different opinions offered by TPA. Which is correct? Thanks for your help.

My client has TPA and the plan is a profit sharing plan that has a 401k component. The client has had no participating employees in the past and maxed out contributions in past years on the profit sharing contribution and has never contributed via 401k portion.

Client must now cover employees for 2010. Current TPA states the following:

We cannot amend to a safe harbor 401(k) plan for 2010 because Notices have to be given 30 days prior to beginning of plan year. So even if client could defer $16,500 in 2010, the ADP non-discrimination testing would fail and he would likely get most of it refunded. So for 2010, the best plan would be to amend to an integrated formula (which is what this allocation is) and amend to a safe harbor for 2011. Both amendments could be done together by 11/1/10.

A different TPA states the following:

If the client has not used the salary deferrals this year or in the past the plan can be safe harbored for 2010

1. Client and his wife who is employed would defer $16,500

2. All rank and file employees would receive an allocation of the 3% Safe Harbor; Client and his wife would not share in the 3% Safe Harbor Allocation (we need to keep Mrs. out of the 401(a)(4) test)

3. For the Employer Profit Sharing, client would receive the maximum allocation, 2% to rank and file employees and 3% to employees (due to their youth) who worked under 1,000 hours.

4. The amended Plan would say that anyone employed as of 1/1/10 would be eligible for all sources.

The instructions for the 5500 EZ for 2009 state the following:

One-participant plans that covered 100 or more

participants at the beginning of the plan year are not

eligible to file Form 5500-SF, and must file Form

5500-EZ.

hmmmmmm.

I guess this rule must apply to those plans which covered over 100 participants but who are only partners (and spouses).

guess there would be no audit either.

Just how many plans are out there like that?

Does a plan that was certified to be in critical status last year but which made a WRERA election considered to remain in critical status until the actuary certifies otherwise? Sec 432 indicates that plan emerges from critical status when actuary certifies (essentially) otherwise.

Hi Friends,

I was googling online to find a forum like this to meet retirement plan professionals like you guys and found this forum. I am looking for a used text book for DC-3 by Ilene Ferenczy. Does anyone have a book for sale? I am not sure if I am allowed to post a question like this. Thank you.

Under COBRA's definition of a qualifying event, what constitutes a "termination" for a plan participant who is self-employed, a sole proprietor, or simply an owner or employer who also participates in a plan as an individual?

In other words, I'm trying to determine how and when an owner or individual employer "terminates" themselves such that it constitutes a qualifying event. I realize it's something of an absurd situation -- i.e. an owner-operator could then have to issue him or herself a COBRA notice. But it occur, for instance, in a situation in which a small employer who is incorporated has to lay off all his or her employees, including themselves.

Thanks

I've obtained my EFAST2 credentials from the DOL website and have filed 2009 returns as "Filing Signer, Transmitter" at Company A. I will be leaving Company A within two weeks. Can I change my user information (email, company name & address) on the DOL website and take my EFAST2 credentials to Company B? Or will I have to file for new credentials?

I have a question on completing the IRS Form 5310 for a terminating DB plan that was previously frozen.

Lines 13 and 14 of the 5310 ask for information regarding coverage and nondiscrimination for the year of termination. Line 13 states that you need to complete only line 13p if the plan satisfied coverage using the requirement of 1.410(b)-2(b)(6) (no HCEs benefit). The 5310 also states that if line 13p is completed, skip line 14.

For this plan, no HCE is treated as benefiting under the plan for the year of termination due to the plan freeze. Is there any reason I can’t just complete line 13p of the 5310 on the basis that no HCEs benefit and skip the rest of line 13 and all of 14? It seems to me that I can complete the form this way, but others I’ve spoke to disagree.

All thoughts and/or comments are appreciated. Thanks.

You'll never believe this one. Just got a letter from the IRS stating that my Schedule B was not signed and dated therefore was rejected. This was on a plan submitted 3 WEEKS AGO. They already sent a letter. Here's the kicker, my Schedule B was signed and dated. So, don't know whether the warning we receive through Web Client (Relius), that we get everytime regarding signatures and dating are causing these letters to be generated, or, if this letter is actually referring to another issue and the letter is wrong.

Anybody seen this yet??