A recent 5310 filing for a DB plan (plan adopted effective October 1, 2003) came back with a request for a check for $1,000. The plan is and always has been on a prototype document, is a very small plan, and has at least 1 NHCE.

The agent said: "The plan does not qualify for the $0 user fee under Section 620 of EGTRRA due to the fact that it is an initial plan that was not submitted by 2/02/10, the end of the EGTRRA remedial amendment period.."

We will have them refer to the Form 8717 instructions. I assume these instructions are still current and correct when they say "the application may be eligible for elimination of the user fee provided the plan was first in existence after January 2, 1996." Is this still true, or is the agent correct?

As part of a planned standard termination process, a defined benefit plan sponsor wants to permit participants who are already in pay status -- e.g., receiving an annuity form of payment because they've retired and previoiusly elected to commence benefits -- to elect to have their remaining plan benefits converted to and paid in the form of a single lump sum (with appropriate spouse consent if the participant is married).

Has anyone come across this maneuver? If so, is it permissible? How about in the situation where NO plan termination is planned?

Many thanks?

I am restating a long-frozen IDP in anticipation of termination and a 5310 filing. The plan has one participant. No contributions have been made for more than five years. The plan has a GUST letter, a good-faith EGTRRA amendment and a PPA amendment. The employer is a Cycle E filer.

The plan document provides for permitted disparity, graded vesting and a service requirement for participation. I'd like to get rid of these provisions in the restatement, as they are irrelevant given the plan's frozen status. I was planning on giving the restatement a general effective date of 1/1/2010, with specific earlier effective dates as required. Can I drop the unneeded provisions from this restatement? If so, can I do so effective as of an earlier date than 1/1/2010?

Participant born 11/1936, has received previous RMD's.....deceased 2/2010, with wife as sole benny.

Is an RMD required for 2010, and how is it calculated (her age/his age)?

Thanks in advance!

the following websites

http://www.ssa.gov/OACT/COLA/AWI.html

contains the info that can be used to update some of those valuations on the plan limitations table I have no idea what some of them might be used for, but what the heck.

The National Avg Wage base can be found on this page.

Cost of living table found here:

http://www.ssa.gov/OACT/COLA/colaseries.html

taxable wage base (hey at least i know what this one is used for!)

http://www.ssa.gov/OACT/COLA/cbb.html

bend points

http://www.ssa.gov/OACT/COLA/piaformula.html

all the history, how the calculations are done etc are discussed - I suppose if you have insomnia or something like that.

I am not too familiar with insurance contracts in retirement plans and hope someone can help me. The 5500 I am working on has an insurance contract with The Hartford. The Hartford provides schedule A information. They (The Hartford) also provide Schedule D information for all investments in the contract, so I"m assuming these investments are all PSAs. If I mark the funding arrangement on page 1 of the 5500 as "TRUST" and "INSURANCE", complete Schedule A and put the MV of the insurance contract as PSAs on schedule H, then I get and error message that there is a conflict between the funding arrangement "INSURANCE" and $0.00 assets in BOY and/or EOY on schedule H of Insurance General Account. IF PSAs are wrapped in (aren't they always?) an insurance contract, then which type of assets are they for Schedule H purposes.

Any help would be greatly appreciated.

Thanks.

Patricipant in a 401(k) Plan has a life insurance policy and dies. Face Value is paid to the Trust and then distributed to the participant. Assuming that the PS 58 costs have been reported each year, it is my understanding that the cash value of the policy is taxable to the beneficiary and that the excess above the cash value is distributed tax-free. How does the tax-free portion get reported on a 1099-R?

Takeover fun!!

What are the implications if a plan document calls for prior year testing for both the ADP and ACP test, but the prior TPA used current year testing for both for multiple years. The plan was safe harbor more than 5 years ago, so I don't see any reason for them to have been forced to switch.

Thanks!

We have a balance-forward PS plan that holds some closely held company stock. All participants signed requests for the stock to be retained.

We are now being told by the OCC and an outside counsel that an independent appraisal should be done for proper valuation. We have the annual reports, etc. from the company and call quarterly to confirm current sales price. The company will not agree to cooperate with an independent appraisal.

If we sell the asset, it would have to be back to the company and probably for a significant loss. We want to retain, but do not know how to value the asset to satisfy the DOL. What valuation methods would be appropriate?

The employer would agree to self-trustee to avoid any future problems with bank regulators but we don't want to advise him to do that if the valuation problem will still exist.

I am struggling here today to put my finger on how the regs treat changing medical plans when adding or removing a dependent (i.e. birth/adoption/marriage or divorce). Is there anything in the regs that would require the employee to maintain coverage in the same medical plan. I see the topics mentioned about work location and an HMO. However, outside of this situation - can we permit employees to elect a different plan?

We are self-insured on all of our plans, so it really doesn't matter to us. Any advice would be greatly appreciated.

Plan administrator of multiemployer pension fund frequently receives proposed reciprocal agreements with retroactive effective dates. If the pension funds agree to reciprocate retroactively, there seems to be a 411(d)(6) problem.

Example: Visiting employee begins work in our jurisdiction on January 1, 2010. Our plan administrator is unaware that the employee in question is a visiting employee. On September 1, 2010, visiting employee's home fund forwards a proposed reciprocal agreement with a proposed effective date of January 1, 2010. By this time, visiting employee has earned a year of credited service under our plan. If we reciprocate all contributions received to date, the visiting employee will forfeit his accrued benefit under our plan, thus violating 411(d)(6).

The fact that the visiting employee is not vested does not seem to matter since 411(d)(6) protects "accured benefits" (i.e., not just vested benefits) from plan amendments that would otherwise decrease them. Counsel to funds requesting retroactive reciprocation seem to think this is a problem only if benefits are vested (which seems wrong to me).

Is anyone aware of any authority indicating that 411(d)(6) is not a problem under these circumstances?

We are debating the deadline for an interim amendment for a non-electing church plan. For example, the 401(a)(31)(B) amendment was generally due the later of a) 12/31/2005 or b) the due due of the tax return for the year that contained 3/28/2005.

If the organization is not required to file a tax return, does that mean their deadline is earlier than everyone else, meaning 12/31/2005 is the final deadline for a calendar year organization? Is there any guidance for that?

Need some help. I need to reply to an attorney - Situation.

1. Participant was thought to be terminated, but in fact went to Part time. Company stopped withholding loan payments.

This happend in July. Plan allows participant to make payments by check.

2. Attorney said he had until December 31 to make up the last quarters payments Aug/Sept or the Loan will be indefault.

(Plan has 3 month grace period) One of the loans have it's 5 year date 12/4/ 2010. Attorney said if he makes the payments through September - he is making quarterly payments and the grace period would postpone the default until 2011 (better tax year for the participant as he will have less income)

My research has come up with the Treasury Regs 72(p) don't really address the problem above. It states that the cure period cannot extend beyond the last day of the calendar quarter following the calendar quarter in which the missed installment payment was due. I found something about the IRA Q&A with ABA on 5/9/2003 that said the IRS says that the Cure (grace) Period can apply to the last loan payment, even if that payment is due at the end of the 5 year period.

Anything newer???

Are we okay not defaulting the 5 year loan until 2011???

Pat

This isn't humor, but I wanted to avoid wasting people's time on a regular topic forum. I know many of you here are, like me, elderly enough to remember the Rolling Stones. I just heard a rendition of "Sympathy for the Devil" done, get this, in full country and western mode. This included a woman "singing" (and I use that term VERY charitably) through her left nostril, full twang, Southern accent, scooping and sliding to hit the notes, "fiddlin" and all the rest of the horrific style that represents the worst of hard-core country music.

It was so bad that it beggars description. Wrong on so many levels! Since I didn't hear the intro and it was played n a college radio station, I was wondering if it was merely professional satire, like Weird Al or something from Saturday Night Live. Anyone else had the misfortune of hearing this?

A 5% owner began taking RMD upon attaining 70 1/2 in 2007. The annual RMD was always taken on 03/31 of the subsequent year. I.e 2007 RMD on 03/31/2008, 2008 RMD on 03/31/2009 and 2009 RMD on 03/31/2010.

Now, the plan is terminated effective 05/01/2010 with a distribution date of 11/30/2010. The 5% owner has elected to take the remaining benefits in a lump sum and rollover the distribution into an IRA.

What is the RMD for 2010 that is not eligible for rollover:

1. Pro-rated to 11/31/2010

2. AE at 11/30/2010 using post ret rates

3. Any other method

Thanks to all those who respond

A C Corp business year end is 5/31 and the 401k plan is on a calendar year - do I use compensation paid on the W2 for the calendar year or compensation paid from 6/1 to 5/31 to compute the 25% employer contribution?

What if the C Corp business year end is still 5/31, but the 401K plan year also ends 5/31? What compensation amounts would I use in this case?

Where in the 401k plan document does it spell out the plan year (mean the plan year end)?

DOL auditor found that the expenses of Plan A were mistakenly paid with assets of Plan B. Sponsor has corrected by remitting amount Plan B mistakenly paid plus lost earnings to Plan B. DOL is satisfied with correction.

In terms of the IRS, however, based on my reading of Code Section 4975, this failure does not seem to fit squarely within the definitions of a "prohibited transaction" and "disqualified person."

I wanted to get thoughts on whether this is a PT requiring the filing of a Form 5330 and the payment of excise tax. If it is, what is the "amount involved?" Is it amount of the expenses or the lost earnings on such amount?

Thanks.

SIMPLE IRA making match each payroll all of a sudden stopped match in March. What penalties would they face if they waited until the end of the year to make up the missing match? I'm thinking none. They could just make up the match owed.

Seller spun off a business with union ees and buyer agreed to maintain "mirror" db plan until the expiration of the CBA. Within the year of the spin-off, the CBA is being negotiated. If the parties agree to terminate the plan is there qualification exposure that the plan lacked permanence? Can the new plan's short tenure be "tacked on" to the prior plan? Even if it can't, isn't the result of good faith bargaining a slam dunk business necessity rebutting the presumed lack of permanence?

Next year I will have to take a RMD. I have an IRA and that is not a problem. I also have a 403b with TIAA that is a 10 year payout annuity. The payment each year gets rolled over to the IRA. I have asked TIAA how I take the RMD from this and every time I get a different answer. They tell me just to take it from the IRA and the IRS will not bother me as long as the total works for both accounts. Is this correct? They say there is no way to make the separate RMD distribution. I guess I could direct the payment to me and then roll over the payment minus RMD within 60 days, but they will withhold 20% if I do this. Any ideas?