Good Morning,

We have a plan that is setup to exlude bonuses as compensation. This was done because the employer pays a small bonus for each employee for Christmas and their birthday and doesn't want to withhold from that bonus.

We just found out that the employer has an incentive program where if an employee meets a financial goal each month, they receive two paid days off. Would this compensation be considered a bonus? If so, would that require a special deferral election?

Thanks

I am completing Form 5300 for a plan that spun-off on 1-1-2008. On line 4d it says to put the plan's original effective date. I assume this would be the effective date of the original plan - and that I shouldn't put 1-1-08 - Correct?

I also have to indicate on line 3b if the plan has received a determination letter. The spun-off plan obviously has not - but the other plan has. I assume I should indicate yes and notate the date of the determination letter of the original plan?

Of course I can't find any guidance on how to complete 5300's on spin-off plans. Any thoughts?

Having trouble reasoning this one out.

The due date for Form 5500 for a 3/31/10 plan year would be 10/31/10. Since that is a Sunday, the due date would move to the next business day, Monday, November 1.

An extension of time to file for 2 1/2 months normally takes the due date to 1/15/11. Since that is a Saturday, the due date would move to the next business day, Monday, January 17. However, that is Martin Luther King, Jr. Day. So would the extended due date move to 1/18/11? Or would it be better to be safe and enter 1/14/11 and have a day short of the full 2 1/2 months?

Updated for 2011 cost-of-living adjustments and the new in-plan rollover provisions of the SBJA of 2010.

These charts are provided for your personal use. They may be reproduced, laminated, and disseminated by obtaining my prior written permission. Send request to QPSEP@aol.com

For laminated copies of this and other handy reference charts, contact Denise Appleby at 973-313-9877 or at Visit Her Website

Hope this helps.

--Gary

COLA_RO_2011_Feb_6_2011.pdf

Updated for 2011 cost-of-living adjustments and the new in-plan rollover provisions of the SBJA of 2010.

These charts are provided for your personal use. They may be reproduced, laminated, and disseminated by obtaining my prior written permission. Send request to QPSEP@aol.com

For laminated copies of this and other handy reference charts , contact Denise Appleby at 973-313-9877 or at Visit Her Website

Hope this helps.

--Gary

COLA_RO_2011_Feb_6_2011.pdf

Updated for 2011 cost-of-living adjustments and the new in-plan rollover provisions of the SBJA of 2010.

These charts are provided for your personal use. They may be reproduced, laminated, and disseminated by obtaining my prior written permission. Send request to QPSEP@aol.com

For laminated copies of this and other handy reference charts , contact Denise Appleby at 973-313-9877 or at Visit Her Website

Hope this helps.

--Gary

COLA_RO_2011_Feb_6_2011.pdf

We offer employees an opt out benefit equal to $100 / month deposited to an unlimited use HRA. Employees who opt-out of health coverage, will receive this pro-rated benefit. Two questions: (1) we do not ask for proof of other coverage, is there anything in the new regulations/reform that suggest we should (I am sure there is an opinion out there that suggests we should ask for proof) and (2) could we simply change the plan design to limit the HRA to dental and vision expenses and thus be considered exempt?

We've took over a plan earlier this year, and recently the trust received a wire transfer of about $1,400 representing accounts for "lost participants" where the disbursement checks were not cashed or deposited. The new CFO does not know to what extent efforts were made to locate these participants. I was thinking of just amending the plan to allow for the autorollover of all amounts not exceeding $5,000. I don't think this is a cutback issue or any issue. I would perhaps suggest that the client send out a letter to each of these individuals using addresses mined from a professional locater service.

This is a lot of work for just a few participants, so we just want to deal with it as quickly as possible.

for DC plans updated for EGTRRA, PPA and 415 are there any amendments due this year for calendar year plans?

I have a 401(k) profit sharing plan that is top heavy. The 401(k) part of the plan has immediate entry. The P/S part has one year and age 18. The company is only making the 3% minimum contribution.

Do the participants that are only eligible for the 401(k) portion of the plan share in the allocation of the forfeitures? (as part of the top heavy minimum)

5% owner dies after RBD (back in 2008), and his wife is the sole beneficiary. The wife is younger than the participant and as of December 31, 2010 is age 85.

So do I go to the single life expectancy table and calcualte her minimum distriubtion as her 12/31/09 balance divided by 7.6?? Why is this factor SO much smaller than the regular RMD table which would call for a factor of 14.8???

Did I screw up by not telling her to roll to an IRA, where I presume she would have been subject to the regular rmd tables?

Got a 5% owner participant who turned 70.5 in May 2010. He will be selling his ownership interest in the next week or so.

Is he required to take a minimum distriubtion? It becomes a critical question since I've learned once you're treated as passing your RBD as a 5% owner, you are alwasy considered a 5% owner. And his RMD's are a lot...

All I can find is references to be a 5% owner "for the plan year"

What I've found so far. It doesn't seem to say "at any time during the year" anywhere:

1.401(a)(9)-2 A-2©:

© For purposes of section 401(a)(9), a 5-percent owner is an employee who is a 5-percent owner (as defined in section 416) with respect to the plan year ending in the calendar year in which the employee attains age 701/2.

416(i)(B)

(B) Percentage owners

(i) 5-percent owner For purposes of this paragraph, the term “5-percent owner” means— <A name=i_1_B_i_I>(I) if the employer is a corporation, any person who owns (or is considered as owning within the meaning of section 318) more than 5 percent of the outstanding stock of the corporation or stock possessing more than 5 percent of the total combined voting power of all stock of the corporation, or http://' target="_blank">(II) if the employer is not a corporation, any person who owns more than 5 percent of the capital or profits interest in the employer

One of our employee is to be made an partner of the company. My understanding is that he would no longer be regarded as an employee and would be given a guaranteed payment instead of a wage.

We have set up a Safe Harbor 401k with the matching formula elected.

My questions are:

1) Is he allowed to continue making elective deferrals?

2) Would the partnership still have to match 6% of his elective deferrals as his "employer"? Is this based on ALL of his compensation?

I apologise if I am not making sense. We are actually an Australian company that operates a LLC over in the US. This whole 401k business is different to the Super Contribution system we have in place here. It's been quite a journey learning all of this!

A particpant has contacted its employer to take an in-service withdrawal from his account.

Plan allows for in-service after age 59.5.

The participant has after-tax funds (old money, prior to Roth) as well as pre-tax and match. The amouunt of money he wants will require that some of his after-tax money be taken.

Question 1: Can you roll over after tax money to an IRA? I thought yes so long as the funds go to a ROTH account.....

Question 2: Should the money be taken from all account pro-rated so only a portion of the after-tax is withdrawn?

Thanks for your help.

Got a client with some concerns about the plan administrator and/or the adjudicator of claims being the same person who also does the hiring and firing. The first thing that comes to mind of course is an abuse of power where an ee is not hired or loses employment because they would cost the company a lot of money because of health issues or concerns about job performance etc.

Any regulations, laws, guidelines, advice on this issue?

Edit: Just saw this thread which helps, but any further commentary on this issue would be appreciated.

It was discovered that the participant counts on a fairly recent Form 5500 for a small employer are incorrect. The numbers are significantly off (37%), but this doesn't change their status as a small employer. What's the realistic harm in letting this go and not amending the inaccurate filing?

ERISA 101(j) says the Notice shall be provided within 30 days. I don't believe there is a corresponding section in the Code.

If the AFTAP letter was issued 9/30/10, 30 days brings us to 10/30/10 - a Saturday. Does this get extended to 11/2/10 - a Monday?

Is it acceptable to use Line 4 f of schedule K-1 for calculating a partner's comp? Line 4 is 132,400.00 Line 14 C is $486,159.00. Accountant is saying that the only earned income was the Guaranteed payments listed in Line 4 and that the rest of the income reported in Line 14 C was from royalites.

Earlier in this 2010 calendar year, an individual was making contributions to a Roth IRA. The Employer has just established a 401(k) Plan that includes both Traditional and Roth Deferrals. Can the person now contribute under the new 401(k) given the contributions made to the Roth IRA?

Here's the situation...employer adopts a prototype plan for its GUST restatement. The prototype sponsor adopts all required interim amendments (through 401(a)(31)(B) on behalf of adopting employers in a timely manner. In spring of 2005, employer changes providers and adopts the new provider's prototype document. However, the provisions of the plan do not fit on the new providers prototype so it is amended and considered individually designed.

The employer did not adopt any interim amendments from 2005 through the present. Can this employer who amended out of prototype status nevertheless rely on the interim amendments adopted at the sponsor level post 2005?

Or, is a streamlined VCP required to cover the interim amendments post 2005?

Comments are appreciated.