This is probably an old question, but I need to know whether a contribution/allocation to a money purchase pension plan is required if the plan termination date occurs mid-year and the plan terms require an employee to work at least 1,000 hours of service and be employed on the last day of the plan year in order to receive a contribution. The employee already has worked 1,000 HOS but has not completed the second requirement, last day employment, until after the plan has terminated.

Would it make a difference if the account was distributed after plan termination and prior to the last day of the plan year?

Employees of hotel chain were laid off, now they are being rehired. They were previously eligible for the 401k plan. Layoff was for a year or less. Since 1300 are being rehired, the cost of distributing another SPD is very large.

Since they previously received an SPD, does another one have to be issued? There were no material changes to the plan (however maybe the document changed to the EGTRRA restatement)

Any thoughts?

We have several clients who operated single-person or "solo" 401(k)s who distributed all assets from these plans (and closed the account) into IRAs prior to 12/31/08.

The 401(k) custodian is insisting that these clients submit updated Adoption Agreements even though these accounts were effectively closed out. They state that any plan having a balance after 1/1/06, regardless of the plans current status (or status as of 1/1/09 for that matter), terminated or otherwise, must update the document.

It seems illogical that terminated plans require retro restatement. Are updated Adoption Agreements necessary for these plans?

Thank you.

Bob

In trying to verify some factors:

I want to get a response to the value of a52 and a53 with payment of 1 each year at beginning of year.

Based on GAR94 and 4%.

Some of my data includes that

q16 = .000296

l16 = 1,000,000

q117 = 0.50

l117 = 1

l118 = 0

q120 = 1.00

I compute a52 as N52/D52 where N52 = D52 + D53 + D54 + ... D120 and D52 = l52 * v^52.

First please confirm the above data then please let me know your result for a52 and a53.

Thanks.

Gary

Our pension plan had mandatory employee contribution through 1977 and we have been adjsuteing the value yearly since then using 120% of the mid-term afr rates. Under PPA, a question has come up regarding the determination of the accrued benefit attributable to employee contributions and the segment rates that apply for projecting the age 65, our NRD, benefit when an employee applies for retirement. Is anyone aware of a post that addresses the issues? Are spot rates to be used or do the transitional rates such as for Mandatory distributions apply?

Corporate 401(k) Plan Sponsor goes bankrupt. Filed 2007 Form 5500 without attaching the auditor's report, because an audit was never prepared. IRS/DOL rejects the filing for lack of an audit attachment. Plan Sponsor ignores the notice. A couple of months ago, the owner of the bankrupt corporation (sole 100% owner) receives a DOL $15,000 CIVIL penalty notice for failure to provide a complete 2007 Form 5500 filing. DOL says that since it's a civil penalty, there is no recourse and the $15,000 is now due.

Question is: Who pays the civil penalty? Corporation is bankrupt so there's no money there. Is the 100% owner of the bankrupt corporation personally liable for the civil penalty? Thanks for any assistance!

If a participant fails to respond to a mandatory distribution either because he has terminated and his account balance is between $1000 and $5000, or because the plan is terminating and the account must be distributed, then an automatic rollover IRA account can be established for the account, per IRS regulations.

What is the employer has another qualified plan, can the money be automatically rolled over by default to this plan, or must it only go to an IRA?

This question relates to a Form 5500 filing for a group health insurance plan. A company was filing 5500s as an S-Corp, but recently established a new LLC and transferred everything from the S-Corp to the LLC. The insurance contracts are renewing under the new LLC name. Due to the timing of the entity changeover, most of the Schedule A's show the old company name and EIN. Now, we're wondering how to do the 2009 Form 5500. Can we change the entity name on page 2, item 4? Should a final 5500 be filed for the S-Corp and another 5500 be filed for the new LLC?

If a plan sponsor has attempted to file a Form 5500 on EFAST2 via an approved 3rd party vendor software package, and they receive the status of "Filing Stopped", does that mean they are considered to have filed before the deadline? Their forms are showing up on the search function under EFAST2, and, according to the chart on FAQ#39, it indicates that "Processing Stopped" (assume that is the same as "Filing Stopped"?), it is considered a filing.

When I called the EFAST2 hotline, they told me that this client had to amend by the original filing deadline or the DOL would consider them missing the deadline. This client does not want to file a Form 5558. So we now need to work with them to amend within the next few days!

Has anyone else run into this situation? Did you get the same answer from the hotline?

Does anyone know who to contact to obtain a previously issued copy of an IRS VEBA opinion letter? The letter was issued sometime back betweek 1987 and 88 and we cannot locate it.

We're going back and doing EZ's potentially to 2000!!

1) Is there a basis for only go back say, 6 years, based on the statute of limitations?

2) Is there any basis for just filing a bunch of 2009 forms with all of the various dates on them? I doubt that we'd even be able to track down say the 2002 form...

I'm working on a plan that defines compensation for profit sharing allocation purposes by reference to compensation that is subject to payroll withholding, i.e., IRC section 3401(a). Generally speaking, Form W-2 Box 1 amount.

The sponsoring employer is an S corporation. The sole stockholder is also an employee of the S corporation.

Now that the value of health insurance provided to the S shareholder/employee must be included in Form W-2 Box 1 amounts for S shareholders/employees, is the value of the health insurance included in the S shareholder/employee's compensation for profit sharing allocation purposes?

What do you do when the expense submitted was over a year ago? Is there a time limit for approving hardships distributions? What do other practioners do, is it an internal procedure that you need to establish as to how old an expense can be?

This is an ERISA 403b plan using the IRS safe harbor standards.

Thanks!

plan sponsor is a member of a controlled group but maintains its own stand alone plan. an employee terminates his employment with the plan sponsor and goes to work with another member of the controlled group. the plan says you do not have a separation from service if you are working for a related employer. i am thinking the employee does not have a separation from service even though this related employer is not participating in this plan and thus the employee can not receive a distribution. am i correct in my thinking?

Have a 401(k) Plan with a Profit Sharing Accont (no match)

Joe terminated was paid his deferral, but was 0% vested in his PS account balance.

Joe came back to work after being gone about a year.

According to the document he comes back in as of date of rehire and want to have his forfeited PS account reinstated.

1. The plan document states that he has to repay his entire vested balance. I assume that this includes his deferral.

2. If he repays his deferral, I assume again this is after tax money. Putting it into his deferral account, once he terminates again - this money would then be taxed again????

Seems like if the above is true, he should wait until he is vested before he repays the 401(k) money due to the double taxation.

I have been doing 401(k) plans a long time and have never had anyone want to repay their balance. (I can see why he might want to as the PS was large enough to want to get, I just would wait as he has five years to do it.

(Vesting is 3% cliff)

What do the rest of you think???

Thanks for your help.

Pat

Hi,

I have a client that seems to think that deferrals for the owners of a corporation can be deposited at any time. SHe just informed me that if there is a cashflow issue, then she would always deposit the employees deferrals timely but that her own were not deposited until there was enough cash. She receives a w-2 and has 401(k) withheld with every pay period. Her 401(k) deposits are made whenever there is cash. When I tell her that this is not correct she says that she is not harming anyone.

Is she correct? I don't believe the regs distinguish between employee 401(k) and owners 401(k).

Thank you!

I have received conflicting advice on available amounts for hardship after a loan.

A participant has an account balance of $22,000, this includes a loan balance of 10,000, so actually account value is 12,000. Therefore after deducting the loan balance and covering the 50% this would leave the client with $2,000.

So is the participant eligible for a hardship of 2,000 or are they eligible for 12,000?

Thanks.

I just saw this allocation formula... why does this not seem right?

1 hour for accural.

Group A Allocation: 10,000 if employed from 1/1 to 3/31. 20,000 if employed from 1/1 to 6/30, 30,000 if employed from 1/1 to 9/30 or 40,000 if employed from 1/1 to 12/31.

Can anyone help clarify what is meant in FAB 2009-02 that states:

The contract or custodial account is legally enforceable against the insurer or custodian by the participant alone, without any

employer involvement

I'm hung up on the "legally enforceable" part. Does this mean that the conditions and terms of the account are between the participant and the insurer and that the particpants does not need or require employer involvement in regard to any ongoing or future transactions in the account?

If the employer has to sign off as the Plan Administrator for loans and distributions, would that not meet this condition?

Thanks

403(b) plan had allowed for both EE and ER contributions. In 2007, the plan was frozen. No new participants entered and now new contributions can be deposited.

I have the asset information for 2009. As of 1/1/09 125 participants had balances. As of 12/31/09 117 had balances.

Per Field Assistance Bulletin 2009‐02, individual contracts or custodial accounts that meet all of the following requirements do not have to be reported as plan assets (or in the participant count) on Form 5500:

1 The contract or custodial account was issued to a current or former employee prior to January 1, 2009;

2 The employer has no obligation to make any contributions (including salary deferrals) to the contract or custodial account after

December 31, 2008;

3 The contract or custodial account is legally enforceable against the insurer or custodian by the participant alone, without any

employer involvement; and

4 The employee is fully vested in the entire contract or custodial account.

Items 1 and 2 are obviously met. #4 is true also. #3 I am almost certain of.

So, if all 125 contracts met this exemption, then I have zero participants to report on the 5500. Would you agree?

Also, if that is true, would I still file a 5500, showing zeroes or would I not have to file a 5500?

Thanks