The U.S. Department of Treasury has announced that employers currently using paper federal deposit coupons must make payroll deposits electronically beginning in 2011. Does this apply to deposits of withheld tax on distributions from retirement plans?

Prototype basic plan document contains failsafe language for plans that do not satisfy the minimum coverage requirements (ratio percentage). Generally speaking, would this provision only apply to employer nonelective (e.g. profit sharing) contributions? Could the failsafe also be used for an annual match? The plan I am testing has an annual match with a 1,000 hour requirement and last day rule and fails ratio percentage. The failsafe language is pretty standard - first group is to include employees who worked at least 900 hours, second group is 800 hours, etc. My question is can I bring in employees who belong to the group that I need to use if they did not make a deferral (and therefore are not eligible for a match) to satisfy coverage. Thanks.

A participating employer in a multiple employer plan withdraws from participation and starts a "new" plan as a single employer. If assets from the MEP are transferred to the new plan, do you have to protect benefits? IF it is part of a sale/acquisition such that there is a distributable event - ie termination of employment and then hired by new entity and rollovers go into new plan, I assume the answer would be different?

1) have the company buy the shares from the plan, thereby reducing the number of shares?

2) leverage the ESOP?

The plan did not make a contribution for calendar year 2009.

Suggestions?

Employer failed to make a SH and PS contribution for plan year 2008 by 9/15/2009. The contributions were made in March 2010. Must the employer restore lost earnings to the plan for these late contributions?

We do now know yet if they took a deduction for the contributions in 2008. If so, they would need to amend. Also, the PS contributions were not "discretionary" per se, since they also have a DB plan and the PS contributions were required for the plans to meet the combined Gateway contribution.

A participant completed his primary bene election as 100% to his wife and 50% to his son - then his 2nd son as 50% under contingent - he most likely meant to name the 2 sons as 50 / 50 contingents....

Anyway... our firm did not audit the incorrectly completed bene form completed by the participant - we scan for our files and then forward the original to the client...

The client rec'd the form and was very angry / upset that we did not audit the form to see that 150% was named as primary and that the form should be re-completed....

What do others do with bene forms? Do you audit them for accuracy / correct completion? Do you catch obvious errors and return for completion of new forms? Or do you touch them at all and instead forward directly to the client for them to review / store?

Thanks!

Looking for opinions --- our CPA firm is auditing a 401(k) plan administered by a large insurance company. When reviewing the payroll records and the plan document, it came to our attention that three different companies are participating in the plan, two of them are related and one is not related to either of the other two companies. The plan document does NOT contain any provisions for participating employers and, in fact, most of the contributing employees are not employed by the company sponsoring the plan.

Upon bringing this to the attention of the insurance company, they felt this was a minor issue and could be corrected by simply adopting an amendment to have the other two companies be participating employers.

Any opinions?? I am not an auditor, but am a TPA and I would think this is material enough to warrant EPCRS attention using VCP or self-correcting and submitting for a FDL.

For any auditors out there ..... what would you do from an audit standpoint regarding disclosures or even with respect to issuing a report???

Thanks.

James

Does the HEART Act apply to NQP plans?

I blew right through the July 15 due date for our second quarterly contribution. Pay it right away first and then what? Do I have to fess up to the employees? to the guvmint?

Plan Year end for this Plan was 9/30/09, but is switching to calendar year. So, now there is a short plan year 10/1/09-12/31/09, which we indicated on the 5500SF in the dates and in Part IB. Have received the following Error message after submitting -

X-112 ERROR Fail when the Filing Header, Sponsor Signature date is less than the Plan Year End date unless the Administrator Signature date is equal to or greater than the Plan Year End date. Your plan will need to be amended and re-transmitted.

Does anyone know what this means, and exactly what section we need to amend? Do we need to put the plan on extension, or just file an amended return by 10/15/10?

I have a plan sponsor who is changing banks. Is there any special notices that need to be sent to current retirees receiving payments? other than new ach forms and w-4ps

When does this have to be made for a plan with a Sept 1 plan year commencement date? By September 1, 2011? It seems to me that you don't actually have grandfathered status until the regs apply (in this case until September 1, 2011), so the disclosure should be made by then.

Code section 401(a) requires the creation of a trust for plan assets. Is it stated anywhere explicitly that said trust must have a TIN separate from the employer? Where?

From our favorite EFAST2 Q&A:

Q27a: Can I encrypt or password-protect the PDF files?

No. A PDF that has been encrypted or password protected to restrict editing, printing, or viewing can not be included as an attachment in your filing. If you attempt to include such an attachment in your filing, EFAST2 will remove that PDF from your filing and you may receive an error indicating an attachment is missing.

So, an accountant sends me a pdf, which may have been dumped from software rather than printed to paper and scanned in. I can open it and using handy/dandy Adobe Acrobat Pro 9 crop it, use the typewriter function, and likely other things. But, I cannot edit text a la "touch-up?"

The accountant certainly hasn't password protected or encrypted. However, I suspect the PDF writer nukes the possibility of editing text created by a different owner.

Will this pdf be rejected? If so, must the attachment be printed out and then imported via a scanner?

Have a case where Safe Harbor Contribution for 12-31-09 PYE was not made yet and we think no extension was filed.

Of course, I am hoping that when the CPA gets back from vacation he will have good news for me.

But just in case I don't get good news I was looking in Rev. Proc. 2008-50 for where is says the correction for this. I remember that we can self correct through 12-31-10. But I can't find this.

Can someone tell me where it is?

Or am I all wrong in my memory?

I'm using I file for DB plans. Edit Attachments breaks down all of the auditors exhibits. Must you add as separate attachments or will IFILE accept a filing where you've simply attached the Auditor's opinion and it clearly labels the exhbits?

Thus, one glop versus 4 or 5 little glops (e.g., opinon letter, 5% transactions, assets held, footprint of first born).

Does EFAST validate the name associated with the user name and PIN against the name entered as Plan Administrator? When troubleshooting these things, we're wondering if that's could have something to with the processing stopped status that we get once in a while (the error description always related to the user name and the pin).

So for example, we have John Doe on the 5500, but they used John D. Doe on the DOL's site. Or John Doe versus Johnathan Doe. Or Johnathan Doe vs. Johnathan Doe MD, and the list goes on.

Logic dictates (to me anyway) that it would be borderline worthless to run such validations, but...

Just in case you don't subscribe to it, this is from the Benefits Link daily newsletter (hint: its free, contains lots of useful info, get your daily e-mail from BenefitsLink and then I wouldn't have to post things like this)

http://www.americanbenefitscouncil.org/doc...enial072110.pdf

Maximum Deductible Contribution per 2009 valuation is $200,000. Employer Contributes $250,000 during the calendar year 2009. So now they must file a Form 5330 to report the excess nondeductible contributions. Are the excess contributions simply $50,000? Or can you use the value of the contributions during made during 2009 discounted back to the valuation date (1/1/2009)? If this is the case the excise tax would be slightly lower...

Does anyone have a good article on what you need to be wary of when investing in real estate in a 401(k) plan? Property taxes, increased audit risk due to 5500 disclosures, nondiscrimination issues, etc.

I have a trustee that wants to do this in his self-directed 401k, but I want to make sure I've at least told him why this is not a good idea (at least from a compliance perspective).