Does anyone know of any guidance or has anyone ever experienced a situation in which :

1. a plan improperly excluded employees

2. Plan qualifies for small plan waiver of audit requirement

3. Plan corrects under EPCRS to make imprerly excluded employee whole

4. by adding the improperly excluded employees the plan no longer qualifies for the small plan audit requirement?

For example:

Plan has 92 participants at the end of 2008 and terminates.

36 employees who were improperly excluded at the time of the plan termination become 100% vested in a benefit. Plan files under EPCRS to correct this defect. Does Plan need to file a Schedule H for 2008?

Has anyone had issues with the automated email reminders from Relius Web Client being sent to your client?

Many of our clients have complained about receiving the constant email reminders but I'm not sure how to disable the emails from being sent to them. I know I could make the particular individuals inactive but then I don't think they would be able to file.

Any suggestions?

I have heard that new instructions will be issued for the 2009 Schedule SB. Has anyone else heard this and if so are you still preparing 2009 Schedules SB or waiting for the new instrucitons? Thanks.

I have a few plans that require the filing of the form 5330 for 2009 and I need some clarification.

Example 1.

Plan had a few late payroll deposits in 2009 which were deposited in 2009. The lost earnings were only $15 and were applied to the plan in 2010. How do I report this on the 5330 on Sch C? I believe I put the due date, description and the amount of the interest of $15 in the amount of prohibited transaction.

Is this correct?

Since the interest was not deposited until 2010, I read that a 5330 has to be done in 2010 too. What do I put on the 2010 5330? And can I do a 5330 now for that now?

Example 2.

Plan had late deposits in 2009 which were not discovered until 2010. Then deferrals were deposited, interest calculated and deposited into the plan in 2010. The interest was calculated from the due date to the date the actual deposit was made in 2010. The interest for 2009 was $500 and the 2010 interest was $200.

Again I have to do two 5330's one for 09 and 10. What do I put on each 5330?

Thanks for any help.

Participant has requested primary residence loan to purchase an RV. Repayment period is 20 years

It is possible someone could live in his RV, but what documentation does plan administrator ask for? He may use a PO Box as his mailing address. Need some type os proof that RV is really his primary residence

Any help is appreciated!

Retiree did an NUA with his ESOP shares in February and transferred all shares in his ESOP to a taxable account. Followed the rules to the letter and got the correct paperwork from Fidelity. The triggering event was his termination from service in April of 2009 and the transfer was accomplished within one year. He is 62.

Last month he received a dividend check from his ESOP and to his surprise found out that his employer had funded it for another 50 shares in March of this year.

His concern now is that through no fault of his own, that instead of just the cost basis being taxable in 2010, now the whole ESOP distribution is taxable in 2010. The difference between the cost basis and mkt value at transfer was about $30K.

Any ideas?

Client has an old SARSEP plan. Some employees put money into a HSA account. These contributions are deducted from all of the boxes on the W-2 ( including social security wages ). For the 3% employer contribution calculation do I add back the HSA contributions to the social security wage figure ?

Participant requests a hardship withdrawal of an RV under the purchase of primary residence standard. How do you approve an RV under this standard - how do you verify that the RV is really going to be his primary residence?

I have a controlled group that has had two of the companies fold due to the economy.

I still have a few people that have not taken their distribution yet and they are over $5000.

When do I remove the controlled group member from the plan document as a participating employer?

The companies themselves will be shut down soon now that the rest of the people have just been let go.

Suggestions appreciated.

Thanks

Pat

A plan sponsor is a closely held owner of a business with say 10 employees.

He has a defined benefit plan and a cross tested 401k profit sharing plan that provides a separate rate group for each participant.

When amending the defined benefit plan is a resolution required as well, authorizing the amendment? I don't always no or see th point of a resolution, especially with a closely held business. The plan document does not make mention of a resolution needed in its plan amendment provisions.

Now for the 401k plan.

After the year is over the owner decides on the percentage allocation for each participant. To document this, is an amendment required? A resolution required instead? Or both? It would just state the amounts provided to each employee for the specific plan year.

Thank you.

If a change from accrual to cash method of accounting is desired for the Form 5500, is it necessary to file IRS Form 3115 to obtain IRS approval to make the change?

I am wondering if there has been discussion on how organ transplants will be viewed under the annual limits requirements of the Patient Protection and Affordable Care Act. Specifically, will organ transplants be considered an essential or a nonessential benefit? Any thoughts or discussion on this is appreciated.

In order to not violate universal availability, does anyone believe that a 403b plan cannot therefore allow exclusions from compensation for deferral purposes - i.e. exclude bonuses or commissions from deferrals? As long as the plan is offered to you, does not matter that a portion of your pay is not eligible?

We are using Relius WebClient to upload our Form 5500's and attachments to our clients. When they are clicking on E-File they receive a message that there is a schema error and that their filing will be rejected.

There are no other notes/warnings associated with this plan and nothing in the help menu on schema. Is anyone else receiving this error? Any ideas on what may cause the error?

I know of an unsophisticated fiduciary thought it was OK to borrow some money from its own ERISA plan, to keep the company viable. He now has the money to pay it back with lost earnings. He obviously didn't know about 18 U.S.C. § 664 and that it is not OK even if you think you are just borrowing the money, not intending on keeping it. Conversion, embezzlement -- has been perfected, basically. While there is no excuse and this is serious, you know that many unsophisticated plan sponsors justify their use of plan assets with the "keep the business afloat, I am doing this for everyone's sake not just mine" rationale.

Is there some kind of DOL or IRS amnesty program that would work? I know the DOL has the VFCP and could this be finessed under the "below market interest transaction with a party in interest" listed transaction? Any ideas would be welcomed. Thank you.

A client has 8 different companies comprising of a controlled group. Each company has a separate profit sharing plan, that is, a 401(k) plan without deferrals or matches but with a non-elective employer contribution. The non-elective is given to everyone over 21 and 1 who has worked 1,000 hours and is there on the last day of the year. However, the non-elective is different for each company, a few have 5%, a few have 7.5% and the rest have 10%.

The client's attorney says that since it is a controlled group and they need to perform coverage testing together, that they will also need to perform the General test because of the different levels of contribution. At first thought, I don't agree with the attorney, but want to know if I'm missing something. Each company can pass the coverage test (only 1 company/plan has HCEs/Owners, but it also has NHCEs) on its own, and since they can be disaggregated for coverage testing, wouldn't the employer contribution be regarded as a safe harbor? and the General test not be necessary?

Any insight would be helpful, thanks in advance.

Instructions read you must check “Yes” if any benefits due under the plan were not timely paid or not paid in full. Would this include mandatory distributions not made timely, what is considered timely and would this be a red flag? Any guidance or interpretation of this would be greatly appreciated.

Has anyone heard that the DOL will NOT be providing an automatic extension? I know that a big trade group had pleaded for an extension, but of course nothing yet and the clock is ticking...

terminating single participant plan has a whole life equitable policy with a face of $52,800 and a CSV of $30,000.

The policy could be rolled over to an IRA, correct? They would just restyle the name of the policy and change the beneficiary on record. The participant is in poor health.

ER decided to waive service requirements for a new hire and let them defer and receive ER contributions upon hire date (document has YOS and 21 for ER and EE). I know we can FF the contributions and make the EE whole through payroll. How does the retroactive amendment work? That is what is the process, do you need to go through VCP or ??

Also, does the amendment specifically name the person or is the amedment on a plan level, which may let others in as well?

Thanks!