The new funding relief provides a 2 and 7 rule or the 15 yr amort rule.

The question is:

Say the rellief is used for a 2009 cal yr plan.

Does this relief apply to a new amort base or does it apply to the entire funding shortfall including bases established in 2008?

my impression is that you take the entire shortfall and apply it and not just the new base.

thanks

I have a client whose father had a Fidelity Keogh. The father died in 2002 after beginning his RMDs, and Fidelity moved the money into two accounts for the two kids/beneficiaries and titled the accounts inherited profit sharing plan in each of the childrens' names. Of course there is no document to go by and no 5500s have been filed, but in finding a place to start I wanted to understand if this type of a plan is even available, especially since there is no plan sponsor and the only activity has been RMDs.

ok - I thought there were threads about this but I searched and came up empty...

I submitted a client's return through IFile. The client obtained the necessary credentials and went in and signed the filing for me. I went back in and submitted the filing.

When I submitted; the filing showed as "Filing_Stopped". The form IS showing up in a general 5500 search on the EBSA home page.

Attached is the filing error I received. The client has assured me that he registered as a "Filing Signer" and that he completed the registration process through getting his User ID and pin.

Any thoughts?

DOC070810_001.pdf

Soleproprietor has a MPPP. Owner/proprietor is the only participant.

Owner does not want to contribute for current plan year. I told him that he must contribute 10% because it's a MPPP and the adoption agreement requires a 10% contribution each year.

Does the fact that he is the only participant allow him to avoid having to contribute?

Why should the DOL care if he contributes or not. It's not like some employee participant is going to complain.

The reason I ask, is because I am preparing the Form 5500-EZ. Line 10, requests info about contribution amount if the plan is a defined contribution plan that is subject to the minimum funding requirements of Sec 412 of the Code.

I don't want to falsely claim on the 5500-EZ that the plan is not subject to Sec 412 minimum funding.

Does anyone know if there is some exception to the Sec 412 minimum funding requirement, that might allow him to not contribute simply becasue it is a single owner/participant plan ?

I have a client with a Safe Harbor 401(k) plan utilizing the 3% SHNEC to satisfy the SH requirements. It also has an integrated profit sharing allocation with a last day requirement. Based on the client's request, they will make the 3% SHNEC and they want to make an additional integrated allocation. The integration level is 81% of the TWB. The additional allocation will be 6% of total comp and 5.4% above the integration level. Additionally, there are a number of NHCEs who terminated during the year. They will receive the 3% SHNEC, but not the additional intergated profit sharing allocation.

Based on the above and my understanding, the rules dictate that if both allocations would essentially be design based safe harbor allocations and they had the same allocation requirements (1000 hours, last day, etc.), then no 401(a)4 testing would be required. However, in this case, the SHNEC cannot have any allocation conditions and the integrated profit sharing allocation has a last day requirement. In this case, I believe that I have two options that I can use for this plan:

(1) Component Plans - If I am able to split the plan into component plans (by passing 410(b) for each of the component plans), I could split the group of terminated NHCEs who only receive the 3% SHNEC into one component plan and all of the other participants who receive both the 3% SHNEC and the integrated allocation into the other group. Based on this method, my thought is that the allocations in each of the two component plan groups would essentially be design based safe harbor allocations and no 401(a)4 testing would be required.

(2) Cross Test the Plan - The terminated participants who only received only the 3% SHNEC could have their allocaiton percentages increased to the gateway minimum allocation (permited in the plan doc) and the plan could be cross tested for 401(a)4.

I would like to confirm that the above is correct and that I am able to utilize either of these methods. (If so, I will utilize the first option as it is the more cost effective.) Any comments are greatly appreciated.

A collateral assignment split dollar agreement is terminating due to termination of the employee's retirement. The employer is going to forgive the debt owed (for the premium payments) and release the collateral. I assume a simple document releasing the collateral and forgiving the debt is appropriate, but isn't the collateral assignment filed with the insurance company? Would something need to be filed with the insurer? HELP!

For those of you with an employer contribution based on a profit sharing component, what is the method you use - if the company hits x amount of pre-tax profit you contribute an additional x% to the participant's account? Based on revenue and not profit? Thanks

We have a 403(b) plan that is sponsored by a hospital. They were recently notified by the IRS that their 501©(3) status is being revoked. It appears that under IRC 1.403(b)-10(a)(2) that they can amend the plan to discontinue contributions and "freeze" the plan. If this is the decision they make, can participant loan payments still be made to the plan? Can new loans be made to participants? Alternatively, the plan could be terminated and all the loans would become taxable.

This is sort of a continuation of a previous thread, but a different question...

OK, so ERISA Plans say that anyone who works 1,000 hours in 12 months must be eligible for the Plan, even if they subsequently drop below 20 hours. The question is (assumign the plan is using the 20 hours exclusion), will allowing this ERISA eligible employee (who now only works 10 hours a week) automatically violate the 1.403(b)-5(b)(4) "all or none" rule? Maybe THAT's why the TIAA document doesn't include the 20 hour a week exclusion?

I know an SPD must be furnished to an employee no later than 90 days after entering the plan.

However, is there a "too early" date? Could the ER give the SPD to an Employee upon hire, even though her entry date might be 14 months later?

Our Defined Contribution retirement plan requires employees to complete a year of eligibility service before they begin participating in the plan. The year of eligibility service is defined as 1,000 hours of service during the 12 month period beginning on the employment commencement date. Students are not eligible for the plan. Sometimes we hire new graduates who performed services under the "work-study" program when they were students. Are we required to count the hours of service they performed in the work study program in determining whether they have completed a year of eligibility service?

Participant retired last year, not a 5% owner, he was 70 1/2. First distribution due 4/1/2010 but suspended under WREA. Participant should take a 2010 RMD by the end of 2010. However, participant is going to be rehired this year. How does this impact the RMD - can it now be further suspended until the year he retires for good?

Any help is appreciated

Plan failed 2005 ADP testing and we are now just correcting it. Client has chosen the one-to-one method as their correction method.

Total refunds due are $10,000.

Employee A is due a $2,000 refund.

Employee B is due a $3,000 refund.

Employee C is due a $5,000 refund.

Earnings are calculated and

Employee A refund is $2,200 ($200 earnings)

Employee B refund is $3,500 ($500 earnings)

Employee C refund is $4,700 (-$300 in losses)

Now we have to calculate how much the QNEC should be. In Appendix B - Section 2.01(1)(b) it says that the same dollar amount (adjusted for earnings) is contributed to the plan.

So do you think it should be $10,700 (only taking into consideration the positive earnings) or $10,400 (netting all earnings)?

After reading in the EPCRS, Appendix B - Section 2.01(1)(b)(IV)(A), it says that the employer makes a contribution to the plan that is equal to the aggregate amounts distributed. I think that means we could net out the negative earnings and the QNEC would be for $10,400.

Also, if all three had negative earnings, could the QNEC be less than the $10,000?

Any other thougts?

Thanks in advance!!

While doing my due diligence on an IRA we aquired in a conversion I came across a partnership in an IRA. The partnership agreement names the individual as 50% owner rather than the IRA as owner. Regardless, the IRA holder is only one of 2 in the partnership and since the previous custodian was not consulted on the management of the partnership the IRA holder had 50% of the management control over the partnership. I am calling this a prohibited transaction either way you look at; however, the original investment was done in 1992. Do I need to find a 1992 1099R to report this prohibited transaction on? I thought I remembered hearing that we were to report in the year it was found but the IRA ceased to exist as of the year it was done.

My employer in California suddenly reduced my salary 25% per year in July of 2008 and started a salary-reduced SEP program. This was against my wishes and was forced on me. I recently discovered that SARSEPs were outlawed in 1996.

I asked him today what the plan is called since SARSEPs are illegal. He said it doesn't have a name...it's just a SEP, but it's not a salary-reduction plan. He could not/would not answer when I asked him why my salary was being reduced 25% if this wasn't a salary-reduction plan.

In the course of this salary-reduction SEP plan, my salary has also been shorted for the past two years. My boss says that's because my salary is based on the company FISCAL YEAR rather than the calendar year (that it's ALWAYS been based on before). This, of course, benefits the company (by FY, my salary is OVER by 2k, by CY, my salary is SHORTED by 2k). He admitted to me last week that my salary had been shorted, but it seems like he and the accountant ran the numbers in as many ways possible until they got what they wanted. My pay has always been based on the normal CY before, and today was the first time he's said that they're basing it on the FY for ANY reason.

Any advice on how I can get him to stop this salary-reduction!? He refuses to, even though he KNOWS it's illegal (he simply won't use the term salary-reduction SEP). I've been with this company for 9 years, and these are just a couple of many sneaky, evil things this employer has done, but it's tough to change jobs in this rough economy..and I can't afford to with my salary reduced 25%.... (he doubled his salary in the meantime so that he could make the full $49k deposit into his SEP for FY 2010).

Any help/answers/advice appreciated.

Client has no liquid assets and wants to make back 401k contributions in a non-cash asset that he has. We understand that this could give rise (or probably does give rise) to a PT, but I'm wondering if there is a broader prohibition on funding 401k with non-cash. In this case, it is a mortgage. We're trying to tell the client all of the reasons not to do this. It's a pooled acccount.

I'm aware that commissions earned on a Group Annuity Contract are reportable on the Sch. A or the form 5500-SF, however the case may be. I am being questioned on this point. The insurance agent is adamant that those requirements apply only to life insurance & not to other contracts with insurance companies. I spent three hours today arguing the issue without success. Is anyone aware of any guidance that mentions group annuities specifically. Although it seems clear to me, references referring to contracts with insurance companies is not sufficient. I need something that specifically references group annuities.

Thanks in advance for any guidance.

Our plan makes payment of the monthly retirement allowance by direct deposit on the last day of the month. If a retiree dies in the middle of the month, the allowance for that month is pro-rated. A situation has arisen where the retiree died on the 25th of the month and we were notified of the death on the 1st of the next month. The retiree designated someone other than his current wife to receive death benefits, which would include the partial month payment owed to the member for the month in which the member died. Because of the death, we reversed the electronic transfer of funds, resulting in a hardshp to the current wife who "needs" the money to pay bills, etc. But, had we allowed the funds to remain in the amount, the current wife would have been overpaid and we would need to collect that overpayment from her at a future date.

Staff wishes to develop a policy that would prevent the system from reversing the electronic transfer until the survivor is notified of the reversal. We only have 4 days to reverse the funds and this policy would allow an opportunity for the joint account holder to "grab" the money before we can reverse the deposit.

Doesn't the system have a fiduciary duty to protect trust assets and prevent the receipt of funds by someone who is not eligible to receive the funds, regardless of the "hardship" that person may experience? My argument is that allowing the spouse to receive the funds and "pay us back" when we have the ability to prevent the funds from being deposited amounts to an illegal loan of trust fund assets. Your thoughts?

Since the last incident I sent in was two weeks ago and I still haven't heard from them, I'm just wondering if anyone else has asked Relius when the 2010 forms will be available. Apparently I can't use the 2009 forms for these and I have some terminated plans that will be due in August and just wondering if they hope to have them available by then.

James

Can an employer cancel benefits when an employee on FMLA does not pay the required employee contributions? We have an employee who has not paid their employee contributions for well over a month. They were sent a letter and payment coupons with the due dates listed on the coupon. The payment coupon also indicates that if payment is not received by the end of the month in which it is due that coverage will be terminated.