Question on testing a frozen cash balance plan:

If a Cash Balance plan is frozen for contribution credits, but still provides interest credits, are participants considered to be "benefitting"? I would think the logical answer is no, however if the plan were NOT frozen, I know the accrual rate is based on BOTH contribution and interest credits earned during the year. So there seems to be a contradiction in that interest credits are only counted towards accrual rates if there is also a contribution credit provided during the year. Is this correct?

How is everyone making out with efiling? What percentage of your plans have successfully efiled?

I was told that the DOL has received less than 5% of all plans so far.

So far we have had 4 of our clients receive letters from the IRS on their questionnaire project. We operate a small TPA firm and it seems that 4 out of the total 1,200 letters is an astonishing figure. What have other TPA's experienced with this?

A client would like to freeze their Plan instead of terminating it so that participants can continue to pay back loans. Would service for vesting also freeze? Can the employer unfreeze the Plan at a later date if they decided that the company will not go out of business? If so, how do you unfreeze a Plan.

I am trying to find out more about deemed IRA's (traditional or Roth) and if they are allowed within a 401 a?

I have found that the Economic Growth and Tax Relief Reconcilitaion Actof 2001 allows it, but I am meeting resistance

with the plan adminstrator. The plan adminstrator is saying that you can not have a Roth IRA within in a 401 a, so

I am asking for help to see whom is right in this instance.

thank you

Bryan

A client receives a late notice for their 2007 5500. One of the options in the notice is to complete Section 1 of the notice if the plan sponsor has already filed the return. In Section 1, the plan sponsor would indicate their Name, Address, EIN, Plan Year Ending and the last question asks, "Date filed with EBSA and Acknowledgment Plan Number number". Can someone please tell me what an Acknowledgment Plan Number number is? Also, the instructions do not request a copy of the return. Would anyone suggest sending a copy with the response. Thanks.

403(b) Plan filing Form 5500-SF. The plan has 403b deferrals, match and employer non-elective. Would the following codes be used?

2E for the non-elective ER $

2F for the 404© compliance on the product offered

2G for the fact the participant's all self direct their funds

2K for the match

2L for the 403b arrangement

I'm just wondering if the non-elective ER $ goes under the 2E code - Profit Sharing. Since it is a non-profit sponsor do we use this code or ignore the fact there is non-elective money?

What is everyone else doing out there?

What are the thoughts on excluding leased employees? Does 414(n) apply to a 403b? I know a 403b plan can only cover common law employees, however after the statutory one year and other leased requirements, the leased employee is treated as a common law under qualified plan rules?

Can I get some suggestions for search services? I know this has been covered before but the one that is most recommended - I can't remember the name - seems geared towards high volumes, with minimum fees. We need to search for one or two here and there...

If I will now submit forms in behalf of my clients (i.e., no one else will need to get to the forms online), then I presume that I don't need to use Webclient and there would be no advantage to using it?

Also, I would obtain EFAST2 credentials as what "Filing Signer" and "Transmitter?"

I wasn't sure if this was the correct board to post this on, but I couldn't find another spot that was more suitable.

I have a potential new client that is a hedge fund company. They have roughly 40 employees and do not currently have any kind of qualified plan. They are interested in a DC plan but want to offer funds within their hedge (that they manage) as plan investment options. This sounds like a prohibited transaction on its face. They realize that they would have to offer other investments to round out a diversified lineup. It made me wonder how brokerage firms handle a 401(k) plan at their firms. For example, if I am an employee at Fidelity, does Fidelity offer Fidelity funds as investment options within the plan? If so, how do they avoid PT rules and the fiduciary provisions of ERISA? It would seem that this is close to what my client wants to do.

Any help you can provide is helpful.

Hi everyone!

For those relius webclient users trying to submit EFAST2 filings.....has anyone had issues publishing multiple years for one client? I have updated the filing year in the plan info sheet but when I try to publish the 2nd year it just overrides the first year I published. (For example, if we have a 2009 filing and a final 2010 filing....the 2010 filing overwrites the 2009 filing).

I was hoping someone had a tip on how to get this to work or knew that there was a glitch in the system?

Thanks!

Vicki

A participant in a 401(k) plan currently has no designated primary beneficiary. The participant's mother has recently incurred costs for medical expenses.

Can the Participant designate her Mom as her primary beneficiary and then take a hardship distribution (i.e., make the change and take a hardship distribution after the particiular medical expenses were incurred)?

Hi All.

Hopefully some of you are still around and haven't taken off for the holiday weekend already. Because I have a real interesting situation. I have a prior PS plan that is 100% terminated, kaput, dead! Plan was terminated, all benefits distributed, no more filings required. Recently, a class action settlement occured with a financial provider which the Plan previously used. The Plan received a class action settlement check for a couple of thousand dollar (not significant money). What to do? I don't even have a plan to control allocation. However it is clear that this money would have been allocated to current participants if the money had been received when the Plan was active.

I appreciate any suggestions (and code cites) as to how to handle this situation.

Thanks!

Say a one participant plan has a pvab worth 50k and a separate rollover into the plan of 100k and he is 100% vested in his AB.

Does the rollover have the same requirements as his formula AB?

For example if he is under age 62 (i.e. less than NRA) and he withdraws 70k of rollover portion. Could it simply be a taxable distribution possibly subject to 10% tax? Or is it disqualifying premature distribution and prohibited transaction? Is it subject to spousal consent?

Like to think that the rollover could be treated separately, but don't quite think that is the case.

My understanding is that the value of the entire AB is 100k + 50k or 150k and that the maximum loan is 50k for this person. So a withdrawal of 70k could conceivably consist of a 50k loan and a 20k excess loan and if the total was defaulted then the first 50k could be a deemed distribution and the next 20k would be a deemed dist, a premature distribution and a prohibited transaction (since it is the owner).

Thanks.

I would like to know if a participant in a pension plan has a right to attend meetings of the trustees

We have a Cross Tested Safe Harbor 401k Profit Sharing Plan. The Safe Harbor is a 3% Non-elective contribution and discretionary profit sharing contributions are made every year. In going through previous plan years we found that the plan failed the Gateway Test and the Nondiscrimination Test under 401(a)(4) in 2008. In 2007 the plan passed the Gateway but failed the Nondiscrimination Test. Both tests were passed in 2009.

We have calculated what the contributions needed to be to pass these tests for both years not including any interest that will have to be paid. My question is how do we correct this? Is there a correction program available for this? And what penalties may we be looking at?

I really appreciate any guidance!!

I have a participant that is turning 70 1/2 during 2010. They are still actively employed at this time and are not now, nor were they ever a 5% owner so they need not take an RMD attributable to 2010 unless he actually retires later this year.

The plan allows for in-service withdrawals and he wants to use the ISW option to roll his entire account to an IRA at this time. The question that I have is, if he rolls his money over to an IRA now, what happens if he retires later in 2010. Will that not trigger the RBD in which case he will need an RMD for 2010 and the rollover that he did prior to his retirement now becomes the RMD (which can't be rolled over) since it was the first money out of the plan for the year?

Please let me know what I am missing.

A general purpose loan is taken with a 4 year term. Is it possible to refinance the loan to extend the term to 5 years in order to reduce the required payments? In Sal's book, it seems to be possible but I don't see an example of how it's done. Would it seem reasonable to take the remaining balance and amortize the payments over the remaining term plus 1 additional year? I appreciate any suggestions.

Client closed a location in 2009. Their attorney advised it was not a partial plan term. I don't know the numbers yet, but for purposes of this question, let's assume that is correct.

Atty prepared amendment to accelerate vesting to 100% for all participants at location that closed. Does this need to be BRF tested?