This has been an absolute nightmare. We submitted the initial QDRO to the plan administrator for approval in December 2009. Several weeks later, they approved the QDRO and my attorney sent off the QDRo signed by the judge. This was in late January. In March, I contacted the plan and they said it had to be "reviewed" by their board and there are 32 QDROs ahead of mine. Now it's almost June and I can't get a straight answer out of any of them. Are they allowed to just hold onto it even after it was approved?

I understand things do take time, but this is frustrating. My attorney has called them several times and have not had any luck. Does anyone have any ideas?

A DB plan provides for the 5 year rule for payment to a non spouse beneficiary.

If say a participant dies on July 1, 2010 at age 65 (i.e. < RBD) can the adult child beneficiary choose to roll over the death benefit (act equiv of pension) of 100k to an inherited IRA prior to 12/31/2011 and begin receiving payments over their life expectancy?

Say this same individual has an IRA could the IRA become an inherited IRA to adult child and be paid in same manner as above?

Thanks.

A DB plan provides for the 5 year rule for payment to a non spouse beneficiary.

If say a participant dies on July 1, 2010 at age 65 (i.e. < RBD) can the adult child beneficiary choose to roll over the death benefit (act equiv of pension) of 100k to an inherited IRA prior to 12/31/2011 and begin receiving payments over their life expectancy?

Say this same individual has an IRA could the IRA become an inherited IRA to adult child and be paid in same manner as above?

Say in the case of the DB plan above the child waits until 2012 to roll over the death benefit into an inherited IRA account. Does this mean that the inherited rollover account must be distributed by 12/31/15 and be subject to tax and the 10% early payment penalty if child is under 59 1/2?

Thanks.

Georgia requires that each year, a copy of the Form 5500 be filed with the Georgia Department of Revenue. I was unaware of this requirement which, they tell me has been in place for many years. They also said that if a plan has not complied with this requirement, they need to send in at least the last three year worth of 5500 to the DOR. Is anyone familar with this requirement? Are there any other states that have a similar requirement?

PAL

The calendar year defined benefit plan was under 100% funded as of 1/1/2009. Quarterly contributios requirement based on the 2009 results were communicated to the client. All 4 quarterly contributions were made for the 2010 plan year by 4/1/5/2010. Since client made the maximum contribution in 2009 and asset earned 50% during 2009, the maximum deductible for the 2010 year is $0.

What are our options? Is there excise tax payable to the IRS?

The question is: what are the legal cites that govern the procedure regarding how a Registered Investment Advisor (RIA) can offer client references? Specifically, an RIA that is registered with the SEC, not an individual state (as individual state laws may vary on the topic).

In this day and age, clients asking for references is a critical component to doing business and is typically expected. However, what are the rules pertaining to RIAs providing references? Do the confidentiality/privacy practices established by the Gramm-Leach-Bliley Act of 1999 govern how this process is handled? An RIA simply cannot hand out a list of client references blindly; I would suspect that, at minimum, an RIA must ask permission before doing so. So what are the legal citation(s) governing how this is done? Gramm-Leach-Bliley? ERISA? Investment Advisor Act of 1940? Securities Exchange Act of 1934? SEC rules? DOL EBSA rules / interpretive bulletins? Buried somewhere in the CFRs?

Have a participant that has a primary residence third party loan. They want to borrow $50,000 from the plan so they can refinance the third party loan from the bank. They will not be withdrawing additional cash when they refinance with the bank. Can the loan from the plan be amortized over 5+ years? Looked in the regs and it's a little unclear.

We took over a plan, and here's what they do (and have been doing for several years, and allegedly passed audits):

-Each employee gets $500 to spend on health insurance benefits,

-If people opt out, or if they have lower insurance premiums, the $500 (or the remainder of the $500) is deposited to their account as profit sharing.

We're thinking no CODA b/c the employee never has the option to receive it.

Let's assume they were on a volume submitter document, each in their own group, and therefore no restrictions on the number of allocation groups.

My biggest problem with this is that it seems to fail the requirement that a plan have a definitely determinable allocation method, since the allocation includes these other varaibles (i.e., the insruance premiums and the amount of this stipend).

Do you think a favorable determination letter would ever be granted for a document that includes this allocation method specfically?

Our plan document states that our matching contributions are based upon W-2 compensation.

However our match (4%) is being calculated by weekly pay period.

I've suggested that we perform a "True up" for all that participate in the plan but our "administrator" is telling me that a true up would require the company to provide a match (4% of annual compensation) to any employee who had contributed any money to their 401K plan.

In other words:

Employee A (earning 100K) contributes $16,500. to their 401K during the first twenty weeks of the year. The current system "matches" their deferral with $1538. A True up would add $2462 totaling to a match of $4000.

Employee B (earning 100K) contributes $100 the first week of the year and decides not to save anymore. The current system matches their deferral with $77.00. According to our administrator the true up would match and add $3923. Even though Employee B only contributed $100.

Could this be true?

Thanks in advance.

P

Need help updating this book.Lance:

Need soneone to update this CPE book Contact Lance Wallach lanwalla@aol.com

Following you will find the description for the last issue (2006) of our Audits of 401k Plans CPE program. Please keep in mind that the description was for this particular program. A new author may choose to redo the program in some other way or write a new program altogether.

Generally Accepted Auditing Standards and Generally Accepted Accounting Principles apply to employee benefit plans. This program assumes that the participant is reasonably knowledgeable in the fields of accounting, tax and auditing to the extent necessary to identify issues with the Form 5500 pertinent to the audit.

The purpose of this program is to assist the independent qualified public accountant (IQPA) to properly conduct the work necessary in the audit of 401(k) defined contribution retirement plans. The materials are designed to help the auditor identify important issues in the process of the audit. This material assumes that the reader is reasonably knowl­edgeable of generally accepted auditing principles (GAAP), generally accepted auditing standards (GAAS), ERISA and the IRC as it relates to 401(k) plans.

Thus, rather than a general discussion of GAAP and GAAS standards, ERISA law and regulations, and the tax code (which would easily take up many volumes!), this material focuses on and attempts to meld together the unique ERISA and tax issues involved in the accounting, tax reporting and ultimately the auditing of the financial statements of 401(k) employee benefit plans.

Since most practitioners will deal with single employer sponsored 401(k) plans, the materials focus on single employer sponsored plans.

At times, comments on multi-employer sponsored 401(k) plans will be made when applicable to the discussion. A multi-employer sponsored 401(k) plan should be treated as a single-employer plan for purposes of reporting to the regulatory agencies: DOL and IRS, and sometimes the SEC.

This program is divided into seven (7) chapters, two (2) appendices and a topical index. Chapter 1 provides some background information on 401(k) plans. Chapter 2 concerns planning a 401(k) audit. Chapter 3 focuses on internal control issues associated with 401(k) plans. Chapter 4 discusses audit issues associated with 401(k) plan financial statements. Chapter 5 reviews additional 401(k) plan audit issues. Chapter 6 discusses the financial statement disclosures related to a 401(k) plan. Chapter 7 provides information on the auditor’s reporting requirements for a 401(k) audit. Appendix A is a glossary of terms related to 401(k) plans. Appendix B is a quick reference to Form 5500, who files and what to file.

Upon completion of this program the user should be able to: (1) understand the basic features of a 401(k) plan; (2) understand the general features, administration, reporting requirements and opera­tions of 401(k) plans; (3) define the general reporting requirements for 401(k) plans; (4) understand the requirements for 401(k) audits: full scope and limited scope; (5) identify risk areas, plan and conduct 401(k) audits more efficiently and effectively

Be aware of and avoid typical audit and reporting deficiencies; and (6) recognize new tax, accounting and regulatory developments affecting 401(k) plans and their effect on the audit.

A client recently received a notice from a fund company regarding a 403(b) plan they maintained several years ago. A single individual still has an account, but is now missing. This is considered a "dormant" account, since it has had no contributions since at least 12/31/2008.

We cannot find confirmation one way or the other whether we need to file Form 5500-SF, 5500-EZ, or no filing at all. Any opinions?

If my 1/1/2009 AFTAP is above 94% but the FTAP is below 80%, am I required to burn enough of the carryover balance as of 1/1/2009 to get the FTAP to 80% for 430 purposes?

I was just contacted about an employer who has 125 employees with pay over $5,000 in 2009. Last week 30 employees were still deferring into this Plan.

Does anyone have nay ideas about correcting this?

I think they should stop all deferrals to that Plan now and will need to call these after tax contributions to an IRA when they do w-2s for 2010.

Anyone else have any ideas?

In the old days (5, 6 years ago) when a participant terminated employment, a plan trustee could simply send an instruction letter to the investment provider and it was honored.

We now have a small DB plan termination with all benefit elections properly executed. We would like to prepare an instruction letter for the trustee to sign and forward to the investment provider. The letter would say please make a check payable to XXXXX Trust company FBO Mary Smith etc. However, the investment provider is telling us they can only make checks payable to the trustee. They then recommend these checks be deposited into the corporation checking account and then disbursed to participant's or their IRA's.

We even offered to have a signature guarantee on the trustee instruction letter, but the investment provider will not accept that.

Anyone run into this situation? Seems not right to deposit plan money in a corporation account and then make distributions.

An employer has a 401(k) plan with a match. The plan states that a match is calculated per pay period.

I know that the plan sponsor has to transfer the elective deferrals to the plan in a timely manner. But what about the match?

Can the plan sponsor hold on to the match for a longer period of time? I know some plans don't even calculate a match until the end of the plan year.

When is the deadline to submit the match to the plan? Is it the end of the next plan year? Is it based on the employer's tax filing deadline?

Can a tax exempt 457(b) plan forfeit a participant's benefit if they are terminated for cause? We are talking about employer contributions (not sure if that makes a difference). It's an odd situation. The plan provides for full and immediate vesting, but allows a forfeiture for termination for cause.

Participant turned 70 1/2 in 2010, so first distribution would be based on account balance as of 12/31/09. Here's where it gets complicated:

His account balance was only 27,401.32. That amount includes a 2009 deferral of 22,000 and earnings on that 22,000. He is self-employed and his income for 2009 ended up being a loss, so we had to withdraw the 22,000 plus earnings in 2010 (because you cannot have a deferral if you don't have any income).

The record keeping system is calculating his 2010 RMD based on a balance of 27k. Should we calculate this by hand and use a balance of 27,000 less the 22,000 deferral, less the income?

It is a confusing case and hope this detail makes sense.

If the IRS has sent out anotice saying that the Form 5500 is late and that a penalty will be assessed, can the plan sponsor participate in the DoL's DFVC program and get a waiver of the IRS penalty?

That is, can they get a waiver of the IRS penalty if the participate in the DoL program after they've received notice from the IRS? or is there no hope because they already got the letter from the IRS?

I just wanted to verify - a step child would NOT be counted as a Child for attribution/ownership purposes unless legally adopted, is this the understanding?

Here is the situation:

Determination of Top Heavy for 2010 (as of 12/31/2009), I have 2 persons who are 1% shareholders but did not earn the required compensation in 2009 to be Key Employees. However, these same individuals were also 1% owners in 2008 and did have greater than the required comp in 2008 to be considered key employees as of 12/31/2008 for TH calc (for purposes of the 2009 plan year). This is not a safe harbor and neither of the 2 individuals took a distribution in 2009.

My question is this: for the 12/31/2009 test (which applies to 2010), are these 2 individuals included as Key EEs even though they earned less than the 150K comp requirement in 2009? I thought that they would be treated as 'former key employees' and their balances excluded from the 12.31.2009 test altogether. TPA is saying that because they were Key as of 12/31/2008, they are automatically KEY for the 12/31/2009 test in spite of the fact that for 2009 they both earning less than $150K.