If a partner in a plan receives a K1 which represents a return on an investment and not compensation for services, should he be included in the ADP test? Does it mater on how the partner reported it on the K1 and 1040? If so, when would such partner become an Employee for testing purposes

Just curious as to what other TPA firms out there do as far as following-up and maintaing executed (signed) documents both initial plan documents and amendments/restatements.

We have a hard time getting signed copies back on a lot of clients and spend a lot of time following up with them, but I'm wondering if this is needed. Doesn't the plan sponsor have the legal reponsibility to maintain (store) the executed documents.

I'd appreciate hearing what other TPAs do on this and whether you state the responsiblity in your service agreements or in some other written form. Thanks in advance.

Client wants to terminate an underfunded non-electing church DB plan. I was going to recommend that the client submit a 5310 FDL application, since the most recent FDL is from the 1980's. But will the IRS refuse to issue a favorable letter because of the underfunding? The plan is exempt from Title IV but I'm wondering if there's anything in the pre-ERISA qualification rules that the IRS might hang its hat on to require full funding as a condition for a favorable letter.

A plan has 100% vesting right now, all HCEs are under this schedule and all NHCEs. To change vesting to a 3 year cliff, you could do this for new hires as of July 1. There is no cut back in vesting. However I believe you to test the plan under BRF testing. As long as the prior better schedule covers at least 70% of the NHCEs then you are ok correct? IF not then you can run the nondiscrim class. test and use the safe harbor %.

An employer who is negotiating a new CBA doesn't want to get tagged for withdrawal liability, so it is trying to negotiate a situation in which it has to pay in as little as possible to the pension fund under a new CBA by restricting eligibility. This employer would obviously like to avoid a finding of a partial withdrawal under a 70% decline. Is there any way for an employer to ensure that it isn't going to run into this problem negotiating a new contribution obligation under these circumstances? Is it going to have to hire an actuary in order to determine whether a bargaining proposal triggers this liability?

Prohibited transaction occurred when loan made to disqualified person. Disqualified person does not have sufficient funds to repay the outstanding loan balance. May disqualified person take an in-service distribution for which the person is otherwise eligible, and then use the funds from that in-service distribution to repay the loan?

Grew up in Michigan, listening to the Detroit Tiger ballgames with my dad.

I don't think my dad ever missed a game.

ah the memories

as an 'ignorant' little kid, wondering how the heck Ernie knew, when a fan caught a foul ball, that the person was from some obscure little town.

'complaining' because the color man in the booth was leaving peanut shells all over the scorecard

a strikeout was often "He stood there like the house by the side of the road and watched that one go by"

when the Tigers were behind, it was "Here comes Vince Desmond, the old run maker"

and his "back, back, back, its looooooonnnngggg gone" for a homer.

an excellent broadcaster, but more importantly, a good honest man!

Confusion: Can you have a 412(e) Plan with 100% life insurance? I thought the 412(e) plans had to follow the 74-307 rules and limit life insurance to 50%. Also what about a group life or annuity contract?

I didn't think you could have either (100% insurance, and a group contract). If you can have a group contract - how do you pay particiapnts out when terminated and adjust the contract?

I always thought 412(e) Plan was 50% insurance (or less) and annuities, or 100% annuities. I also thought they had to be individual contracts also.

Thanks

We have a former client who didnt send in the 2006 5500. They want to file it now. Do they have to do it electronically?

They got a letter from the IRS about it and they can not file it thru the DFVC program because they were already notified by the IRS.

Just want to know if they file electronically for a previous year 5500 when it is late.

Thanks

All,

Although the concept seems obvious, does anyone know of a good cite (law/regulations/other IRS/Treasury guidance) for the following proposition:

A failure to operate in compliance with the terms of a 401(a) qualified plan will cause the plan to fail to be qualified, even if the failure is with respect to a provision other than a tax qualification provision, e.g., loans, hardships, payment of benefits in installments when payment should have been a lump sum.

A cite to the Code, Treasury regulations, or another piece of IRS/Treasury guidance would be very helpful.

Thank you!

I cannot find any guidance about what constititutes "retirement" under 401(a)(9). I doubt that some nominal onging connection with the employer would be sufficient to avoid starting required distributions, but where to draw the line?

While on the subject, once required distributions start, could they be suspended if the retired participant resumes employment at some acceptable level?

If an employee with an outstanding loan balance terminates employment, is there any requirement that the loan be paid within a certain time period, say 60 days, or is this up to the plan. IOW, if the plan allowed it, could the former employee continue to make the regular, level payments over the remaining period of the loan?

Couldn't find anything addressing this in 1.403, 72(p) or Pub 571

Thanks

BruceM

Is there such a thing as a 401(a) plan that only accepts DROP money - which I believe is rollover money from a state defined benefit plan when an employee retires. I believe a money purchase governmental 401 plan can ACCEPT DROP rollover money. But you still need a written plan and a fixed MPPP contribution correct? Can the plan have a 0% MPPP formula and thereby only accept DROP money?

Not sure of the advantage of this arrangement versus the employee just rolling the DROP to an IRA?

Any thoughts?

Have a situation where we have a one person money purchase plan set-up in the 80's. Plan has never been amended. Participant dies leaving behind his wife as beneficiary. Issue is the plan has never been amended and missed a year of RMD's prior to death. Anyone have any experience with a plan with defects that is orphaned? If you correct under VCP, do you update the plan document? Who signs?

Thank you!

Could someone recommend good testing software for a section 125 plan, ideally in a controlled group environment? If not, even a worksheet that I could use to test? Thanks.

It has always been my understanding that deferrals could be made from Severance Pay or an Early Retirement Incentive provided it was paid no later than the pay period that began prior to severance from employment. I realize deferrals can not be made post-separation, as they can be made from unused sick and/or vacation pay, if paid timely. Also understand that the election would have to be made in the month prior to when the deferral would be made. However, I can not find anything that specifically would allow for it other than it is not specifically excluded.

Any ideas?

Thank you in advance for all assistance.

A plan was restated, effective 1/1/2005 and executed in March 2005. Subsequently, the plan adopted multiple amendments in 2007 and 2008.

This is a Cycle A individually designed plan. It is my understanding that the restatement period began on 2/1/06 and ended on 1/31/07.

Would the restatement have to be signed within that period of time, so that, because it was signed a year before the cycle began, it was not effectively restated for EGTRRA?

Just Downloaded today's released 2010 SAR program> Tried generating SAR but although loaded received error message that 2010 Version must be loaded before running SAR. If anyone else has similar issue and gets return call from RELIUS before I do (several days according to service desk operator), please share "fix". I will do same.

What are the benefits of an advisor to a current 401K plan to the organization as well as to the individual participants?

A doctor leaves one practice to join a new one. Both before and after leaving the practice, the doctor compiled a list of patient names from memory. The doctor disclosed this list to the new practice and the new practice sent out a generic notice announcing the new doctor's services to the patient list.

Did the doctor violate HIPAA when the doctor disclosed a list of patients that had been treated at the previous practice to the new practice for the purposes of the new practice's marketing? It is clear under HIPAA that a hospital or health care practice may send out such a generic notice to its own patient list. This situation seems a bit different because the patient list came from the old practice. Did the doctor need to get authorization from the patients before sharing the lists with the the new practice?

If the doctor did violate HIPAA, is only the doctor liable for possible civil monetary penalties in the case of a complaint to the Secretary, or might the new practice be liable as well for using the list?

Any insights would be appreciated! Many thanks!