I wondered if anyone else is having this problem. If no one else is, it may be our software provider (which we are checking) but if others are, it may be a DOL problem.

Is anyone getting error codes P-227 Plan Admin USERID & PIN are missing or invalid, or I-104 Plan Sponsor's USERID & PIN must be provided, Processing Stopped? When we check the PDF on the DOL website it appears to be signed by the Plan Administrator.

When we call the DOL they are telling us "something must be wrong."

Any thoughts?

An attorney, working with his widowed client, discovers that the retirement plans, Profit Sharing and Money Purchase Plans, that her husband was a participant in had never been amended or restated since inception, February 1977.

Husband was a doctor and only participant in both plans. Someone else administered the plans for him. This person died, and no one else kept up with the amendments and restatements.

Form 5500 EZ was filed annually by his CPA and is up to date.

Widow would like to roll the balance from the two plans into her IRA.

Should the attorney apply under the VCP to correct and bring the plan into compliance before the balance is rolled over into the widowed spouse's IRA.

Or since it was a single participant plan, is there another means of correction.

I would appreciate in guidance on this issue.

Thank You

So, who else has heard late summer for the release of the EZ? This is according to the DOL. What is everyone doing? Waiting I suppose? using the 2008 form, SF (not a good option)....

Just want some thoughts.

Thanks.

As always, the ability to bounce ideas here is appreciated. Here's the scenario:

Plain profit sharing plan has a limit of the amount deductible under Code Sec 404. For 2008, the plan receives more than 25% as a contribution (FWIW, this is totally and completely the accountant's fault) and we allocate the 25% and carry over the rest. (Yes, the client and accountant were advised of the need to pay a penalty on the overcontribution.)

In 2009, the plan was restated onto an EGTRRA document that has no limit, other than 415 limits for the participants. No additional contributions were made. The carryover is less than the combined 415 limits, but more than 25%. I think from the plan's perspective, we can (must) allocate that carryover contribution in 2009 (it happens to be going to one NHCE; the owner had no comp)...and get on with the plan termination, which is next.

There would be an additional penalty in 2009 for the remaining overcontribution, and honestly I'm not sure if that theoretically hangs on forever if the plan goes away or what, but I don't see it as my problem.

Does anyone see problems for the plan and its qualified status if we follow this path?

A small doctor's office was recently sold to a large hosptial. The office has a 401(k) plan with new comp. The plan termination date was set as 3/31/2010 (calendar year plan). No one is receiving any compensation after that date.

While the 3 employees all have W-2 comp. for 1/1 - 3/31, the doctor does not have a set salary. I believe he does take "draws" but normally it is later in the Spring when the claims/insurance goes through and he can be paid.

The Plan is a non-elective safe harbor plan. He would like to try to do new comp. for the 2010 short plan year. But what would he use for comp? Do we just add up his draws? Can we use a good estimate based on either 2009 compensation or estimated on 2010? Can he not do this at all?

Thanks for any help.

Am I correct that a plan that has a past service liability will never be able to use a prefunding balance in the second year to reduce their contribution because the prior funding percentage will always be less than 80%?

My client's plan used one year of past service to create a funding target, funded enough to cover the funding target and target normal cost for that year and elected to create a prefunding balance based on the contribution in excess of MRC. Now in year 2, they have a PFB, but can't use it. Is that correct or am I missing some sort of exemption that would apply here?

I know this is an easy question but I'm frazzled today -

Participant waived 1st RMD due 04/30/2010. To compute the RMD due by 12/31/2010...I still use 26.5 from the uniform table and the last val balance so in essense it's the same $$?

This issue was raised on the 'IRAs and Roth IRAs' board in the hope a Roth conversion might offer a solution to the potential double taxation problem it presents. That now seems unlikely. It is being repeated here to garner a broader 401k perspective.

A 401k profit sharing plan is maintained by an LLP. A Partner in the firm executed an elective deferral agreement when first eligible a number of years ago authorizing reductions equal to the annual Section 402(g)(1) limit and additional annual profit sharing contributions have been added to his account up to allowable maximum. However, annual K-1 statements issued on the Partner's behalf have never reflected these amounts and Partner's accountant never took them into account in figuring taxable income. Consequently, these amounts have de facto been made with after-tax dollars.

Amended returns will be filed for open tax years. The problem is what, if anything, can be done (now or in the future) to avoid being taxed a second time on allocations made doring the closed tax years when distributions ultimately occur?

I work for a tax-exempt organization. I have made pre-tax contributions to a 457 plan for the last 9 years. I am leaving the organization at 05/31/2010. I understand that the assets in my 457 plan become taxable when I separate from service. My questions are as follows:

1. My contributions are invested in various mutual funds held in trust. When the plan assets are distributed can ownership of the mutual funds be transferred from the organization to me or do the investments have to be liquidated and cash distributed to me?

2. If the mutual funds can be transferred, how/when will they be valued?

3. Regardless of whether distribution is made in mutual funds or in cash, the value of the investment will very likely be more or less than the original contributions. Is the difference between the value of the investment (or cash) and the original contribution amount treated as capital gains or loss for tax purposes?

4. Since my social security and medicare wages were not reduced by my pretax amount contributed to the 457 plan, I assume that the distributions will not be subject to FICA. Is this correct?

Thanks for any information you can provide at this confusing time.

A "standard" profit sharing plan with Mar 31, 2010 plan year end. 2009 Form 5500-SF for Apr 1, 2009-Mar 31, 2010 plan year filed on Apr 30, 2010. Plan terminated effective Feb 28, 2010. All plan assets should be distributed to participants (3 total) in May 2010. Company intends to dissolve in late June 2010 after final tax return is filed (by Jun 15, 2010). Thoughts on filing final Form 5500-SF.

1. Can the final 2010 Form 5500-SF for Apr 1, 2010-May 31, 2010 be filed after June 2010 if company is already dissolved (no company/sponsor, no company official), assuming 2010 Form 5500-SF not yet available. All plan assets were distributed prior to company/sponsor dissolved, short plan year ended prior to company/sponsor dissolved, but signing/filing date will be after company dissolved.

2. Can we use the 2009 Form 5500-SF and change the plan year dates on the form and file the final Form 5500-SF prior to company dissolving, if necessary to sign/file while company still active.

Any thoughts or ideas are appreciated.

A participant terminated in late 2009. They turn 70 1/2 in October 2010, hwoever, they would like to take a distribution now, before they have reached age 70 1/2. Must they take part of the distribution as an RMD and the remaining portion is an eligible rollover distribution? Or has the liability for the 70 1/2 RMD not been incurred yet since they are not 70 1/2, and thus no portion of it is subject to RMD? My thinking is that the RMD liability has been incurred already since the amount would actually be based on the participant balance at 12/31/2009, but have not found a definitive answer yet. Thoughts?

I have a Profit Sharing plan that is not Safe Harbor and is not top heavy. Owners worked <1000 hrs. and my Relius system did not allocate forfeitures to either owner. I thought this was correct, but our financial advisor feels because they are owners they should receive an allocation. I could not find a direct answer to this in any plan documents. Normally, owners hours are left blank in census, but this past year, their actual hours were entered. Any comments would be greatly appreciated.

We have been receiving IRS notices in regards to our client's 2007 and 2008 filing. We receive the correspondence because it is part of our procedure to file the Form 5500 using our address as we are a bank and are appointed trustee of the plan for most of our clients. We have tried to get in contact with our client in order for them to file the forms and respond with a reasonable cause but they have been unresponsive. Now the IRS is wanting them to pay a hefty penalty. Im thinking my next step is to contact the IRS and have them start sending the notices directly to our client. Any suggestions?

Participant in the WGA (Writer's Guild of America) DB plan makes $500,000 a year from writing.

The WGA plan funds a projected benefit using that income of $125,000 a year at NRA 65.

Can a separate DB plan be set up for the writer to fund the difference to the 415 limit using that income?

Any issues?

Thanks.

I understand that a distribution to a beneficiary from a 401(k) plan due to the death of a participant prior to age 59 1/2 is one of the exceptions. But can someone clairfy for me that a participant who dies at age 45, his spouse receives the proceeds from his retirement account and rolls it into an IRA. Subsequently, she needs to take paymetns from this account in order to supplement her income. Are these payments also exempt from the 10% Penalty. The spouse is also age 45. I believe the answer is yes, but I am hoping some one will clarify that this is correct.

Do the relative value disclosures apply to money purchase plans?

I am doing plan termination calculations – Early retirement eligibility is age 55 and 10 years of service. All those participants who are already eligible for early retirement are easy to handle. What about those for e.g who are 55 and have say 8 or 9 years of service, should we assume that they would have become eligible for early retirement had the plan continued to exist. Who all do we give this consideration to? Or do we just take a call that anyone currently eligible for early retirement will get the benefit of early ret and amend the plan doc to state likewise. I realize that a lot of the plan termination calculations depend on what the plan doc says but just wanted to know what most other people have done in their experience.

TIA.

I've heard that employer health plans that are not changed might be grandfathered around Obamacare until something like 2018, but if the employer modifies the health plan before then, that the grandfathering is lost and that the plan must comply with Obamacare around 2014.

We'd like to change our deductibles, but not if that would cause an earlier application of having to comply with Obamacare than if we don't make the change.

Does anyone know details about this?

Hello all -- My first post to this forum, though I've been a reader for a little while. The following question has come up with a potential client that I hope to hear some opinions on.

They had an small, old, deferral-only 403(b) with one mutual fund company (that no longer works with 403b plans, of course) that they stopped allowing deferrals to before 1/1/09. A new 401(k) was created. They don't have a plan document for the 403(b). I believe that some current staff have directly rolled their old 403(b) into the new 401(k).

My question is this: What's the best and most cost-effective way to get their situation up to speed. My sense is that they'd be able to adopt a model non-ERISA 403(b) plan doc and terminate it all at once, right? Is there a model doc around that non-profits might use? And the doc should includes language on termination options for staff to roll their 403(b) accounts over to a new 401(k). What would a corrective fee be for this late adoption? I believe they've tried to contact all individuals to let them know about the prior 403(b) ending, though they couldn't require a rollover to the new 401(k).

Thanks for any thoughts or for pointing me to any other posts on this site that address this issue.

Company contracts for employee's services for a one year period of time. At the end of one year, the employee is not offered any other position. The employment comes to an end.

Is the employee entitled to the subsidized COBRA premium?