The Sieve was at the Tigers' game last night, and then stayed up half the night watching the replay of the final "out" over & over & over. My reaction at the time, without benefit of replay, was that he should have been called out on a close play like that for the final out of a perfect game. The batter later said that he expected to be called out based on the circumstances. Interesting, though, when you look at the replays: Carlos Guillen, at 2B, was right there, and could have made the play had Carbera (1B) stayed at 1st to take the throw . . .

We all expected that the perfect game was meant to be after the absolutely phenomenal Willie Mays over-the-shoulder catch in left center field for the first out of the 9th. Unfortunately, we were wrong.

"... And she and Billy Joe was throwing somethin' off the Tallahatchie Bridge."

Do you suppose it was a first base umpire?

to the tune "Do you remember these" (Statler Bros) - ok, maybe nobody remembers this one, but I was inspired a bit by someone groaning about e-filing, so I 'dedicate' part of the 3rd verse to him!

a music file is enclosed - to make the file work you have to rename from .rpt to .midi, but I have to beat Mr. Baker's system of uploading attachments somehow - at least I think this will work

you probably have to be catch-up eligible to even understand this one.

well, ok, I only had time to come up with 3 verses so far on such short notice, maybe someday I'll dream of more.

10 year cliffs, class year plans, and the rule of 45,

Five to fifteen year vesting really made those plans alive

Laid off just before you’d vest, but that’s the way it goes-

Ah, do you remember those?

No EGTRRA, no USERRA and what the heck is GUST?

No top heavy requirement was placed upon the Trust

No self-direction, default funds and why disclose the fees

Ah do you remember these

Fifty-five hundred C or R, there’s No e-file 2

hand filled forms sent in by mail, that’s all that we need do

no nondisrim, no 410-b, we didn’t dream of GATT,

ah do you remember that?

Employee elected 15% in January 2009. This somehow didn't get printed in the payroll office and the employee never mentioned that his deferrals never started. This comes to light in May when he is talking to the financial advisor and his account balance is zero.

We are being advised that the proper corrective action is to fund his account with 50% of the deferrals that should have occurred and 100% of the missing match, adjusted for any growth. Is this correct? I thought I read something about missed deferrals being at the average rate of the ADP test or something like that, but it's very likely that I misunderstood or that that is for something else.

Thank you.

Our client sponsored a DB plan for several years and then acquired another entity. They froze their plan timely in order to avoid covering any of the employees of the new entity. Now after several years, the plan has become somewhat overfunded. The current benefit formula is pretty low (i.e. the 2 owner/participants are well below the 415 limit), so the overfunding can be eliminated by amending the benefit formula, but they have a rather large staff now and do not want to have to provide benefits to staff in order to increase their benefits.

They aren't looking to close the plan right now, so the overfunding is not a problem just yet, but they want to know if there are any other options other than providing benefits to staff or paying the excise tax should they need to close the plan in the future and it is still overfunded. Do they have any other options?

When an existing company establishes a 401(k) plan, does it have to count service for eligiblity purposes for periods prior to the effective date of the plan for those individuals not actively employed with the company on the effective date of the plan but rehired at a later time?

Facts are as follows:

Company has been in existence awhile. It sets up a 401(k) Plan effective January 1, 2010. Plan includes basic 1 Year of Service requirement for eligibility. Plan SPD provides that "in determining whether an indiviudal satisfies the minimum service requirements to participate in the Plan, all service the individual performs for the Employer will generally be counted."

On January 1, 2010 there are a number of regular employees that have been employed with company continuously for a long time. They all have a Year of Service based on their prior service and begin participating in the Plan immediately. The company also has some seasonal summer employees--some of whom come back and work multiple summers. During the summer, the seasonal employees may work 1,000 hours or more and so would earn a Year of Service for participation purposes. My question is when do these seasonal employees enter the Plan.

In particular, if the company had a seasonal employee that worked the summer of 2009 and earned 1,000 hours that summer--does that employee have to be permitted to participate in the Plan June 1, 2010 (upon return for 2010 seasonal work) or does that individual have to earn 1,000 hours in the 2010 summer season (i.e., the first period following adoption of the plan) before getting into the plan?

No dispute that the seasonal employee would be entitled to participate June 2011 if he returns in 2011 after working 1,000 hours in summer 2010. Just not sure if they get in right away based on service earned prior to the time the plan went into effect when they were not a current employee on the effective date. (Note, I have also seen plenty of guidance that indicates prior service must be counted for active employees in place on the effective date as well as plenty of guidance regarding the need to track prior service for rehires that previously worked during periods when the plan was in place but this is a different question.)

The plan document does not seem as clear as it might be on this point because it speaks in terms of employment commencement dates and tracks eligibility based on computation periods starting on the employee's employment commencement date. The Year of Service definition in the Plan notes that "the initial computation period shall begin with the date on which the Employee first performs an Hour of Service (employment commencement date)." The seasonal folks arguably have multiple employee commencement dates though (i.e., they come and go each year) so question would be which commencement date counts and does first hour of service mean first hour of service once the plan has been adopted. In particular, do we look at the first commencement date beginning after the effective date if the individual was not actively employed on the plan's effective date?

I was told that the statutory test is generally not enforced. The same source indicated that, in practice, these plans have been held to be nondiscriminatory if the same benefit is available to all eligible employees.

For example, say $5,000 is available to all employees. All employees are eligible, but only 10% of employees utilize the self-insured medical benefit at all. Since less than 70% of all employees benefit, it appears the plan would be found to discriminate. However, according to my source, if the IRS audited this plan, they would accept it as nondiscriminatory.

What do you think? By the way, of the 10% of employees that do utilize the plan, an overwhelming majority are non-HCEs.

Looking at Reish and Reicher's website, 404© is specifically meant for individual account plans that can have participant investment direction. Reish and Reicher say that means qualified plans. Can it apply to 403(b) also? I would think so, but does anyone know any differently?

db froze in 2008. combo plan, is the minimum still 5% in the DC plan (except for new employees who aren't participants in the DB?

My Company filed a form 5330 for 2010 about 1 month ago, but it appears we have some additional corrections. Can I just send in another Form 5330 with additional corrections?

The SB instructions provide, "On an attachment to Schedule SB, list the rate of retirement at each age and describe the methodology used to compute the weighted average retirement age, including a description of the weight applied at each potential retirement age, . . . "

A plan provides for unreduced early retirement at age 62 and 20 years of service. The retirement assumption is that participants retire at normal retirement age (65) or otherwise when first eligible for an early retirement age. This statement describes the methodology. However, the weights are dynamic and not an assumption but rather a function of the participant demographics.

Are those with analogous provisions providing the "weights" (i.e., w% at 62, x% at 63, y% at 64, and z% at 65) and if so, are the percents weighted by benefits or liabilities.

We administer a DB plan that is PBGC covered. There are 98 participants in the plan. The plan sponsor plans to purchase annuity contracts for all the participants since lump sums are not paid (and they do not want to amend to allow for this option). There are some participants in pay status and some active and terminated participants with deferred benefits. Benefits are frozen as of 12/31/2004.

We plan to choose August 15, 2010 (or 8/31/2010) as the plan termination date (due to the 60 day notice). Can the plan sponsor purchase the annuity contracts before the plan termination date? If so how can we file the Form 500, etc. with 0 participants as of the plan termination date?

Any thoughts?

I searched the forum trying to find something regarding this topic and couldn't find anything, so here is my question.

I have a profit sharing plan which has a graded vesting schedule according to the plan document as

0%, 20%, 40%, 60%, 80%, 100%

But for the past three distributions, the participants were all vested at 100%.

Clearly the plan sponsor did not following the plan document. Can she retroactively amend to change the vesting schedule to 100%, since no benefit was taken away from the other participant's?

(any forfeiture would have gone toward the employer contribution).

And what if she wanted to keep the currect vesting schedule, would there even be a fix since none of the participants were affected? (They each have their own segregated accounts).

I looked at rev proc 2008-50 which explains how to fix vesting problems but this is only if the distribution gave too little! In this case the distributions were too much.

thanks for any thoughts on this.

A charity's president signed a vendor's "Plan Establishment Form" in 2008 thinking it was a 403(b) plan document. It was not -- it lacked the items required by 403(b) regs like eligibility and benefits description. So they had no plan document as of 12/31/09 as required.

I know the IRS is coming up with a retroactive amendment correction program if sponsors adopt a new 403(b) prototype when that becomes effective but Announcement 2009-34 says that relief applies only to periods after 1/1/2010. The relief does not apply to the 2009 tax year (the first year when a plan document was required). So for the 2009 year, we had no document. I'm thinking the charity needs to go through VCP to correct the 2009 year. My question -- has anyone done this already?

A tax exempt entity currently has a 403(b) plan. The sponsor would like to add a match, but only for some of the employees, but it would be quite expensive to pass ACP tests.

If we set up a top hat 457(b) plan for HCE matches, will that remove the need for ACP testing in the 403(b)? HCE's would still defer in 403(b).

Are there any problems with this combination?

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