If a plan sponsor has attempted to file a Form 5500 on EFAST2 via an approved 3rd party vendor software package, and they receive the status of "Filing Stopped", does that mean they are considered to have filed before the deadline? Their forms are showing up on the search function under EFAST2, and, according to the chart on FAQ#39, it indicates that "Processing Stopped" (assume that is the same as "Filing Stopped"?), it is considered a filing.

When I called the EFAST2 hotline, they told me that this client had to amend by the original filing deadline or the DOL would consider them missing the deadline. This client does not want to file a Form 5558. So we now need to work with them to amend within the next few days!

Has anyone else run into this situation? Did you get the same answer from the hotline?

Does anyone know who to contact to obtain a previously issued copy of an IRS VEBA opinion letter? The letter was issued sometime back betweek 1987 and 88 and we cannot locate it.

We're going back and doing EZ's potentially to 2000!!

1) Is there a basis for only go back say, 6 years, based on the statute of limitations?

2) Is there any basis for just filing a bunch of 2009 forms with all of the various dates on them? I doubt that we'd even be able to track down say the 2002 form...

I'm working on a plan that defines compensation for profit sharing allocation purposes by reference to compensation that is subject to payroll withholding, i.e., IRC section 3401(a). Generally speaking, Form W-2 Box 1 amount.

The sponsoring employer is an S corporation. The sole stockholder is also an employee of the S corporation.

Now that the value of health insurance provided to the S shareholder/employee must be included in Form W-2 Box 1 amounts for S shareholders/employees, is the value of the health insurance included in the S shareholder/employee's compensation for profit sharing allocation purposes?

What do you do when the expense submitted was over a year ago? Is there a time limit for approving hardships distributions? What do other practioners do, is it an internal procedure that you need to establish as to how old an expense can be?

This is an ERISA 403b plan using the IRS safe harbor standards.

Thanks!

plan sponsor is a member of a controlled group but maintains its own stand alone plan. an employee terminates his employment with the plan sponsor and goes to work with another member of the controlled group. the plan says you do not have a separation from service if you are working for a related employer. i am thinking the employee does not have a separation from service even though this related employer is not participating in this plan and thus the employee can not receive a distribution. am i correct in my thinking?

Have a 401(k) Plan with a Profit Sharing Accont (no match)

Joe terminated was paid his deferral, but was 0% vested in his PS account balance.

Joe came back to work after being gone about a year.

According to the document he comes back in as of date of rehire and want to have his forfeited PS account reinstated.

1. The plan document states that he has to repay his entire vested balance. I assume that this includes his deferral.

2. If he repays his deferral, I assume again this is after tax money. Putting it into his deferral account, once he terminates again - this money would then be taxed again????

Seems like if the above is true, he should wait until he is vested before he repays the 401(k) money due to the double taxation.

I have been doing 401(k) plans a long time and have never had anyone want to repay their balance. (I can see why he might want to as the PS was large enough to want to get, I just would wait as he has five years to do it.

(Vesting is 3% cliff)

What do the rest of you think???

Thanks for your help.

Pat

Hi,

I have a client that seems to think that deferrals for the owners of a corporation can be deposited at any time. SHe just informed me that if there is a cashflow issue, then she would always deposit the employees deferrals timely but that her own were not deposited until there was enough cash. She receives a w-2 and has 401(k) withheld with every pay period. Her 401(k) deposits are made whenever there is cash. When I tell her that this is not correct she says that she is not harming anyone.

Is she correct? I don't believe the regs distinguish between employee 401(k) and owners 401(k).

Thank you!

I have received conflicting advice on available amounts for hardship after a loan.

A participant has an account balance of $22,000, this includes a loan balance of 10,000, so actually account value is 12,000. Therefore after deducting the loan balance and covering the 50% this would leave the client with $2,000.

So is the participant eligible for a hardship of 2,000 or are they eligible for 12,000?

Thanks.

I just saw this allocation formula... why does this not seem right?

1 hour for accural.

Group A Allocation: 10,000 if employed from 1/1 to 3/31. 20,000 if employed from 1/1 to 6/30, 30,000 if employed from 1/1 to 9/30 or 40,000 if employed from 1/1 to 12/31.

Can anyone help clarify what is meant in FAB 2009-02 that states:

The contract or custodial account is legally enforceable against the insurer or custodian by the participant alone, without any

employer involvement

I'm hung up on the "legally enforceable" part. Does this mean that the conditions and terms of the account are between the participant and the insurer and that the particpants does not need or require employer involvement in regard to any ongoing or future transactions in the account?

If the employer has to sign off as the Plan Administrator for loans and distributions, would that not meet this condition?

Thanks

403(b) plan had allowed for both EE and ER contributions. In 2007, the plan was frozen. No new participants entered and now new contributions can be deposited.

I have the asset information for 2009. As of 1/1/09 125 participants had balances. As of 12/31/09 117 had balances.

Per Field Assistance Bulletin 2009‐02, individual contracts or custodial accounts that meet all of the following requirements do not have to be reported as plan assets (or in the participant count) on Form 5500:

1 The contract or custodial account was issued to a current or former employee prior to January 1, 2009;

2 The employer has no obligation to make any contributions (including salary deferrals) to the contract or custodial account after

December 31, 2008;

3 The contract or custodial account is legally enforceable against the insurer or custodian by the participant alone, without any

employer involvement; and

4 The employee is fully vested in the entire contract or custodial account.

Items 1 and 2 are obviously met. #4 is true also. #3 I am almost certain of.

So, if all 125 contracts met this exemption, then I have zero participants to report on the 5500. Would you agree?

Also, if that is true, would I still file a 5500, showing zeroes or would I not have to file a 5500?

Thanks

The U.S. Department of Treasury has announced that employers currently using paper federal deposit coupons must make payroll deposits electronically beginning in 2011. Does this apply to deposits of withheld tax on distributions from retirement plans?

Prototype basic plan document contains failsafe language for plans that do not satisfy the minimum coverage requirements (ratio percentage). Generally speaking, would this provision only apply to employer nonelective (e.g. profit sharing) contributions? Could the failsafe also be used for an annual match? The plan I am testing has an annual match with a 1,000 hour requirement and last day rule and fails ratio percentage. The failsafe language is pretty standard - first group is to include employees who worked at least 900 hours, second group is 800 hours, etc. My question is can I bring in employees who belong to the group that I need to use if they did not make a deferral (and therefore are not eligible for a match) to satisfy coverage. Thanks.

A participating employer in a multiple employer plan withdraws from participation and starts a "new" plan as a single employer. If assets from the MEP are transferred to the new plan, do you have to protect benefits? IF it is part of a sale/acquisition such that there is a distributable event - ie termination of employment and then hired by new entity and rollovers go into new plan, I assume the answer would be different?

1) have the company buy the shares from the plan, thereby reducing the number of shares?

2) leverage the ESOP?

The plan did not make a contribution for calendar year 2009.

Suggestions?

Employer failed to make a SH and PS contribution for plan year 2008 by 9/15/2009. The contributions were made in March 2010. Must the employer restore lost earnings to the plan for these late contributions?

We do now know yet if they took a deduction for the contributions in 2008. If so, they would need to amend. Also, the PS contributions were not "discretionary" per se, since they also have a DB plan and the PS contributions were required for the plans to meet the combined Gateway contribution.

A participant completed his primary bene election as 100% to his wife and 50% to his son - then his 2nd son as 50% under contingent - he most likely meant to name the 2 sons as 50 / 50 contingents....

Anyway... our firm did not audit the incorrectly completed bene form completed by the participant - we scan for our files and then forward the original to the client...

The client rec'd the form and was very angry / upset that we did not audit the form to see that 150% was named as primary and that the form should be re-completed....

What do others do with bene forms? Do you audit them for accuracy / correct completion? Do you catch obvious errors and return for completion of new forms? Or do you touch them at all and instead forward directly to the client for them to review / store?

Thanks!

Looking for opinions --- our CPA firm is auditing a 401(k) plan administered by a large insurance company. When reviewing the payroll records and the plan document, it came to our attention that three different companies are participating in the plan, two of them are related and one is not related to either of the other two companies. The plan document does NOT contain any provisions for participating employers and, in fact, most of the contributing employees are not employed by the company sponsoring the plan.

Upon bringing this to the attention of the insurance company, they felt this was a minor issue and could be corrected by simply adopting an amendment to have the other two companies be participating employers.

Any opinions?? I am not an auditor, but am a TPA and I would think this is material enough to warrant EPCRS attention using VCP or self-correcting and submitting for a FDL.

For any auditors out there ..... what would you do from an audit standpoint regarding disclosures or even with respect to issuing a report???

Thanks.

James

Does the HEART Act apply to NQP plans?