I don’t like EFAST2

How about you?

Maybe it’s the software or just my clients.

I will have to think this through.

The DOL said this would be easy

My software vendor said this would be no caper.

My clients just don’t understand.

I wish we could still use paper.

Loan balance of $20,000. Original date of loan is 2 years ago. Loan is repaid on Monday, so the loan balance is zero. A new loan is taken 1 week later for $20,000 and a new 5 year term is granted,

Discuss

Hello,

I've transitioned from a TPA to a financial custodian, and need to make sure that I'm reporting a return of excess Employer Contributions properly.

ISSUE:

A Profit Sharing Plan has been over funded. The Employer and his plan advisor are requesting the custodian to return the excess employer contribution to the Employer. The Employer is a Sole Proprietor and the owner is the sole employee and participant. (Also, the ER & TPA are aware of the issue of Form 5330 & 10% penalty tax).

QUESTION:

Does the custodian report the return of excess Employer Contribution as a taxable withdrawal to the Employer or to the participant using 1099-R code 8/P? Or is the return of excess PSP Contribuiton to the Employer a non-taxable, non-reportable withdrawal?

Thank You for all of your inputs

We have run into a number of cases where our in-payment status participant elected J&S. Participant subsequently divorces spouse (up to 30 years ago in one case) and does not have a QDRO. Are we required to payout to ex-spouse since the ex-spouse is no longer a qualified spouse and there is no QDRO? What happens when we can't find the ex-spouse (numerous searches, IRS letters, etc)?

We have had problems locating spouses of term vested participants who are deceased as well (they would be eligible for a 50%J&S upon reaching 65). What are our legal obligations to find these lost spouses?

Can the US win tomorrow afternoon? If so, how far can they go?

Interested in any thoughts or experience with the following situation.

Bank has a SERP subject to 409A that provides for accelerated vesting and lump sum payout of benefits upon a single-trigger change in control. Bank is considering a transaction which will result in a change in control. The Bank is a TARP recipient. The transaction would actually result in repayment of TARP simultaneous with or shortly following the CIC transaction. Under the Interim Final Rule (IFR), it appears the single-trigger CIC benefits would be regarded as prohibited parachute payments and thus may not be paid. This appears to be the interpretation even if the TARP amounts were repaid simultaneous with the CIC.

Under Section 30.14 of the IFR, the SERP benefits apparently would be ok if they they were double-trigger benefits (i.e., payout upon a 409A separation from service following a CIC). (CIC deal involves acquisition by non-TARP entity so the 30.14 exception would seem to allow double-trigger benefits.) All parties involved here would like to amend the existing SERP provisions at this time to provide for double-trigger benefits as all of the SERP participants are to continue employment.

The catch (22) here though appears to be that there is no way to amend the single trigger payout to a double trigger at this time under Code Section 409A. (The deal will happen within the next few months so there is no way to make a subsequent deferral election 12 months in advance of the CIC date--assuming that would work if timing permitted.)

As a result, seems the TARP rules prohibit receipt of the accelerated vesting and payout of the CIC benefit in accordance with the existing 409A-compliant single-trigger distribution provision while the 409A rules prohibit amending the payment date to track the TARP rule exception.

Has anyone dealt with this before or see some way around we are missing? Thanks.

I realize line 18 is not new for 2009. (It was a required attachment for the 2008 filings). However, now that it is a question on Schedule R-I'm puzzled by how this impacts a single employer DB plan. Has anyone had to respond to this for a single employer or multiple employer filing?

Thanks.

a flooring contractor is considering establishing a plan. He employees several Hispanics who will work on a job, then they may not work again for another few months. My thinking is that they probably would not meet standard eligibility requirements, but is there a procedure when terminating employees and then rehiring them that he could implement?

My client has dissolved his corporation as of 12/31/2009.

He still has a balance in his SOLO 401K (about $90k - he is the only employee) and is planning to rollover it over to his IRA on 06/30/2010.

The termination date will be 06/30/2010. Which form does he need to file 5500 EZ or SF?

He has 7 month to file it... which will give him until 01/2011. What will happen if the form for 2010 is not available by then?

Hi all. I have a Profit Sharing only plan where the client is now requesting that I amend the plan to provide for in-service/early distributions. The whole concept here is to get the money out and immediately roll it to an IRA which has an insurance product (possibly?) in it which provides for some sort of protective rider to protect against downside loss. Obviously the Insurance Agent is really the one who brought up this idea and is pushing it.

The HCEs in this plan are not 59 yet. However when I raised the issue of having problems just allowing distributions for apparently no reason, the Ins. Agent consulted another advisor whose position is that distributable events only apply to 401(k)s.

So the question here is - can you have distribution prior to age 59 1/2 for no reason from a profit sharing plan which are eligible rollover distributions?

I am just kind of lost on this because it seems odd to just be able to effect a distribution whenever you want one.

Help!

Thanks in advance for shedding any and all light.

What is the regulation with regards to the timing of a distribution to a deceased participant? Participant died in 2004 and there are still assets in the plan.

Thanks for your help.

Has anyone run across a provision in a money purchase pension plan that requires the participant to no long work in the industry for 12 months prior to receiving access to their benefits? The 12 month waiting period only applies if the participant is under NRA or early retirement age. I've heard of this for defined benefit plans, but never in defined contribution plans. Its a collectively bargained multiemployer plan.

Any know if such a provision is valid, and if so, what provision of ERISA applies?

The Plan Administrator elected a default investment. Assets were incorrectly put into a different "default" investment. The incorrect default investment meets the requirements for a "qualified default investment" but, of course, is not the one that was identified to participants. The incorrect "default" investment has performed better over time.

Any suggestions as to how to remedy this error? Thank you,

How do you typically handle health FSAs in a stock deal when buyer and target companies both sponsor FSAs? Do you convert balances and elections over to buyer's health FSA? Do you open enrollment for target's employees and let them submit new health FSA elections under buyer's plan? Not sure there is any legal authority that supports taking new elections but would be interested in hearing people's views on this. Thanks.

With the plan documentation requirement and 5500 reporting and audit rules kicking in for 2009 plan years, is it still possible to argue that sponsor involvement is limited enough for the plan to be exempt from ERISA?

Further, do any real benefits remain that flow from satisfying the exemption?

What should a sponsor consider when trying to determine whether or not to go for the exemption?

I'm off to study FAB 2010-01 and 2007-02 and would appreciate anyone's thoughts.

nevermind. thanks

I've worked for several TPA firms and over the years and I've learned there are things that are required by law, and things that are not required but are good practices of each employer.

1st Scenario

If the plan states that the Employer has the right to amend the plan from time to time, and then decides to freeze the plan, would a resolution to freeze the plan be enough to freeze the plan? Should the TPA then draft a corresponding tack-on freeze amendment? Or is it safe to include the freeze date within the restated document, simultaneously?

2nd Scenario

If the Employer chose to freeze the plan and signed a resolution as of 2009, but did not amend and restate the plan until 2010, which includes the freeze date of 2009 per the resolution, was the plan freeze done timely? Should there have been a tack-on amendment or restated document for the 2009 year to cover the freeze. Is the resolution enough?

We finally submitted our first Form 5500 filing with Relius Web client. It came back with a "submission failed". Under status history it showed the following:

"The list of errors/warnings below were accepted at time of signing:

No validations were reported."

I have an incident with Relius but it takes a while to get a response on the incidents due to the amount of calls they are getting. It said I need to contact technical support when I researched that particular issue.

Any ideas??

My understanding is that the electronic filing requirements only apply to plan years beginning on or after January 1, 2009. I just wanted to verify that for a noncalendar plan year ending 9-30-09 we can still mail the paper form and schedules. The 5500 due date was 4-30-10 and a Form 5558 was filed extending to 7-15-10.

Please let me know if I have this right. Thanks!

Plan provides that payout under performance-based comp plan that does not utilize STD exception provides that payments under plan are offset by any amount that service provider owes to company. The plan has other failures that are eligible for correction under 2010-6, but I am not finding any relief for this provision.

The appropriate correction would seem to be to simply eliminate the offset.

Anyone know how these are being handled or have any ideas?