I'm looking for an imaginative solution. In the 401(k) we manage (Acme Widgets) there are 2 owners, their sposes, and 2 unrelated employees. All employees defer into the 401(k) since inception in 2006. Here's the problem: one of the spouses made $8,333 deferrals in both 2007 and 2008. She also made deferrals into a 401(k) Plan ata bank she also works at if $15,000 in 2007 and 2008. We just fouk this out. She is under age 50.

Can anyone think of a corrective action that has the least adverse consequence?

Thanks to anyone who can come up with a good solution.

Any thoughts on possible ways to work the following scenario:

Company has long-time employee who has history of going out on disability (STD and LTD) and returning to work. Employee is about to go out on LTD again. Company likes the individual (sympathetic disability issues) but is tired of the back and forth and would like to terminate individual's employment. Company would give individual "severance" amount equal to 6 months salary in exchange for termination and signing a release, etc. Problem is that the severance payment would offset amounts to be paid under the LTD plan so company would like to delay that payment until individual's eligibility for LTD stops. Problem is there is no way to predict when the individual will no longer be eligible for disability. Plan provides coverage up to age 65 if disability continues. In the past, the individual was only on LTD for a few months and that is likely to happen again but there are no guarantees of that so it's theoretically possible (although very unlikely) that the payment could be delayed for a number of years--well past S-TD exemption and separation pay plan exemption requiring payment by end of second year following year of separation. I'm not seeing a clear way to exempt this or make this comply with 409A. Thanks.

I have found many helpful web sites that offer RMD calculators for "account balance" retirement plans. I have not located a similar site for defined benefit plans. Please let me know if you have found a web site that caclulates RMDs for defined benefit plans.

Thanks!

Back in 2006 a rollover was deposited into a plan, we just found out that that rollover consisted of monies from several different IRA's (SEP IRA, Conduit IRA, Traditional IRA and a ROTH IRA). Note this money came into a Qualified plan in 2006.

Participant wants to withdraw all his rollover monies now, my question is how do we go about doing the 1099R's for this? Especially since 2 of the rollover amounts should never have been allowed to rolled into the plan to begin with.

Thanks for any help you can provide.

I have a DB plan that started in 2005. Plan gives benefits to all employees. In 2008 the plan document was changed to give x% to class 1 employees and y% to class 2 employees. However the plan document also says that service prior to 2007 is excluded. Can you just disregard the '05 & '06 service for those employees who were employed during those years.

Saw the below post on another website but with no satisfactory answers- I have a similar issue- all comments appreciated....

I have a plan that is frozen w.e.f 1-1-2010. I am currently doing disclosure work for year ending 12/31/2009 and under FAS 88 I plan to show the effect of the curtailment. -

Gain due to the curtailment (basically PBO – ABO = $400,000).

Accumulated loss in AOCI = $ 2,000,000

Transition gain/loss = $ 0

Prior Service Cost = $ 0

So I adjust the curtailment gain against the accumulated loss and still end up with a loss of $ 1,600,000. Future service of actives is about 10 years

What are my options of amortizing this loss

(a) amortize it over the next few years (say 3-4 years)

(b) recognize the entire loss in this year

© other???

Client plans to terminate plan sometime in 2010 but nothing has been confirmed as yet on this. I realize most of these decisions are based on discussion with auditor/client but they don’t really have much to say on this topic. I’d like to know what others in similar situations are doing……….

The 5500 instructions seem to limit the commission information reported to insurance companies only, but what about a non insurance product with an insurance company (such as Nationwide Trust product). For that matter, commissions are paid on non-insurance groups as well (such as American Funds). Shouldn't these commissions be recorded on this line as well?

I realize that the Service Members Civil Relief Act (SCRA) states that if the loan is greater than 6% the service member can send a notice upon return from duty asking to lower the loan rate to 6%.

We have a plan sponsor trying to put a spin on this to say can the rate be lower than 6%. SCRA says the loan rate cannot exceed 6%.

My view is that this only helps if lets say the original loan is 9% interest and upon return from military leave he wants to reduce it to 6% this is ok. But lower than 6%??

A recently hired employee has medical from his former employer, a county gov't. I think this would qualify as an "employer-sponsored plan" and therefore be ineligible for pre-tax fsa treatment. Is someone able to confirm that that is the case?

Is anyone aware of a stututory reason (under the IRC) why non-US income is ineliglbe compensation for purposes of a DB plan subject to 401(a) and 501(a)? Our plan's definition of comp does not refer to 3401(a) or W-2 wages, (but I want to change that when we restate our doucment in 2010). 401(a)(17) does not seem to be specific about comp being limited to US compensation. Any help is appreciated.

Our company "demerged" from a company in 2008, however our plan participants remained in a multiple employer plan managed by the former company until the end of 2009. My question is as we set up a new 401k plan (new plan document under own tax id number) with board resolutions of effective date of 1/1/2010 plus plan document lists effective date of 1/1/2010 as a calendar year plan; however, the plan asset transfer for our group of participants was initiated on 12/31/2009 with an approximate 5 day period (technically 1-2 business days due to a holiday (1/1 and the weekend) in which the plan assets were "settled". This was a plan to plan transfer with the same recordkeeper & trustee (Fidelity). Based on the plan effective date, I have been assuming that we would not be filing a form 5500 until the 2010 plan year is due (7/2011) despite the fact that technically plan assets were transferred out of the former plan on 12/31 and eventually show as "credited" to the new plan on 12/31/2009.

Can anyone comment on whether this seems accurate? Our whole intention was to set up a new plan for 2010 going forward. The issue of the plan to plan transfer being initiated on 12/31 and eventually listing a transfer date of 12/31 seems to bring this into question or does it?

I am finalizing a December 31, 2009 end of year valuation. A 2009 AFTAP was issued by 9/30/2009 based on 2008 valuation numbers (since an end of year valuation). The client still has not made the 2009 contribution yet. When I send out this 12/31/2009 valuation can we do a revised AFTAP Certification based on the assumption that the minimum contribution will be deposited on 9/15/2010? (we would specify the amount of the contribution in the AFTAP Certification). This AFTAP would include the Funding Target at end of year (includes Target Normal Cost), the COB and PFB would be increased by the effective interest rate to the end of the year and the assets would include the discounted expected contribution. It would be revised again if the contribution is deposited on a different date.

Or would the 2009 AFTAP include the Funding Target (ignoring the accrual (Target Normal Cost) for the year) and actual assets as of 12/31/2009 (no contributions made so far for 2009) and the COB and PFB with interest (effective rate) to end of year. This is the way that it comes out of our valuation system

However, I read that the Schedule SB (line 15) must be the AFTAP certified for the plan year. I assume this would include the 2009 contribution. So if the last AFTAP last certified does not include the 2009 contribution then it is issued again once the 2009 contribution is deposited to match up with the Schedule SB?

We have a plan that has unallocated forfeiture money even though the plan was frozen as of 12/31/2007. I assume the amendment did not address forfeitures and neither did the recordkeeping system. At this point, should they be reallocated, and how? To all participants with an account on 12/31/2007 even if they have by now taken a distribution, or can we look at active accounts today?

Please help, I'm trying to help my elderly mother address an issue with late filed 5500s for 2006-2009.

My father passed away unexpectedly in 2007 from an injury just before the 7/31 filing deadline for 2006. My mother didn't know what she needed to do, and turned it over to their CPA who failed to file timely for 2006 and 2007.

My mother filed 2008 herself on an incompatible form (not machine readable).

2009 is now late as the business was discontinued and mother converted the plan to an IRA, didn't know that she had to file with in a certain time period from conversion, she thought she had until 7/31/2010 for the 2009 year. CPA didn't advise her on the filing deadline for conversion.

CPA is being unresponsive and penalties are mounting. The CPA did responded to a notice from DOL for the 2006 filing and has not heard anything back yet.

My mother received a CP213N from the IRS for 2007, which I am planning to reply to for her.

Since the Voluntary Compliance program doesn't cover "no employee", plans how should we proceed?

If the CPA was made the administrator, is she personally responsible for failure to file penalties for the periods under her watch?

I would be grateful for any advice.

Liz

Plan is cross tested (last day + 1,000 for PS allocation requirements), Davis Bacon off-set. Some participants received davis bacon contributions but term'd before end of year (greater than 500 hrs) so not eligible to receive PS allocation. A few received davis bacon ( say $4,000) and would receive allocation of PS of $1,000, so the DB covers PS; and a few received only PS contributions.

Question: How is testing for 401a4 done, which contribution amounts are included for testing purposes? Are all the participants with DB contributions in rate groups or only the PS contributions? Ugh...

Thanks for the assistance.

To anyone's knowledge, has the DOL formally or informally indicated that they will relax their no-sharing position on digital IDs so that a plan sponsor may give "power of attorney" to a third party to file the 2009 5500?

Can a plan sponsor charge a participant a "processing fee" for administering participant loans (submitting payments, etc.)? This same plan sponsor charges a "processing fee" for withholding child support payments and wage garnishment orders. If so, does it have to be within a specific guideline?

A Plan Sponsor changed locations from New York to South Carolina in 2009, and also changed Employer Tax Identification Number, and did not inform me as the TPA until after we mailed them their 2009 5500.

The 2009 5500 was never filed by the Plan Sponsor.

What needs to be done now to file the 2009 under the new company that is located ion SC with a new EIN?

A Plan Sponor has the Safe Harbor Non Elective Cont with a follow up Notice election in their Plan Document.

They amended the Plan in November 2009 to elect the 3% Safe Harbor Non Elective Cont for 2009 Only.

The Plan Sponsor just informed me that the company is in a critical stage of survival, and will not have the resources to fund the 3% Safe Harbor Non-Elective option of $35k.

What options does the Plan Sponsor have at this point?

What if they do not make the 3% Safe Harbor Non Elective Contributoon for 2009?

Any guidance is greatly appreciated.

ALEX

Here is an example: A participant participates in 2 plans that must be aggregated under the plan aggregation rules (plan 1 and plan 2). A 409A failure occurs in year X in plan 1 but is not discovered. Years pass and plan 2 is paid out according to its terms. Then the failure is discovered is plan 1 and correction is begun.

Must the plans be aggregated at the time of the failure in year X or at the time of the correction years later?

As a practical matter, to aggreate the plans at the time of the correction is a challenge bc plan 2 has been paid out and is "gone". However to go back and aggregate at the time of the failure seems to be an administrative nightmare.

Thoughts/guidance?

Thanks.