I have had an incident in with Relius for over a week with no response yet, so I am wondering if anyone else has had this issue. I have had several clients submit their 5500's through Web Client and receive a follow-up email saying the filing status was now "processing stopped". However, when I go to the DOL Efast website and search 5500's, their 5500 shows up and is there to view. So, my question is .... is this just an issue with Web Client and should I consider my clients good to go if the 5500 shows up on the DOL site???

Last night, I had 4 clients get a new status of denied. Those clients are not showing up on the DOL site. However, I can not tell what is wrong as the Web Client is showing no errors in the processing status report.

I'm getting pretty fed up with this whole process. It has been a fiasco. I hate to say it, but EGTRRA restatements were a heck of a lot more fun than this garbage.

Have an end of year valuation for 2008 (as of 12/31/2008) and switched to beginning of year in 2009 (as of 1/1/2009). The amount of the excess contribution for the 2009 Schedule SB line 11a is carried forward from line 38 of 2008 Schedule SB. Line 11b wants the effective interest rate for 2008 to add interest to this excess contribution.

I believe that they would be no interest added to this amount since the carryover from 2008 is as of 12/31/2008 and the values for the 2009 Schedule SB is as of 1/1/2009. I am using Relius and if I put 0% it gives me a warning that if cannot be blank if 11a has a value. If you put the effective interest rate in 11b it adds a year of interest. Am I missing something?

Using Relius Government Forms to do a Schedule SB. Does anyone know of a problem with filing with EFAST2 for the following warnings from the Relius validation check;

if 20a is yes (funding shortfall) it is looking for a response to 20c(1), 20c(2), 20c(3) and 20c(4) even though less than 100 participants. I believe this should be left blank;

Line 34 is coming up with a message that it is not adding up correctly. The math is correct but it still comes up with a warning;

Line 22 (Weighted average retirement age). It looks like it is looking for an attachment if there is any value on line 22. If the retirement age is 65 and and everyone has a retirement age of 65 do you need to do an attachment?

Defines change in control as sale of 70% of the business.

Clearly the % is OK, but could be ambiguous because it could be interpreted in a noncompliant way. For example: could have a series of asset sales over a period longer than 12 months, such as 20% sale 1/1, 10% sale 7/1 and 40% following 2/1, which are stepped together to hit 70%.

Is this problematic or should the definition be amended under the document correction program?

if the plan is a new plan, effective 1/1/2009 but was not submitted by April 30, can it still be submitted today for an EGTRRA letter?

Has anyone heard of vesting defined as being employed on the last day of the year- here is wording from the SPD.

"Core contributions are 100% vested after you have completed two years of vesting service. You are credited with a

year of vesting service on each December 31 in which you are employed."

Is this a form of elapsed time?

Thanks

Need help understanding Permissive Aggregation.

Employer Sponsors three Plans.

Total Work Force in Division A & B is 53

2 HCEs and 25 NHCEs in division A

1 HCEs and 25 NHCEs in division B

Plan 1 - Safe Harbor 401(k) Plan for EEs of Divison A (satisfies 401(a)(4) on stand alone basis)

Plan 2 - PS Plan for EEs of Division B

Plan 3 - Cash Balance Plan for EEs of Division B

Can the employer elect to aggregate Plan 1 with Plan 2 to satisfy 401(a)(4) - Rate Group General test

Thanks for your help in advance

A 403b plan has a participating employer who is being acquired by another entity. The affected employees will no longer participate in the plan. If new employer sponsors a 403b plan, can the new employer mandate a plan to plan sponsor from prior 403b plan into new employer's 403b plan or is this transfer at the participant level only? Is there such thing as a 403b spin-off?

Thanks

PS assets are in group contract.

Our ESOP makes distributions in a single sum, but we want to change to installments. An exception under the regulations allows an ESOP to eliminate a single sum with respect to benefits subject to 409(h)(1)(B)...

My concern is that 409(h)(1)(B) suggests that the plan must make distributions in stock (not cash) in order to be able to rely on the exception in the regulations. Our plan makes distributions in cash, not stock. Should I not read this literally so I can use the exception under the regulations to be able to make distributions in installments rather than a single sum? Any thoughts would be greatly appreciated!

I have a new,small client who was Top Heavy for 2009. The owners deferrred $600 and $1800 in 2009 before being notified that they would fail ADP testing. The Top Heavy min is for 2009 $4000. They want to know if they can reverse their 2009 deferrals so that no TH min would be required. They are an LLC taxed as a partnership and they have not filed for 2009. They think they can just "reclassify" the deferrals.

Obviously, this is not a mistake of fact. They just want to avoid the TH min contribution. Can they do this?

Assume a long term incentive plan provides for payment by March 15 following the end of a three year cycle but provides for earlier vesting (but payment date does not change) due to Disabiltiy (assume 409A compliant definition). Does this mean that this plan can not meet the short-term deferral exception even for those who never become disabled? Assume that a disability occurs only once every 10 years. Does that matter? I can see an IRS argument that becuase the plan provides for the "possibility" of a payment that won't be a short-term deferal (if a disability occurs for example in the first year of the cycle), there can be no short-term deferral but this does not seem like the right answer to me.

Same question but assume instead of disabiltiy that earlier vesting (but not payment) occurs at a separation if the participant is retirement eligible (say at some combination of service and age)? I would argue that as long as the participant would not be eligible to retire prior to the third year of the cycle, that particpant's award would qualify as a short-term deferral.

Any thoughts? Thanks for any insight.

Hello all,

I have a client who is a partnership with 3 partners. Each of these partners receives both K-1 and W-2 income. No comment on the appropriateness of that - it shouldn't be possible but it happens all the time.

In any event, both the 401(k) plan and the partnership are on a calendar tax year. All three partners made deferrals from their W-2 income. Now the plan is terminating effective 6/30/10.

For the purpose of ADP testing, would you say the testing compensation is zero (because earned income is deemed to be paid on the last day of the tax year, which hasn't been reached) or the W-2 compensation through the date of plan termination? Obviously the client would like to to avoid refunding all their deferrals for the year due to 415 issues.

Any help is much appreciated!

Dog

We have an employee who has family coverage (he covers himself and 3 children) and now wants to add a domestic partner. Would there be any after tax cost and imputed income on covering this DP since he is already at the family coverage tier. There is no other tier available.

Lets say that prior to 1/1/2010, a company had a bi-weekly pay period. Starting on 1/1/2010 and going forward, the pay period switched from bi-weekly to semi-monthly (paid on the 1st and 15th of each month).

Participants make loan payments through payroll deduction. What happens to the amortization schedule when the pay period switched?

Should participant receive a new amortization schedule based on the outstanding principle due? Does the participants need to sign new loan paperwork because the terms of their original loan paperwork have changed? If the reamortized schedule calls for larger payments, and the participant has been making payments amount on the original schedule, what happens? Any other issues/thoughts?

Thanks!

If a plan currently uses target date funds with a 10 year spread and now are adding a 5 year spread, can defaulted participants be moved into a more appropriate 5 year fund without giving a 30 day notice? The sponsor is giving a notice, but want to make this effective 7/1 so will only be a 2 week notice.

I am not finding much written about switching from one QDIA to another mid year.

Any thoughts?

A partnership of 6 dentists is going to end, as one of them is now retiring. A new LLC will be formed by the remaining 5 to continue the dental practice. The old partnership will continue to exist only to collect accounts receivable. All dentists and staff will go to work for the new LLC on July 1.

The old partnership had a profit sharing plan (no 401k feature). The new LLC will set up a new 401k plan.

Question 1: would all those with benefits in the old profit sharing plan have a severance from employment for purposes of Code section 402(e)(4)(A)(iii) since they no longer work for old partnership? Any citations would be useful.

Question 2: if no 'severance from employment', could the old profit sharing plan be terminated in order that all of the benefits under that plan could, at the individuals' options, be rolled into IRAs? Again, any citations would be helpful.

DB plan year is 7/1-6/30. Plan termination date is 4/15/10. Participant is claimiing retirement benefit as lump sum payable 7/1/10. 2009 AFTAP is above 80% but less than 90%. What are the rules with regard to AFTAP calculation (if required) after plan termination but prior to distribution of assets upon plan term which probably won't take place before 12/1/10? Thanks.

I am looking for a confirmation of my understanding based on 2009 5500 changes. Have read through the Form 5500 instructions for 2009. Assume plan is unfunded and fully insured, over 100 lives, provides life, AD&D and disability insurance benefits. Appears Form 5500 (SF version not permitted) is required to be filed, w/ Schedule A attached. No IQPA requirement. File Sch C, D and G only if required based on the situation. Pretty much same as before. I just want to make sure I'm not missing something big, as I do very few of these. Appreciate any assistance.

I am used to seeing plans set up for cross testing using named allocation groups in the plan document. When it comes time to fund the contribution as of the tax return due date, the group method is followed and tested as stated in the plan - is 1. Owners, 2. HCE non owners, 5. Dept Heads, 6. Rank and File. So you have clear allocation groups set forth in the plan.

However, how does it work if each participant is in his own group? Is this much flexibility allowed, whereby after the plan year has ended, the employer could change what they wanted to give to the HCEs lets say depending on the last minute plan design needs, or could create or delete certain allocation groups and merge into another group if that would work better.

This seems to allow too much discretion. How is this method usually used by a TPA?

I appreciate your help!

If you represent an employer that seeks to avail itself of the Early Retiree Reinsurance program, what amendments would you suggest should be made to your group health plans covering such early retirees?