A new plan starts 4/1/2009 - 3/31/2010. HCE defers $20,500 during the period 4/1/2009 through 12/31/2009. HCE defers $15,000 between 1/1/2010 and 3/31/2010. Is it possible to allocate a profit sharing contribution of $24,500 such that the employees' total allocation would be $60,000 of which $5500 was catchup for 2009 and $5500 was catchup for 2010?

Can someone expound a bit on what, if anything, makes it necessary to file a 5500 for a welfare benefit plan for a company with less than 100 participants? Specifically regarding the instructions on page four of the 5500 instructions under the heading "Do Not File A Form 5500 For A Welfare Benefit Plan That Is Any of the Following:"

Is it really just as simple as there is a Cafeteria Plan, there are fewer than 100 participants, therefore we don't need to file a 5500? I see some potentional pitfalls in the instructions regarding the regulations, code, and a technical release that I don't fully understand.

Thanks

Hi,

In the past, I seem to recall that the IRS allowed an employer could use the IRS model form only if it did not maitain any other retirement plan and had not maintained a defined benefit plan at any time in the past. I cannot find this last requirement regarding defined benefit plans in the 5305-SEP instructions or elsewhere. Is it still true? If so, where would I find it.

Thanks for your help.

Does Schwab offer participant record-keeping services? If not, what are options for TPAs that don't do daily record-keeping? Thanks.

A person terminated in 2007 and had an outstanding loan. The participant never took a distribution. 90 days later we defaulted the loan in our system but never requested the 1099 at the trust company for the defaulted amount. We just discovered this! What is the proper procedure to fix this? Can we issue it now for 2007 and the participant has to file 3 years of amended tax returns or do we issue it as of 2010??? Any guidance would be greatly appreciated. Thanks

Age weighted plan has 3 NHCEs (age 56, 60 and 52) and 1 HCE (age 70). NRA is age 65. 401a4 testing is bombing.

What options are there to pass the nondiscrimination testing?

Thanks!

I understand that some states require that if a participant's beneficiary is his/her spouse, that designation is automatically revoked upon divorce.

Would appreciate your sharing how you handle this operationally.

Thanks.

A quick question. The only contribs made to a Plan are Catch-Up contribs made by a Key Employee. No contribs are made by Non-Key's during the year. More than 60% of assets in the Plan are in the Key EE account. Does the Catch-Up contrib trigger a Top Heavy allocation to be made to the Non-Key EE's?

A friend told me he would pick us up at 6:43PM to go to dinner. He pulled this number out of the air because I commonly state weird pick-up times ("I'm a round number iconoclast"). 643 has somewhat interesting properties, I observed.

643 is a prime number.

13 = 6 + 4 +3 is a prime number

7 = 6 + 4 -3 is a prime number

5 = 6 - 4 + 3 is a prime number

67 = 64 + 3 is a prime number

61 = 64 - 3 is a prime number

37 = -6 + 43 is a prime number

There may be other prime numbers that can be formed by the digits 6, 4, and 3 while respecting the order but 6:43 was approaching so I had to put my pencil down.

Our company is a TPA and I am the trustee of TPA 401(k) PS Trust. Along with two other plan clients, we invested in a Multi-Lender first trust deed transaction. The property went into foreclosure and the three unrelated retirement trusts now own the real estate. We plan to rent it for 5-7 years, then sell the property. In the meantime, there are lots of costs associated with managing real estate. Repairs, taxes, insurance, on-site property manager, etc. I told the other two plans' trustees that I would be willing to serve as an unpaid property agent, receiving rent from the on-site property manager, and paying bills, and making distributions to the 3 owners. To do this, I need to set up a bank account.

Question: am I allowed to set up the bank account in the name of the TPA 401(k) PS Trust? I would then make distributions to the other two trusts as positive cash flow allows. Or does this violate the standard trust document found in most plans, which requires that the trust hold assets only for the beneficiaries of the TPA 401(k) PS Trust? On the one hand, my duty as trustee is to safeguard the asset partially held by my trust, and safeguarding includes facilitating careful management. On the other hand, the only explicit language I can find permitting commingled trusts is when a single employer sponsors more than one plan.

Any thoughts?

I know you can "borrow" from your IRA for 60 days and as long as the money is returned BEFORE the 60 day period it's not a taxable distribution. What if the person did not return it to the IRA but instead deposited it into a Qualified Retirement plan before the 60 day period was up?

Would that still be OK?

Doug

Participant retires in 2010, the year in which she also attains age 70 1/2. She is requesting a direct rollover of her PS Plan balance to an IRA.

Must she receive her 2010 RMD from the Plan before her rollover is processed? Or, since she could defer her initial RMD until 04/01/2011, could she, instead, opt to have her 2010 RMD paid from her rollover IRA?

A client terminated their PBGC covered cash balance plan effective 7-1-09. The client informed us that all distributions occured prior to 12-31-09 and provided copies of the checks. Forms 1099R were prepared for the distributions for 2009. While completing Form 501, the client informed us that the last check was actually cashed on 2-4-2010. The owner had held onto his distribution check, made a deposit to the plan in 2010 to fully fund his benefit and cashed his check at that time. We certified on Form 501 that the last distribution date was 2-4-10.

1- I am preparing the 2009 PBGC filing. For my participant count at 12-31-2009, do I need to determine the number of participants whose checks hadn't cleared and use that as my count or can I say that there were no participants who whom the plan had a liability on that date because the checks written were an accrued distribution?

2- Would this be the PBGC final filing for the plan? The form asks for the date of the event that ceases the filing obligation. I would either have to enter 2-4-10, which is after the filing year, or the date the last check was written, which wouldn't coincide with the date certified on the Form 501.

3- Can I file a final 5500 for 2009 or will I have to file a 2010?

If we are a "nonamender" and have an operational failure are we to submit an Appendix D and an Appendix F? Doesn't seem very streamlined. Also, would the nonamender fee cover the operational failure?

I have a plan that someone wants me to take over. The prior actuary has a monthly pension and accrued benefit at age 70 of $22,431 as of 12/31/08. The compensation was always been at the max allowed ($230,000, $225,000, $200,0000, $210,000 etc). Since the plan uses a 3 yr avg. the monthly pension EXCEEDS the salary 3 yr avg of $18,194 as of 12/31/08.

I'm a "401(a)" person, so pardon my ignorance -

Are there now 403(b) "prototype" documents available for adoption by sponsoring employers? If so, I would appreciate any info as to providers of same that any one is willing to offer.

Thanks!

Can someone expound a bit on what, if anything, makes it necessary to file a 5500 for a welfare benefit plan for a company with less than 100 participants? Specifically regarding the instructions on page four of the 5500 Instructions under the heading "Do Not File A Form 5500 For A Welfare Benefit Plan That Is Any of the Following:"

Is it really just as simple as there is a Cafeteria Plan, there are fewer than 100 participants, therefore we don't need to file a 5500? I see some pitfalls in the instructions regarding the regulations, code, and a technical release that I don't fully understand.

Thanks

I have a plan which ihas basic match safe harbor formula. This year profit sharing forfeitures are to be reallocated. I understand this takes the plan out of the top heavy pass. The reallocation of forfeitures is on a comp to comp basis or 1.07% of pay to both HCE and NHCE employees. Does an additional amount need to be deposited for those participants who do not receive a safe harbor match to reach the 3% top heavy minimum or does the 1.07% suffice? Thanks

Participant left employment due to disability, received a distribution of appx. $90,000. A W-2 was issued and in box 12, code "Z" was used. CPA is doing the participant's tax return and is questioning if there is an exception to the 20% federal tax because of the participant's disability.

Any input / citations would be greatly appreciated. Thanks!

I represent a multi-employer welfare fund that allows self-payments by participants if they are short hours to qualify for active benefits. Some of the guys are laid off and qualify for ARRA, but then they pick up some hours and it is cheaper for them to pay the self-pay (which is based on the number of hours you are short of the active benefit requirement). Can they go back and forth between ARRA subsidy and the self-pay depending on which is cheaper? I don't think so based on the fact that there isn't another involuntary termination to trigger the ARRA subsidy. But I was just wondering if any other multiemployer plans have dealt with this.

Thank you.