Here is the situation:

The profit sharing component of a 401(k) Plan is not passing the ratio test for coverage. The Main populations ratio is 68% and the "otherwise excludables" ratio is 3.25%. Average Benefits would help the main group, but obviously not the "otherwise excludable" group. My question is, can we run the Average Benefits tests not disaggregated for the sole purpose of running the ratio test for the profit sharing piece not disaggregated? Or if we run the Average Benefits test not disaggregated, does that mean we now need to run all testing not disaggregated?

Any thoughts would greatly be appreciated!

A not for profit organization offers a 403(b) plan and a for profit organization does not sponsor a plan, but is is 80% or more controlled by the trustees or directors of the other organization. It seems clear to me from the final 403(b) regs. that you have a controlled group. First, am I reading correctly that the IRS wants an analysis to be done to see whether a not-for-profit and for profit are in the same control group? If so and they are in fact in the same control group, how do you test and what do you do if they fail? I would think universal availability wouldn't apply to a for profit organization b/c they cannot offer a 403(b) plan. Do you have to then offer a 401(k) plan to the for profits? That can't be what the IRS meant.

Thank you!

We have an off-calendar year 401(k) "church" plan. In 2007, the plan allowed for in-service distributions from all accounts at age 60. In 2008, we recieved our updated software for EGTRRA. New questions were added based on the update. In error, in 2008 the restated plan limited in-service distributions to elective deferrals only at age 60. We reviewed the plan with the ER line by line - literally. They signed the document. In error, the administrative software was not updated to limit to elective deferrals only - although that's what the plan says. The employer is now telling us that they did not want that provision changed and it always should have been all accounts at 60.

Clearly we as the recordkeeper have to take ownership. They have a prior determination letter. We're having a difference of opinion internally on how to correct the problem.

Some of us feel that this is an operational failure it's been less than 2 years, and we should amend the plan to comply with operation using (SCP).

Others feel that we should use VCP, and we should make-up almost $100,000 of the restricted money that was distributed. (Keep in mind the plan has immediate vesting and they would have gotten that money anyway.)

Others feel that this is clearly a scrivner's error, because the administrative set up matches the ER's intent and the SPD's both allow for all contributions.

What is correct?

Is there any way to exclude a non owner dentist from TH and let him defer in a Sole Prop?

Details are as follows: The plan was amended in 2007 to exclude non owner dentists. When I took over the Plan late summer, I did not get this amendment. So I told him he could defer. When I went to do cross testing, I called the attorney who drafted the doc to see if there was any provision to put him in his own group. Yesterday, I saw the amendment to exclude him. I can't find anything in EPCRS to say how to correct this problem. A late amendment is supposed to affect mainly NHCE's. This will affect one HCE, only. Also, EPCRS talks about someone deferring who was not eligible because of age or service or not passing an entry date. I can't find where any excluded class is mentioned.

All I can think of is refund all of the money including gains.

Am I missing something in Rev. Proc. 2008-50 or does anyone know of anything else?

My boss has 2 IRAs. He is taking RMDs from each. He wants to know if he can combine them and take one RMD from the combined IRA.

One of the IRAs has the following history: Boss had a Keogh Plan with a single member. He was told he had to terminate it and put it in an IRA which he did.

Is there any reason he can't combine the two IRAs?

Employee terminated employment with employer. Employee became independent contractor to perform same job as before. Distribution from 457(b) plan permissible?

I've always understood the 402(g) limit to be, for 2010, 16,500, whether pre or after tax. But I have read on a company's web site that their employees may exceed this limitation if the excess contribution is designated after tax contributions. I then found this on another employer's web site...and this is not part of a plan with Roth provisions.

1. May 401(k) plans allow this? Where in the code is this allowed?

If so....

2. must the employee's after tax contributions be subject to the ACP test?

3. may after tax contributions only be made if the full pretax 402(g) salary deferral has been made, or may the employee designate any part of their salary deferral as after tax??

4. Are the after tax contributions subject to the 415© limitation?

Any other information on this would be appreciated.

BruceM

Under this new pension law, are there any circumstances in which quarterly pension contributions are required for a small DB plan? Ours never has and never will have more than 50 participants.

It used to be 100 participants made a difference, I think, so we paid once a year. Are we still exempt from paying quarterly due to our size?

Participant A borrows $40,000 from a MPPP (when A's account balalnce is $150,000). Participant A then borrows $30,000 from the same employer's PSP (when A's account balance is $250,000).

The MPPP is then merged into the PSP, and the MPPP trustees assign A's $40,000 note to the trustees of the PSP (who accept the assignment). Does the combined $70,000 worth of loans now in the PSP violate the $50,000 loan limitation of IRC Section 72(p)(2)(A)?

Plan historically had a 6 year vesting schedule but shifted to a 5 year vesting schedule when adopting a restated adoption agreement some time ago. The 5 year schedule is in all cases more favorable than the 6 year schedule. A dispute has arisen over the impact of the amended vesting schedule with respect to former employees who were not 100% vested when they separated from service and remained participants in the plan at the time of the amendment.

I had always assumed that such former employees should generally be governed by the vesting schedule in place at the time they performed services /received contributions under the plan--i.e., that old money generally tracked old rules. Others say, however, that all participants in the Plan should get the benefit of the new, more generous vesting schedule regardless of the fact that they did not perform any service after the change was adopted.

I suppose I could see where a plan could be amended to provide for application of the more generous vesting schedule across the board--to existing employees as well as former employees participating in the plan--but would that be the normal operation / intent of adopting a restated prototype adoption agreement with an enhanced vesting schedule? Couldn't an argument be made that forfeitures of the former employees under the old (less generous) schedule belong to the other participants such that giving them the benefit of the new (more generous) schedule is problematic? And couldn't an argument be made that those unvested participants who just happened to stick around in the Plan after termination instead of taking an immediate distribution or roll-over got a windfall that other former employees who had previously taken money out of the plan did not receive?

Thanks for any advice on this.

Can a Safe Harbor 401k plan be amended mid plan year to change a provision that doesn't have an effect on the 3% SH NEC, but might have an effect on contributions made above and beyond the SH NEC?? Thanks.

I have a client that discovered an error on their trustee statement for a previous year. They are inclined to file an amended Form 5500 but want to know if it is necessary to have an amended audit attached to the Amended Form 5500.

Any thoughts?

I need some TPAs who do daily recordkeeping on Relius and trade with TD Ameritrade. Preferably in the Southeast, NC, SC or around that area would be great.

Thanks!

For an HSA contribution, I have read you can make the contribution up to the tax filing date (April 15, 2010 for 2009 year). However, does the Plan need to be established on/before 12/31/09 in order to make the contribution? Just wondering if they can set up the HSA in 2010, make contributions for the 2009 year.

Thanks,

I have a husband and wife DB plan. Husband several years ago converted his PVAB to a 414k account under terms of the plan. So far so good.

He is now coming upon his age 70 1/2 minimum required distribution point. Question: must his MRD be figured under the 401a9 annuity rules or can he use the account balance method?

I'm nearly certain I've seen discussion of this, perhaps at an ASPPA conference or something, but I'm darned if I can put my hands on anything.

Participant terminates employment on, say, Sept. 1, 2009. 12/31/09 valuation is processed, distribution paperwork sent to the former participant, who signs the distribution request paperwork on February 14th, 2010. Participant is subsequently rehired on February 20, 2010, BEFORE any distribution is processed.

Plan does not permit in-service withdrawals.

I believe distribution cannot be made. But I was just wondering if there is anything "official" from the IRS or in the regs that specifically states this. As I said, I'm certain I've seen discussion, and I think on these boards as well, but I've done several searches and can't seem to find it. Thanks!

A census taker visits some number of families and determines that on average they have 2.6 children.

(a) What is the least number of families in this census?

(b) Given that the least number of families was polled, how many children in total did the families have?

© So, (a) and (b) are too easy? Agreed. So, in how many ways may these children have been distributed among the families (e.g., one family could have had all of them, or they could have been split among two families, etc.)?

Calendar year 401k plan uses prior year testing method for ADP/ACP. Some employees terminate in late December and are paid the following January, with elective deferrals coming out of the last paycheck (I think these are matched as well).

Sponsor would like to exclude such contributions from ADP/ACP tests.

Here is language from definition of "includable compensation" in the prototype document:

To be included in determining an Active Participant's "deferral ratio" for a Plan Year, "includable contributions" must be allocated to the Participant's Account as of a date within such Plan Year and made before the last day of the 12-month period immediately following the Plan Year to which the "includable contributions" relate. If an Employer has elected the prior year testing method described in Subsection 1.06(a)(2) of the Adoption Agreement, "includable contributions" that are taken into account for purposes of determining the "deferral ratios" of Non-Highly Compensated Employees for the prior year relate to such prior year. Therefore, such "includable contributions" must be made before the last day of the Plan Year being tested.

Are there any permissible methods to exclude these contributions from ADP/ACP?

Thanks for your help.

As part of the accountant's audit report for the New Jersey state pension plans:

http://www.state.nj.us/treasury/pensions/p...ioncombined.pdf

on page 20 there's this:

"Income Tax Status

Based on a May 2007 declaration of an outside tax council retained by the Attorney General of the State of

New Jersey, the five pension funds/systems (TPAF, PERS, PFRS, JRS, and SPRS) comply with the qualification

requirements of Section 401(a) of the Internal Revenue Code."

Apparently complying with 401(a) is important enough for a government plan to note in the audit report.

The problem is that the plans do not comply with at least three sections of 401(a):

401(a)(16) - maximum benefits - Lots of 47 year old cops retiring with benefits over 415 limits.

401(a)(17) - maximum salary - Lots of school superintendents making over $245,000.

401(a)(29) - Obviously minimum funding requirements are not satisfied under PPA

Would this mean that New Jersey's plan is not qualified and whatever has been set aside is taxable to plan participants?

Please help. We are not in agreement in our office....

What 403b plans HAVE to file a Form 5500 for 2009 and beyond? All? Some? Only ERISA plans?

Is there a comprehensive list of employers that must file the Form 5500?

Thanks for any guidance you can provide.