Does the board support Tapatalk? I've used it on my blackberry with a couple of other boards and really like using it instead of the blackberry browser for boards.

Thanks.

Is anyone aware of legislative amendments needed for a 457(b) top hat plan? I can only think of a couple optional provisions - ie adding beneficiary hardship distributions, and differential pay - the ability to defer from diffential pay.

One is PPA one is HEART, I am not sure what deadlines apply?

Are group long-term disability contracts usually written that if a person goes on STD leading to LTD in the first year of employment and has a pre-existing condition, that the employee is never eligible for long-term disability for the pre-existing condition?

We have a peospective client who is an LLC, but all employees havee their income reported as K-1. The client wants to establish a 401(k) plan. So far so good.

But now I am informed that several of the employees have set up SEP's for themselves based on the K-1 income from the LLC. Am I missing something? If what they really have are IRA's that's ok, but it was expressed to me that these were SEP's.

Does this seem a tad bad? Any thoughts are appreciated.

Plan is a calendar year plan that permits both employee pre-tax (elective contributions or elective deferrals) and employee after-tax contributions. The plan design includes an EACA, an eligible automatic contribution arrangement. Initial results indicate that the 2009 ADP test fails but the 2009 ACP test passes with room to spare. What is the deadline for recharacterizing employee pre-tax contributions as employee after-tax contributions? 2½ months or six months?

Treas. Reg. Section 1.401(k)-2(b)(3)(iii)(A) states that "excess contributions may not be recharacterized ... after 2½ months after the close of the plan year..." That's a straightforward argument in favor of the 2½ month deadline.

Treas. Reg. Sections 1.401(k)-2(b)(2)(vi)(A) and 1.401(k)-2(b)(5)(iii) extends the 2½ month deadline for making corrective refunds not subject to the 10% excise tax to 6 months for EACAs. Those changes are effective beginning in 2010. Is there room for a good faith interpretation argument to indicate that the extension of the 2½ month to the 6 month deadline could apply for the 2½ month recharacterization deadline too for 2009? It seems like the policy of not having to worry about testing results for six months would apply to both versions of the 2½ month deadline.

A 5 doctor practice that has a 401k plan wants to restructure so that the oldest MD, age 57, can retire in 5 years.

They would like to restructure so that the 57 year old MD sells his interest in the practice, and the other 4 MDs pay him out over that 5 year period. The 57 year old would now form a professional corporation and contract with the practice of the remaining 4 MDs to provide medical services to the practice's patients, and the practice would pay the PC (which would in turn payroll the money to the 57 year old MD). The practice would bill and collect for the 57 year old's medical services. The 57 year old MD's name would continue to be part of the practice's name.

For neither the practice or the PC would derive more than 50% of its gross revenues for providing management services to the other.

The PC would then adopt a DB plan for just the 57 year old MD, not covering any employees of the practice.

Would there be an affiliated service or controlled group problem?

The situation is this: a 4-partner law firm is owned 25% each by the professional corporations of the 4 partners. The partnership has 5 staff employees, all employed and on the payroll of the partnership. Each of the partners is on the payroll of his or her own PC, which contracts with the partnership to provide attorney services to the partnership's clients.

There is no question but that the partnership and 4 owning PCs are an affiliated service group.

There is one 401k plan that covers the 5 staff employees and the 4 partner lawyers, passing minimum coverage. This 401k plan also passes nondiscrimination tests (X-testing).

One of the lawyers (X) caused his PC to adopt a 412(i) plan, and mistakenly told the TPA that neither he nor his PC owned an interest in any other employer.

Later the true ownership is discovered by the TPA, who immediately raises multiple concerns. The obvious one is that the 412(i) plan is failing minimum coverage and is discriminatory. That is not the issue of this post.

The TPA has also notified the partnership that it has liability exposure (albeit slim, but exposure nonetheless) to the staff employees (or IRS or EBSA) for making contributions for them to the 412(i) plan, so that it will then pass minimum coverage and nondiscrimination. However, the 412(i) plan documents only indicate that the 412(i) plan covers the employee's of X's PC. The partnership did not consent to or otherwise sign the 412(i) documents (actually learning of the 412(i) plan's existence only after it had existed for 2 years.)

The TPA can point to no authority for the proposition that the partnership could be held responsible for making such contributions. However, the TPA says it is not unheard of for the IRS to take that approach with partnerships in situations such as this, where the partnership did not sign on and the plan specifies that it is limited to just X's PC.

The TPA has further frightened the partners, telling them that the 412(i) plan of just X's PC places the partnership's 401k plan at risk of tax disqualification, even though it has passed minimum coverage and nondiscrimination. Again, the TPA can point to no authority for this proposition, but insists that it is not unheard of for the IRS to take that approach with partnerships in situations such as this, and attempt to disqualify the partnership's 401k plan.

I don't see how the IRS could either hold the partnership responsible for contributing to X PC's 412(i) plan for the staff employees or disqualify the partnership's 401k plan.

Do you?

I prepared the form 5500SF and Schedule SB on the IFILE system.

As the actuary my understanding is that I need to print the Schedule SB, sign it and then scan it as a pdf file and then attach the pdf signed schedule SB to the Form 5500SF filing along with all the other Schedule SB pdf attachments. Is that correct?

Can't think of another way to get actual signature, etc.

Thanks.

I have a 401k plan with cross-tested profit sharing. Eligibility is from date of hire for 410k and profit sharing. All participants get a profit sharing at the end of the year except terminee's under 500 hours, so all non-excludable plan participants benefit for profit sharing coverage and discrimination testing.

The ADP test fails. Can I restructure the ADP test into "otherwise excludable" and "statutory eligible" participants even though I'm using all participants to test the profit sharing? In other words, is there any consistancy requirement between my testing methods?

Craig

This has been an absolute nightmare. We submitted the initial QDRO to the plan administrator for approval in December 2009. Several weeks later, they approved the QDRO and my attorney sent off the QDRo signed by the judge. This was in late January. In March, I contacted the plan and they said it had to be "reviewed" by their board and there are 32 QDROs ahead of mine. Now it's almost June and I can't get a straight answer out of any of them. Are they allowed to just hold onto it even after it was approved?

I understand things do take time, but this is frustrating. My attorney has called them several times and have not had any luck. Does anyone have any ideas?

A DB plan provides for the 5 year rule for payment to a non spouse beneficiary.

If say a participant dies on July 1, 2010 at age 65 (i.e. < RBD) can the adult child beneficiary choose to roll over the death benefit (act equiv of pension) of 100k to an inherited IRA prior to 12/31/2011 and begin receiving payments over their life expectancy?

Say this same individual has an IRA could the IRA become an inherited IRA to adult child and be paid in same manner as above?

Thanks.

A DB plan provides for the 5 year rule for payment to a non spouse beneficiary.

If say a participant dies on July 1, 2010 at age 65 (i.e. < RBD) can the adult child beneficiary choose to roll over the death benefit (act equiv of pension) of 100k to an inherited IRA prior to 12/31/2011 and begin receiving payments over their life expectancy?

Say this same individual has an IRA could the IRA become an inherited IRA to adult child and be paid in same manner as above?

Say in the case of the DB plan above the child waits until 2012 to roll over the death benefit into an inherited IRA account. Does this mean that the inherited rollover account must be distributed by 12/31/15 and be subject to tax and the 10% early payment penalty if child is under 59 1/2?

Thanks.

Georgia requires that each year, a copy of the Form 5500 be filed with the Georgia Department of Revenue. I was unaware of this requirement which, they tell me has been in place for many years. They also said that if a plan has not complied with this requirement, they need to send in at least the last three year worth of 5500 to the DOR. Is anyone familar with this requirement? Are there any other states that have a similar requirement?

PAL

The calendar year defined benefit plan was under 100% funded as of 1/1/2009. Quarterly contributios requirement based on the 2009 results were communicated to the client. All 4 quarterly contributions were made for the 2010 plan year by 4/1/5/2010. Since client made the maximum contribution in 2009 and asset earned 50% during 2009, the maximum deductible for the 2010 year is $0.

What are our options? Is there excise tax payable to the IRS?

The question is: what are the legal cites that govern the procedure regarding how a Registered Investment Advisor (RIA) can offer client references? Specifically, an RIA that is registered with the SEC, not an individual state (as individual state laws may vary on the topic).

In this day and age, clients asking for references is a critical component to doing business and is typically expected. However, what are the rules pertaining to RIAs providing references? Do the confidentiality/privacy practices established by the Gramm-Leach-Bliley Act of 1999 govern how this process is handled? An RIA simply cannot hand out a list of client references blindly; I would suspect that, at minimum, an RIA must ask permission before doing so. So what are the legal citation(s) governing how this is done? Gramm-Leach-Bliley? ERISA? Investment Advisor Act of 1940? Securities Exchange Act of 1934? SEC rules? DOL EBSA rules / interpretive bulletins? Buried somewhere in the CFRs?

Have a participant that has a primary residence third party loan. They want to borrow $50,000 from the plan so they can refinance the third party loan from the bank. They will not be withdrawing additional cash when they refinance with the bank. Can the loan from the plan be amortized over 5+ years? Looked in the regs and it's a little unclear.

We took over a plan, and here's what they do (and have been doing for several years, and allegedly passed audits):

-Each employee gets $500 to spend on health insurance benefits,

-If people opt out, or if they have lower insurance premiums, the $500 (or the remainder of the $500) is deposited to their account as profit sharing.

We're thinking no CODA b/c the employee never has the option to receive it.

Let's assume they were on a volume submitter document, each in their own group, and therefore no restrictions on the number of allocation groups.

My biggest problem with this is that it seems to fail the requirement that a plan have a definitely determinable allocation method, since the allocation includes these other varaibles (i.e., the insruance premiums and the amount of this stipend).

Do you think a favorable determination letter would ever be granted for a document that includes this allocation method specfically?

Our plan document states that our matching contributions are based upon W-2 compensation.

However our match (4%) is being calculated by weekly pay period.

I've suggested that we perform a "True up" for all that participate in the plan but our "administrator" is telling me that a true up would require the company to provide a match (4% of annual compensation) to any employee who had contributed any money to their 401K plan.

In other words:

Employee A (earning 100K) contributes $16,500. to their 401K during the first twenty weeks of the year. The current system "matches" their deferral with $1538. A True up would add $2462 totaling to a match of $4000.

Employee B (earning 100K) contributes $100 the first week of the year and decides not to save anymore. The current system matches their deferral with $77.00. According to our administrator the true up would match and add $3923. Even though Employee B only contributed $100.

Could this be true?

Thanks in advance.

P

Need help updating this book.Lance:

Need soneone to update this CPE book Contact Lance Wallach lanwalla@aol.com

Following you will find the description for the last issue (2006) of our Audits of 401k Plans CPE program. Please keep in mind that the description was for this particular program. A new author may choose to redo the program in some other way or write a new program altogether.

Generally Accepted Auditing Standards and Generally Accepted Accounting Principles apply to employee benefit plans. This program assumes that the participant is reasonably knowledgeable in the fields of accounting, tax and auditing to the extent necessary to identify issues with the Form 5500 pertinent to the audit.

The purpose of this program is to assist the independent qualified public accountant (IQPA) to properly conduct the work necessary in the audit of 401(k) defined contribution retirement plans. The materials are designed to help the auditor identify important issues in the process of the audit. This material assumes that the reader is reasonably knowl­edgeable of generally accepted auditing principles (GAAP), generally accepted auditing standards (GAAS), ERISA and the IRC as it relates to 401(k) plans.

Thus, rather than a general discussion of GAAP and GAAS standards, ERISA law and regulations, and the tax code (which would easily take up many volumes!), this material focuses on and attempts to meld together the unique ERISA and tax issues involved in the accounting, tax reporting and ultimately the auditing of the financial statements of 401(k) employee benefit plans.

Since most practitioners will deal with single employer sponsored 401(k) plans, the materials focus on single employer sponsored plans.

At times, comments on multi-employer sponsored 401(k) plans will be made when applicable to the discussion. A multi-employer sponsored 401(k) plan should be treated as a single-employer plan for purposes of reporting to the regulatory agencies: DOL and IRS, and sometimes the SEC.

This program is divided into seven (7) chapters, two (2) appendices and a topical index. Chapter 1 provides some background information on 401(k) plans. Chapter 2 concerns planning a 401(k) audit. Chapter 3 focuses on internal control issues associated with 401(k) plans. Chapter 4 discusses audit issues associated with 401(k) plan financial statements. Chapter 5 reviews additional 401(k) plan audit issues. Chapter 6 discusses the financial statement disclosures related to a 401(k) plan. Chapter 7 provides information on the auditor’s reporting requirements for a 401(k) audit. Appendix A is a glossary of terms related to 401(k) plans. Appendix B is a quick reference to Form 5500, who files and what to file.

Upon completion of this program the user should be able to: (1) understand the basic features of a 401(k) plan; (2) understand the general features, administration, reporting requirements and opera­tions of 401(k) plans; (3) define the general reporting requirements for 401(k) plans; (4) understand the requirements for 401(k) audits: full scope and limited scope; (5) identify risk areas, plan and conduct 401(k) audits more efficiently and effectively

Be aware of and avoid typical audit and reporting deficiencies; and (6) recognize new tax, accounting and regulatory developments affecting 401(k) plans and their effect on the audit.

A client recently received a notice from a fund company regarding a 403(b) plan they maintained several years ago. A single individual still has an account, but is now missing. This is considered a "dormant" account, since it has had no contributions since at least 12/31/2008.

We cannot find confirmation one way or the other whether we need to file Form 5500-SF, 5500-EZ, or no filing at all. Any opinions?