Facts: payment should have been made in 2007. It was not and the error was just discovered. Payment will be made in 2010. Since we are after 12/31/09, we assume there is no relief under the correction notice's transition period. So then, this is a full blown error w/ reporting and income inclusion.

A few questions we cant seem to find direct guidance on:

1- Should reporting be made on a corrected 2007 W2 or 2010 W2?

2- Should the amount of the account in 2007 be paid or the amount as it stands today (which has increased)?

Thanks.

I have looked at the legislative language and the interim final regulations on the requirement to cover adult dependents up to age 26. The term "group health plan" is used but there are many definitions. In other words, is dental coverage subject to the requirement? The interim final regulations do not include a definition nor do they amend an existing regulations to expand the list of sections subject to the definition that has applied for HIPAA and certain other health benefit purposes.

EPCRS does not appear to provide for a correction method - thoughts?

Employer's payroll company did not withhold deferrals for one payroll period. What is the correction required for one missed payroll? If the ER has to make up in QNEC has anyone ever experienced the payroll company paying for this?

Is it permissible to 'double up' the next payroll (and pay the lost earnings for the late deferral when calculated)? However, the 'double up' doesn't seem likely....

Thanks,

Our client has a 401(k) with a GIC. They want to terminate the plan. How do you terminate and distribute with the GIC held in the 401(k)? Any ideas, comments, experiences, suggestions, traps for the unwary?

What year was the first year that the limit went from 100,000 to 250,000 for filing Form 5500 EZ?

If a plan holds an illiquid asset and does not have a Fidelity Bond for at least the "value" of the illiquid asset what do they have to do?

We just received another "URGENT" notice from the IRS. This one assesses a penalty for a balance due with respect to Form 945. It references a tax identification number that is neither the sponsor's ID nor the trust ID under which the 945 was filed and the 8109-B coupon deposited.

This is not the first instance, and coupled with notices regarding missing filings that were filed, mistaken filing that were filed correctly, approval notices for automatic extensions that were dated after the extended due date, etc., our productivity has been significantly affected.

Since humor often helps me deal with frustration, please complete this poll, and feel free to add your own comments as well.

Back in 1981, my one-participant corporation (ABC, Inc.) had a good year and my accountant (Sam CPA & Associates) set up a retirement plan for me. He obtained an EIN for the Plan and deposited funds in a brokerage house under the name of ABC, Inc Profit Sharing and Pension Plan with me as the named trustee. There is a photocopy of a 38 page document in my file titled "Qualified Retirement Plan and Trust" that is not otherwise identified.

A couple of years after that, the corporation was discontinued and my accountant disappeared.

I'm assuming that I probably have a 401(k) defined-contribution plan based on a possibly pre-approved Prototype Plan with "Sam CPA & Associates" as the Plan Sponsor. Further, I assume that there have been no amendments or restatements nor have annual 5500 returns been submitted although the total plan assets exceeded $100K in 1997 or 1998 when I transferred in assets from another Plan.

As I turned 71 in 2010, I want to discover and make the necessary corrections to this Plan before taking any distribution. I may want to set up a new 401(k) for my current company (XYZ, LLC; taxed as sole proprietor) and transfer assets into that first.

I am at a loss for how to approach this to minimize penalties. Any guidance would be greatly appreciated.

Thanks.

If a participant elects a non-QJSA life annuity payment form under a DC plan that is not generally covered by the QJSA rules, is the plan required to offer a QJSA form of benefit? Likewise, is the plan required to offer a QOSA?

I don't think so since the participant has already selected a benefit form and it seems unlikely the participant would want to change. It seems it would be a wasted effort to offer a QJSA or QOSA when the participant has already selected another form of life annuity. But what do you disclose in the QJSA notice?

Also, if the particpant's spouse won't consent to the non-QJSA form of benefit selected by the participant, it seems that the particpant would have to select one of thee non-life annuity benefit forms already offered by the DC plan, and not a QJSA or QOSA. Otherwise, the plan would be forced unwillingly to into providing QJSA and QOSA benefit forms.

I thought that all employers (that offer medical coverage) must begin to offer to continue coverage to children under age 26 (even if not in school) by 9/23/2010.

However, an HR rep. told me that companies that self-insure (under ERISA) do not have to offer this new coverage until 1/01/2011. Is that correct ?

so now the new 5500-EZ asks the following:

Is this a defined contribution plan subject to the minimum funding requirements of

section 412 of the Code?

the plan is a money purchase, amended years ago to 0% formula.

so is the answer yes, and minimum required is 0

or is the answer no, since the formula is 0% and therefore there is no required contribution.

I really don't know why I thought this, but for some reason I had always thought that the EZ filings were not open to public inspection. But according to the 2009 EZ instructions on Page 2, they are open to public inspection. Just not on the internet.

So what's the advantage to an EZ if you are over the $250,000 filing cutoff, other than perhaps making it a little more difficult for someone to obtain the information?

Can anyone point me towards an authority regarding the treatment of an intentional ESOP loan default as a prohibited transaction?

Thanks!

A defined benefit plan is being terminated in a standard termination. Recently, the sponsor purchased the annuity contracts for all of the participants' and existing alternate payees' accrued benefits. The sponsor will soon file the PBGC Form 501 certificate.

A few days ago, the sponsor received a entered QDRO for a participant dividing his pension benefit in a separate interest. The sponsor learned of the QDRO only at this time. Other than timing, the QDRO meets the requirements for approval.

Is this QDRO too late to be honored? Must the annuity contract provider honor the QDRO?

I've had no luck with commentary, or DOL/PBGC guidance on this issue.

Thanks.

We have a cash balance plan that started in 2008 - 12/31/09 is the 2nd year and the contribution amount was $215,000.00

that represents the 2.50% to non-highlys and 36% to the owners. There was some interest credits for 2009.

The file says the maximum amount of contribution is only $206,000.00. I know it is because of the interest that was credited.

Can they still contribute the Target Normal Cost at Risk - which is still the $215,000.00? Or will they be overfunded in the contribution?

They want to stay on top of the funding and not get behind and underfunded.

Thanks

A terminated employee has an outstanding loan. They elect to leave their account balance in the Plan and not take a distribution.

How do I handle the outstanding loan balance.

Is it Deemed or Deemed with Offset?

Can you explain both options?

A client failed the adp test for plan year ending 09/30/2009 and has not yet been issued a refund (plan is on extension to file the form 5500). What is the penalty and interest that must be added to the refund? Thanks.

If a nonprofit top-hat 457(b) fails to amend for new legislation (i.e. HEART Act) is there a correction method? It looks like submitting to the IRS outside of EPCRS using EPCRS correction methods is only open to govt plans. What are the consequences of the 457(b) top-hat plan falling out of compliance. Become a 457(f) plan? Would it be all assets or just those contributed while out of compliance?

Thanks

If I am merging a money purchase plan into a profit sharing plan (Believe it or not....there are still some out there), do you typically freeze it first and then merge?