If an employee with an outstanding loan balance terminates employment, is there any requirement that the loan be paid within a certain time period, say 60 days, or is this up to the plan. IOW, if the plan allowed it, could the former employee continue to make the regular, level payments over the remaining period of the loan?

Couldn't find anything addressing this in 1.403, 72(p) or Pub 571

Thanks

BruceM

Is there such a thing as a 401(a) plan that only accepts DROP money - which I believe is rollover money from a state defined benefit plan when an employee retires. I believe a money purchase governmental 401 plan can ACCEPT DROP rollover money. But you still need a written plan and a fixed MPPP contribution correct? Can the plan have a 0% MPPP formula and thereby only accept DROP money?

Not sure of the advantage of this arrangement versus the employee just rolling the DROP to an IRA?

Any thoughts?

Have a situation where we have a one person money purchase plan set-up in the 80's. Plan has never been amended. Participant dies leaving behind his wife as beneficiary. Issue is the plan has never been amended and missed a year of RMD's prior to death. Anyone have any experience with a plan with defects that is orphaned? If you correct under VCP, do you update the plan document? Who signs?

Thank you!

Could someone recommend good testing software for a section 125 plan, ideally in a controlled group environment? If not, even a worksheet that I could use to test? Thanks.

It has always been my understanding that deferrals could be made from Severance Pay or an Early Retirement Incentive provided it was paid no later than the pay period that began prior to severance from employment. I realize deferrals can not be made post-separation, as they can be made from unused sick and/or vacation pay, if paid timely. Also understand that the election would have to be made in the month prior to when the deferral would be made. However, I can not find anything that specifically would allow for it other than it is not specifically excluded.

Any ideas?

Thank you in advance for all assistance.

A plan was restated, effective 1/1/2005 and executed in March 2005. Subsequently, the plan adopted multiple amendments in 2007 and 2008.

This is a Cycle A individually designed plan. It is my understanding that the restatement period began on 2/1/06 and ended on 1/31/07.

Would the restatement have to be signed within that period of time, so that, because it was signed a year before the cycle began, it was not effectively restated for EGTRRA?

Just Downloaded today's released 2010 SAR program> Tried generating SAR but although loaded received error message that 2010 Version must be loaded before running SAR. If anyone else has similar issue and gets return call from RELIUS before I do (several days according to service desk operator), please share "fix". I will do same.

What are the benefits of an advisor to a current 401K plan to the organization as well as to the individual participants?

A doctor leaves one practice to join a new one. Both before and after leaving the practice, the doctor compiled a list of patient names from memory. The doctor disclosed this list to the new practice and the new practice sent out a generic notice announcing the new doctor's services to the patient list.

Did the doctor violate HIPAA when the doctor disclosed a list of patients that had been treated at the previous practice to the new practice for the purposes of the new practice's marketing? It is clear under HIPAA that a hospital or health care practice may send out such a generic notice to its own patient list. This situation seems a bit different because the patient list came from the old practice. Did the doctor need to get authorization from the patients before sharing the lists with the the new practice?

If the doctor did violate HIPAA, is only the doctor liable for possible civil monetary penalties in the case of a complaint to the Secretary, or might the new practice be liable as well for using the list?

Any insights would be appreciated! Many thanks!

I wondered if anyone else is having this problem. If no one else is, it may be our software provider (which we are checking) but if others are, it may be a DOL problem.

Is anyone getting error codes P-227 Plan Admin USERID & PIN are missing or invalid, or I-104 Plan Sponsor's USERID & PIN must be provided, Processing Stopped? When we check the PDF on the DOL website it appears to be signed by the Plan Administrator.

When we call the DOL they are telling us "something must be wrong."

Any thoughts?

An attorney, working with his widowed client, discovers that the retirement plans, Profit Sharing and Money Purchase Plans, that her husband was a participant in had never been amended or restated since inception, February 1977.

Husband was a doctor and only participant in both plans. Someone else administered the plans for him. This person died, and no one else kept up with the amendments and restatements.

Form 5500 EZ was filed annually by his CPA and is up to date.

Widow would like to roll the balance from the two plans into her IRA.

Should the attorney apply under the VCP to correct and bring the plan into compliance before the balance is rolled over into the widowed spouse's IRA.

Or since it was a single participant plan, is there another means of correction.

I would appreciate in guidance on this issue.

Thank You

So, who else has heard late summer for the release of the EZ? This is according to the DOL. What is everyone doing? Waiting I suppose? using the 2008 form, SF (not a good option)....

Just want some thoughts.

Thanks.

As always, the ability to bounce ideas here is appreciated. Here's the scenario:

Plain profit sharing plan has a limit of the amount deductible under Code Sec 404. For 2008, the plan receives more than 25% as a contribution (FWIW, this is totally and completely the accountant's fault) and we allocate the 25% and carry over the rest. (Yes, the client and accountant were advised of the need to pay a penalty on the overcontribution.)

In 2009, the plan was restated onto an EGTRRA document that has no limit, other than 415 limits for the participants. No additional contributions were made. The carryover is less than the combined 415 limits, but more than 25%. I think from the plan's perspective, we can (must) allocate that carryover contribution in 2009 (it happens to be going to one NHCE; the owner had no comp)...and get on with the plan termination, which is next.

There would be an additional penalty in 2009 for the remaining overcontribution, and honestly I'm not sure if that theoretically hangs on forever if the plan goes away or what, but I don't see it as my problem.

Does anyone see problems for the plan and its qualified status if we follow this path?

A small doctor's office was recently sold to a large hosptial. The office has a 401(k) plan with new comp. The plan termination date was set as 3/31/2010 (calendar year plan). No one is receiving any compensation after that date.

While the 3 employees all have W-2 comp. for 1/1 - 3/31, the doctor does not have a set salary. I believe he does take "draws" but normally it is later in the Spring when the claims/insurance goes through and he can be paid.

The Plan is a non-elective safe harbor plan. He would like to try to do new comp. for the 2010 short plan year. But what would he use for comp? Do we just add up his draws? Can we use a good estimate based on either 2009 compensation or estimated on 2010? Can he not do this at all?

Thanks for any help.

Am I correct that a plan that has a past service liability will never be able to use a prefunding balance in the second year to reduce their contribution because the prior funding percentage will always be less than 80%?

My client's plan used one year of past service to create a funding target, funded enough to cover the funding target and target normal cost for that year and elected to create a prefunding balance based on the contribution in excess of MRC. Now in year 2, they have a PFB, but can't use it. Is that correct or am I missing some sort of exemption that would apply here?

I know this is an easy question but I'm frazzled today -

Participant waived 1st RMD due 04/30/2010. To compute the RMD due by 12/31/2010...I still use 26.5 from the uniform table and the last val balance so in essense it's the same $$?

This issue was raised on the 'IRAs and Roth IRAs' board in the hope a Roth conversion might offer a solution to the potential double taxation problem it presents. That now seems unlikely. It is being repeated here to garner a broader 401k perspective.

A 401k profit sharing plan is maintained by an LLP. A Partner in the firm executed an elective deferral agreement when first eligible a number of years ago authorizing reductions equal to the annual Section 402(g)(1) limit and additional annual profit sharing contributions have been added to his account up to allowable maximum. However, annual K-1 statements issued on the Partner's behalf have never reflected these amounts and Partner's accountant never took them into account in figuring taxable income. Consequently, these amounts have de facto been made with after-tax dollars.

Amended returns will be filed for open tax years. The problem is what, if anything, can be done (now or in the future) to avoid being taxed a second time on allocations made doring the closed tax years when distributions ultimately occur?

I work for a tax-exempt organization. I have made pre-tax contributions to a 457 plan for the last 9 years. I am leaving the organization at 05/31/2010. I understand that the assets in my 457 plan become taxable when I separate from service. My questions are as follows:

1. My contributions are invested in various mutual funds held in trust. When the plan assets are distributed can ownership of the mutual funds be transferred from the organization to me or do the investments have to be liquidated and cash distributed to me?

2. If the mutual funds can be transferred, how/when will they be valued?

3. Regardless of whether distribution is made in mutual funds or in cash, the value of the investment will very likely be more or less than the original contributions. Is the difference between the value of the investment (or cash) and the original contribution amount treated as capital gains or loss for tax purposes?

4. Since my social security and medicare wages were not reduced by my pretax amount contributed to the 457 plan, I assume that the distributions will not be subject to FICA. Is this correct?

Thanks for any information you can provide at this confusing time.

A "standard" profit sharing plan with Mar 31, 2010 plan year end. 2009 Form 5500-SF for Apr 1, 2009-Mar 31, 2010 plan year filed on Apr 30, 2010. Plan terminated effective Feb 28, 2010. All plan assets should be distributed to participants (3 total) in May 2010. Company intends to dissolve in late June 2010 after final tax return is filed (by Jun 15, 2010). Thoughts on filing final Form 5500-SF.

1. Can the final 2010 Form 5500-SF for Apr 1, 2010-May 31, 2010 be filed after June 2010 if company is already dissolved (no company/sponsor, no company official), assuming 2010 Form 5500-SF not yet available. All plan assets were distributed prior to company/sponsor dissolved, short plan year ended prior to company/sponsor dissolved, but signing/filing date will be after company dissolved.

2. Can we use the 2009 Form 5500-SF and change the plan year dates on the form and file the final Form 5500-SF prior to company dissolving, if necessary to sign/file while company still active.

Any thoughts or ideas are appreciated.

A participant terminated in late 2009. They turn 70 1/2 in October 2010, hwoever, they would like to take a distribution now, before they have reached age 70 1/2. Must they take part of the distribution as an RMD and the remaining portion is an eligible rollover distribution? Or has the liability for the 70 1/2 RMD not been incurred yet since they are not 70 1/2, and thus no portion of it is subject to RMD? My thinking is that the RMD liability has been incurred already since the amount would actually be based on the participant balance at 12/31/2009, but have not found a definitive answer yet. Thoughts?