I am working with a plan that is allowing loans to be rolled over from a company that they acquired. Plan Sponsor would like to reamortize the loans due to missed payments during the transition and different payroll frequency. Is there any reason why this would not be permiteed.

If an insurance company received direct and eligible indirect compensation and no other service providers received compensation, what would be the answer to Part 1, 1a ? Seems it should be "no", but I want to make sure.

Also, if I leave 2 (g) of Part 1 blank, I'm getting a validation error (missing or invalid entry). I've seen examples where this field is left blank, however Relius would prefer I enter a "0". Can this field be left blank?

I appreciate all help.

The IRS is threatening to disqualify a SARSEP as a result of the violation of the 50 percent particpation rule. How is the penalty calculated for disqualification?

Int he good old days before the timing of accrued contributions was material and elections/certifications were timing dependent, you could complete the 2010 valuation now (with appropriate caveat) even though the accrued contributions had not been made. I might add that I've never had a client who failed to make the accrued contributions by 9/15.

Now, I find that client cases stay home, which means continued acquaintance efforts. Also, I can no longer invoice on a completed work basis without putting our Wheaten terrier out on the street with dark glasses and a box of pencils to generate some cash.

How are practitioners handling this craziness? E.g., are you waiting until 9/15 to complete the actuarial report providing estimates in the interim?

A client has a multiple employer plan with 2 employers. There is common ownership between the 2 employers but not enough to create a controlled group

Owner A owns 48.5% of Company 1 and 51% of Company 2.

Owner B is the spouse of owner A and owns 24.5% of Company 2.

Owner C owns none of Company 1 and 24.5% of Company 2.

All owners receive their W2 compensation under Company 1. No compensation from Company 2. Both are S Corps.

Company 1 has about 30 employees and Company 2 has about 13.

How do I do the Top Heavy calculation? I know there is a separate calculation for each employer but who are my Key employees for each calculation? Do I include Owner A and B in both calculations? What about the fact all their compensation comes from Company 1?

The IRS has requested a change to a good faith amendment. We have been asked to replace one word with another word. Do we prepare a correction to the current amendment, only including the requested change, or do we change the word and re-send the entire amendment, with the employer signing and dating as of the current date?

Can a municipality require as as a condition of employement that employees must contribute $25 permonth to a governmental 457(b) plan? The employer in turn will contribute $150 on behalf of each participant.

I am working with an employer that is associated with a church, and is in the process of establishing an administrative committee to administer its 403(b) and welfare plans to fall within the church plan definition of Section 414(e). (Note that they do have a legal opinion that if they take this step they will most likely be considered church plans.)

The employer previously had ERISA language in its plan documents and filed 5500s. It recently discovered that it failed to file 5500s for the 2007 and 2008 plan years for its 403(b).

In addition it is questioning whether it should file the 5500s for the 2009 plan year, given that it is taking steps to be a church plan in 2010 (the process of which started in 2009).

Does anyone have any insight as to where the IRS will come out in its pending guidance regarding church plans?

For example, if they previously filed 5500s and had ERISA language in their documents, but now have removed the ERISA language and desire to file the 2009 5500 as the "final" 5500, will the IRS consider them to have "deemed" to have elected to be covered by ERISA due to the filing of the 5500s and the ERISA language?

Or will their be some type of grandfather for plans that are church plans on the date the guidance is issued, regardless of when they became church plans?

Thanks in advance for any thoughts or insights!!

The Long Term Disability policy for our association requires a 90-day non-working period to qualify for the benefit. We are a small association and come under the DC mini-COBRA continuation. The person in the DC office said that the 90-day period qualifies as a reduction in hours and therefore an Involuntary Termination. Our HR person insists it is a Voluntary Termination because in involves a disability. Who can I go to for a valid determination? It means a difference of 3 months or 15 months of health coverage.

a bank esop is asking for a SAS-70. They read an article about "Proper Employee Benefit Plan Documentation" and it recommended that they keep a copy of it on file. However, is that required with Employer securities? They do have some cash assets, but wouldn't a SAS be provided by the entity that invests the money?

If a plan sponsor does not restate plan by 4/30 does that mean the plan loses its qualified status? Or atleast have to go through VCP corrections program?

What would happen if plan restated in May and is then submitted to IRS in May?

What would happen if plan restated before 4/30 and submitted to IRS after 4/30?

If plan not submitted by 4/30 is it pointless to submit and better off not being submitted to IRS?

Thanks.

I have a individual taxpayer client who is being audited. He works for a company that sponsors a 401(k) plan (in which he has no ownership). He also has a 50/50 partnership with his brother and that partnership sponsors a plain profit-sharing plan. The partnership and the company are not related in any form or fashion.

The taxpayer maximizes his 401(k) contribution and that is on his W-2. The partnership declares a $46,000 contribution for him and that passes through to him on his K-1 to go to his 1040, page 1.

The agent is saying that he has made an excessive contribution under 402(g) because he can't deduct $46,000 on page 1 of his tax return AND have $15,500 (this was 2008) on his W-2 as an elective deferral. She says that without a 457 plan this isn't possible. I don't understand her position. Am I missing something??? Unless she is saying the partnership is sponsoring a CODA (which she doesn't seem to be implying), I don't see how we have exceeded the 402(g) limit.

Any help is much appreciated!!!!

James

If an individual has been a sole proprietor for several years, incorporates during 2010 and the new corporation subsequently adopts a defined benefit plan, is the earned income from the sole proprietorship eligible to be used in the determination of 415 high 3 compensation?

I am working on the ASPPA CPC ESOP Module this quarter and am not getting any of the answers associated with the question regarding annual addition limit. Is there anyone who can help?

The particulars are: C Corporation, HCE receive less than 1/3 of the ESOP contribution, looking for the 2010 annual addtion limit for Employee A based uon the following information:

Employee A earns in excess of $500,000

Elective Deferrals = $16,500

Matching contribution is 100% of first 4% of compensation

ESOP leveraged stock forfeiture = $3,450

ESOP contribution is $24,500 (including $8,875 in interest)

My understanding is since company is a C-Corp and HCEs are receiving less than 1/3 of the ESOP contribution, that the annual addition limit would be

Elective Deferrals + Match + ESOP Contribution (less interest) AND you ignore the forfeiture amount. So if my math is correct I think the annual addition limit is $16,500 + $9,800 (100% of 4% of $245,000) + 15,625 (ESOP excluding interest) = $41,925. This answer is none of the five provided.

Am I calculating correctly? If not, what am I missing? Thanks.

I'm looking for an imaginative solution. In the 401(k) we manage (Acme Widgets) there are 2 owners, their sposes, and 2 unrelated employees. All employees defer into the 401(k) since inception in 2006. Here's the problem: one of the spouses made $8,333 deferrals in both 2007 and 2008. She also made deferrals into a 401(k) Plan ata bank she also works at if $15,000 in 2007 and 2008. We just fouk this out. She is under age 50.

Can anyone think of a corrective action that has the least adverse consequence?

Thanks to anyone who can come up with a good solution.

Any thoughts on possible ways to work the following scenario:

Company has long-time employee who has history of going out on disability (STD and LTD) and returning to work. Employee is about to go out on LTD again. Company likes the individual (sympathetic disability issues) but is tired of the back and forth and would like to terminate individual's employment. Company would give individual "severance" amount equal to 6 months salary in exchange for termination and signing a release, etc. Problem is that the severance payment would offset amounts to be paid under the LTD plan so company would like to delay that payment until individual's eligibility for LTD stops. Problem is there is no way to predict when the individual will no longer be eligible for disability. Plan provides coverage up to age 65 if disability continues. In the past, the individual was only on LTD for a few months and that is likely to happen again but there are no guarantees of that so it's theoretically possible (although very unlikely) that the payment could be delayed for a number of years--well past S-TD exemption and separation pay plan exemption requiring payment by end of second year following year of separation. I'm not seeing a clear way to exempt this or make this comply with 409A. Thanks.

I have found many helpful web sites that offer RMD calculators for "account balance" retirement plans. I have not located a similar site for defined benefit plans. Please let me know if you have found a web site that caclulates RMDs for defined benefit plans.

Thanks!

Back in 2006 a rollover was deposited into a plan, we just found out that that rollover consisted of monies from several different IRA's (SEP IRA, Conduit IRA, Traditional IRA and a ROTH IRA). Note this money came into a Qualified plan in 2006.

Participant wants to withdraw all his rollover monies now, my question is how do we go about doing the 1099R's for this? Especially since 2 of the rollover amounts should never have been allowed to rolled into the plan to begin with.

Thanks for any help you can provide.

I have a DB plan that started in 2005. Plan gives benefits to all employees. In 2008 the plan document was changed to give x% to class 1 employees and y% to class 2 employees. However the plan document also says that service prior to 2007 is excluded. Can you just disregard the '05 & '06 service for those employees who were employed during those years.

Saw the below post on another website but with no satisfactory answers- I have a similar issue- all comments appreciated....

I have a plan that is frozen w.e.f 1-1-2010. I am currently doing disclosure work for year ending 12/31/2009 and under FAS 88 I plan to show the effect of the curtailment. -

Gain due to the curtailment (basically PBO – ABO = $400,000).

Accumulated loss in AOCI = $ 2,000,000

Transition gain/loss = $ 0

Prior Service Cost = $ 0

So I adjust the curtailment gain against the accumulated loss and still end up with a loss of $ 1,600,000. Future service of actives is about 10 years

What are my options of amortizing this loss

(a) amortize it over the next few years (say 3-4 years)

(b) recognize the entire loss in this year

© other???

Client plans to terminate plan sometime in 2010 but nothing has been confirmed as yet on this. I realize most of these decisions are based on discussion with auditor/client but they don’t really have much to say on this topic. I’d like to know what others in similar situations are doing……….