From my understanding, that last required update to SEP plan documents was required by EGTRRA. Can someone confirm?

More -- I previously worked with 401K plans and given their popularity, it was always easy to stay atop of legislative/regulatory developments and new requirements since information filtered down from so many sources. I'm new to the SEP world and would be interested in hearing ideas/thoughts from individuals on what resources they rely on to stay current on any SEP related developments. I would also me interested in any favorite resources(e.g...books, online resources, etc) you count on or any suggested training that might be available. I'm new to SIMPLE IRAs, so same question would apply.

I am happy I found this forum as I can see this being valuable as well.

Are employee pre-tax payroll deductions to pay the employee's share of group medical insurance premiums in either a fully-insured plan or self-insured plan considered "plan assets?" If "yes," and the employer is the named fudiciary, is the employer (named fudiciary) subject to ERISA's Prohibited Transaction rules? Is a COBRA premium payment made by the Qualified Beneficiary also considered to be a "plan asset."

My mind is tangled up--hopefully someone can untangle me!

The maximum employer contribution=25% of eligible comp. for the plan. If this amount (for a small plan)=$50,000 but the employer wants to put in a $100,000 profit sharing contribution, is that allowed??

Or does the maximum employer contribution amount reign over all?

A client wishes to maintain separate plans for two company divisions that are separated by several thousand miles but otherwise are engaged in the same business. The two divisions would have different benefits.

Can anyone suggest what potentially harmful issues the client should be especially aware of?

Hey Ya'll - Drs P&Q have a 401k with self-directed accounts. In 2009, they moved from Brokerage Firm to Large Insurance Carrier. SOX Notice was properly given. Brokerage firm liquidated assets on the worst trading day of the year. Losses were, of course, dependent on the investments of each participant. Investments were wire transferred to Large Insurance Carrier.

Dr. Q wants to know what legal obligation does he have as trustee to notify participants of the investment loss. I don't know of any requirement to send a notice that specifically addresses investment losses due to the movement of plan assets from one investment firm to another. Is there any need or requirement for him to do so?

Thanks for your help on this.

No 401k deferrals have ever been made to the plan. They want to change the plan to take out the 401k provisions.

Can they make an amendment to the current plan or do you suggest that they write up a new plan document that allows for profit sharing only? I'm assuming that they don't have to terminate the 401k plan first?

Thoughts on what to do?

We have a handful of participants that recently learned they defaulted on one of their plan loans. Here is the situation: we have a 403(b) and a 401(k) plan. For around a dozen participants, they had plan loans through both plans. The TPA handles the entire plan loan process. When the TPA set up the repayment, they only set up one of the loans (the 403(b)). The participant saw loan repayments coming out of the paycheck each pay period. However, the payment was only coming out for the 403(b) plan loan, not the loan through the 401(k). The TPA just notified these participants that they defaulted on their 401(k) plan loans.

Technically, it is the responsibility of each participant to know what their repayment amount should be. So I suppose it could be argued that each participant should have known that their repayment didn't look right. But practically speaking, people are only going to see that some amount is coming out. If it is slightly off of the correct amount, employees wouldn't notice.

I find more fault with the TPA in not setting up the repayments properly. But the TPA says we have to treat it as a default. There must be another option.

Any thoughts?

The plan document limit's the number of loans to 1.

The participant currently has a loan amortized over 10 years (primary residence, 8 years left) and wants to take a new loan.

Does Sal Tripoldi's Chapter 7, Section IX, Part C.1.b, 1.b.4)c, (page 7.306, 2009 edition) indicate that we can refinance with unequal payments as long as the interest rates are the same and the original loan does not extend pasted the orginal repayment period, all limits are met, and the new loan is within 5 years?

Similar to Treas. Reg 1.72(p)1 Q20, section b, example 1, iii?

This is a question that came up in a discussion. I'm currently operating on nearly zero information, so my apologies for that.

Say you have some sort of association/organization that is tax exempt - say the Boy Scouts or Girl Scouts. Apparently the local troops have the option to participate in the plan "sponsored" by the national organization. From what came up in the discussion, (now relayed to me 4th hand!) the local troop can set up their own private, "outside" DB plan if they prefer to do that instead. I'm assuming that if this is true, the Scout plan must be a "Multiple Employer Plan."

If the troop already has a plan through the Scouts, are there any particular problems that you know of if they want to get out of that one and establish their own separate plan? I'm not sure I see any special problems, (difficulties moving assets, perhaps, for example?) but I thought I'd see if you DB types have any special caveats?

Thanks!

I have a client (the wife) who is still working at her job and will retire some years down the road. She and her husband are getting a divorce, which should be finalized relatively soon. The husband is retired and is currently receiving his pension in the form of a J&S annuity. They each want to keep their own pensions after divorce and remain each others J&S beneficiaries so that if one remarries, the new spouse would not receive the 50% part of their benefit. Each is listed as the others spouse right now.

Is a QDRO needed for either/both of the pensions? I assume there may be different answers b/c his pension is in pay status???

Tried to find this. Actually went to the 2009 instructions before I got on here. I'm also not sure if this should be a 5500 or DB question.

At any rate, for 2009 do one man DB plans file a 5500 or an EZ with their Schedule B? Yes, I know it's supposed to be called something else.

thanks

Christopher

IDP Cash Balance, single employer (not a controlled group either) plan was established in 2007, the effective date was 01/01/2007, signed 12/31/2007. Calendar year plan, calendar year corporate sponsor. The Empoyer EIN ends in 9. I thought that put them into cycle D.

We submitted for a D letter in January 2008 because the end of cycle D was over 2 years away.

The IRS Determination letter recently arrived (favorable) and it says that the letter expires 01/31/2013. January 31, 2013 is cycle B, not D. Did the IRS goof and simply give a new plan 5 years for their first D letter?

Another employer (exact same scenario as above in every detail other than their plan name and name of the sponsor) - they got their D letter in Nov. 2008 and that letter says it expires January 31, 2010 (which we expected).

Do we trust the 2013 date, or restate for cycle D and submit on cycle now?

Does anyone know if these distributions can be made under 457b plans?

An individual was a 25% owner at the time he sold shares to the ESOP and took a 1042 election.

it is now 10 years later, and the individual is no longer a 25% owner.

is the person eligible to receive shares (the loan is now paid off), or does the nonallocaton period last forever because they were a 25% owner at the time of the sell.

I was opening up investment statements and included with the statement was a letter from the investment company. The letter started out, "The Economic Stabilization Act of 2008 contained a provision that extended the date by which Form 1099 must be mailed to February 15."

This is the first we have heard of this. I tried to find an answer at the IRS web site but was unsuccessful.

Does this apply to all 1099 filings, or does someone know if this is specific to brokerage firms?

Thank you.

Kate Smith

Hi,

Client has a number of participants that are laid off, through reading I understand that being laid off may or may not be a distributable event, depending on a number of items....(unemployment comp and such). Is there a certain time frame when you can consider termination.....

I was just wondering how others have dealt with 'laid off' participants.

Also, lets say the laid off participant is rehired before distribution has happened, I would think that you must stop the distribution?

Thanks for the help.

Are there any restrictions (e.g,. under the IRS proposed regulations) on a Company charging "old" employees one rate for heath coverage and employees hired on or after a certain date another rate (given that new employees, by defintion, are non-highly paid)?

I have a question regarding prohibited transactions and a Roth IRA, LLC. I have an owner of a building who wants to transfer the building to an LLC at fair market value. The owner of the building still wants to occupy the building and pay fair market value lease income to the LLC under a triple net lease.

The tentative plan is the members of the LLC will all be ROTH IRAs, including a ROTH owned by the original owner of the building. The ROTH IRA owned LLC may eventually own 10-20 buildings all structured as indicated above, meaning all the ROTH’s will be owned by the former owners of the commercial real estate.

This appears to be a series of prohibited transactions since the owner of the building is technically the LLC, the LLC is owned by ROTH’s which are owned by the buildings tenants and former owners. Do you agree or is there a way to structure the arrangements to not violate the prohibited transaction rules? Would the answer be different if the LLC was only owned by 2 ROTHs’? 50 Roth’s?

A law firm has 3 partners and one employee has been described as a "non-equity owner" that owns 10% of the business. His compensation is based on his ownership percentage.

For qualified plan purposes, is there any difference between an "non-equity owner" and an "equity owner"?

From what I've read, non-equity owner sounds like a title more than actual ownership in the firm. There is no buy in, and their authority is limited, so I'm not sure if this is a true owner or not?

A 457b governmental (non ERISA) plan has a loan program that allows one loan. A participant sent in an ACH payoff of the first loan and a second loan was issued. However, the payoff had insufficient funds and did not go thru. Now the first loan has been reinstated resulting in two loans, a loan program violation. Participant refuses to payoff first loan. What is the remedy - default the first loan, but then technically the second loan should be payroll deduction and it is not. Also two loans are not allowed, but I do not think the IRS or ERISA Prohibited Transaction rules apply to these plans.