I was wondering if anyone else has ever run across this situation.

Client firm is sold to a big firm. During the year the big firm revised the plan documents and moved the money to a different investment platform, shortly before the close of the year. Big firm refuses to provide us with new plan documents, and information about accounts on new platform. Problem is they demand that we do an annual valuation and prepare 5500. Requests for missing data are outright denied in writing, with person actually saying that since plan moved to a new platform we have no need of that information!

Anyway, we are intending to simply do work with data held. Of course, "product" will be heavily caveated, and our file includes the numerous written requests and denials. Our written service agreement does say work is based on data submitted and the client is responsible to provide us with all data.

I find this situation too surreal. Is this something we should report to the feds? Anyone have any suggestions?

Thanks!

I understand that I am newly eligible to convert my traditional IRA to a Roth IRA because the magnitude of my earnings doesn't matter like it did through 2009. (I've done the math and determined that it makes no sense to do so under my particular circumstances.)

But what about setting up a brand new Roth IRA to receive contributions beginning in 2010. Am I eligible to do that?

Client had both a PS plan and a separate 401(k) plan, and merged the 2 effective 1/1/10. Unfortunately, we now discover that the owner had a loan outstanding from the PS Plan at the time of the merger. The 401(k) Plan has not, does not, and has no desire to permit participant loans. Do we:

a) need to amend the 401(k) to permit participant loans,

b) need to default the loan since it is not permitted in the 401(k),

c) not have a problem since the loan is from a prior plan arrangement.

I'm hoping for c), but would be ok with a). Opinions?

I have a Top Heavy 401(k) Plan with safe harbor matching contributions. Client wants to make $20,000 discretionary profit sharing contribution. Does safe harbor matching contribution already made to participants count toward top heavy requirements enabling me to alllocate $20,000 to key and non key employees alike? I have found 2 different citings which appear to conflict. First is Sal's ERISA Outline Book in chapter 3b.58 seems to say that it does, while the 2009 Pension Answer Book Q 26.47 appears to say that it doesn't. AAARGHHHH Thank you for your anticipated help, I really appreciate your insights.

Hi,

If a participant in a 457(b) went over the "individual limitation" for 2009 (i.e., contributed to two unrelated employer 457(b) plans) and the plan allows participants to request this type of distribution, how does this get tax reported?

I assume that the excess contributions are not tax reported at all since the taxpayer would have included the excess amount in their 2009 1040. If the excess has earnings, I assume the employer will include that amount in W-2 for the year distributed?

I have looked every where for earnings tax reporting instructions and have come up dry.

Thanks!!!

thanks anyway.

Doctor is 100% owner of an LLC and 40% owner of an S-Corp.

In the LLC, he is the only employee. He receives contract work to provide services through a hospital, and those are his only clients/sources of income.

The S-Corp is his practice where he tends to patients of the practice.

This smells like an affiliated service group to me, but since the client bases are totally different, and everything is accounted for separately, I'm not sure.

Anyone willing to throw out any ideas on this one (besides ask your ERISA attorney to make a determination ).

Is it not possible to roll stock proceeds into an IRA to avoid paying taxes on it? Considering IRAs and started to educate myself and this is the first site I went too. Please summarize briefly about contributing and basic rules, thanks so much.

Participants can individually rollover their 401(k) accounts to a SEP-IRA.

My question is, can a 401(k) plan be merged into a SEP-IRA plan?

A client has failed their ADP testing, and will most likely make a QNEC to satisfy the testing.

They also make a year-end profit share, using the Integrated method.

Can the QNEC be used as part of the Integrated profit share?

I know it can be used to satisfy the gateway for New Comparability profit sharing, but wasn't sure about using it for an Integrated profit share.

Our firm does not administer Sec. 125 plans, so I'm admittedly a little green in this area.

I understand employee salary deferrals to a Sec. 125 plan. When would an employer ever want to contribute to a Sec. 125 plan?

We have a few calendar-year DC plans that terminated in mid-2009 whose trustees didn't pay out all of the benefits by 12/31/09. Since 1/1/10 is a plan entry date, do employees who meet the eligiblity requirements become participants or can there never be new participants entering a plan after its termination date?

Also, I can envision a couple of the trustees dragging their feet on the payouts to where a full year could elapse from their plan's date of termination. I remember some time ago hearing that a termination goes away after a year if the assets have not been distributed, making the plan an active plan again - is this accurate? BTW, the plan terminations were done via board resolution, so waiting for IRS approval of the terminations is not the reason for the delay.

If a plan has unreduced assets in excess of the funding target, but the assets drop below the funding target when reduced by COB, is there a funding shortfall causing quarterly contributions to be required? 1.430(j) regulation says that there is a quarterly if there is a funding shortfall and defines funding shortfall using asset reductions under 1.430(f)-1©.

Example:

Plan Year is 2008 calendar with EOY val.

As of val date:

FT - $100,000

COB: $10,000

Assets: $105,000

Assets reduced under 1.430(f)-1©(1) would be $95,000 and there is a shortfall, but assets reduced under 1.430(f)-1©(2) would be $105,000 and there is no shortfall. Are quarterlies required for 2009?

I have experience with how much to charge when a 15 person plan allows individual brokerage accounts or if they have a platform such as John Hancock or Lord Abbott.

Does anyone have any experience where they offer both? How much and what kind of additional work can I expect?

Any ideas are welcome.

We administer a 401(k) profit sharing plan that was effective 1/1/2008. No deferrals or employer contributions were made in 2008. We timely filed a 2008 5500 reporting $0 assets.

2009 is the second year of the plan and we need to determine if the plan is top-heavy. Is the plan not top-heavy since the key account balances as of 12/31/2008 were $0.00? Or should we (or can we) take the conservative approach and re-calculate the top-heavy ratio as of 12/31/2009 (in which case the plan will be top-heavy) and allocate the non-key employees the required top-heavy minimum since all key employees deferred > 3% in 2009?

Any thoughts would be greatly appreciated.

Thanks!

A profit sharing plan participant was mistakenly paid her benefit of $4,800 from the corporation account rather than the plan account. Benefit elections were signed, the employer just mistakenly paid the roll-over benefit from the company account.

We are thinking about just having the plan reimburse the company for the amount.

Has anyone else run into this problem?

A terminated DB plan is winding up and making it's final distributions, and the sponsor expects there to be a chunk of cash remaining once all expenses and benefits have been paid.

Currently, the plan provides that any remaining assets will be paid to a group of current and former participants that we don't have the records/information to identify based on an allocation formula that we don't have the records/information to apply. The population/formula is fixed and knowable in theory, we're just lacking the necessary records. We're looking for a way out.

Obviously, amending the plan to provide for a reversion to the employer isn't an option. If we went that route, the provision wouldn't be effective until 2015.

Alternatively, I'm wondering if we can amend the existing provision to instead provide the surplus assets to a knowable group of participants based on a knowable allocation formula. By changing this provision, anybody in the original group could likely go form getting something to getting nothing. When it comes to qualified plans, that sort of thing gives me the willies.

If this were an ongoing plan that was silent on the disposition of surplus assets upon plan termination, the default operation would allocate any surplus assets to participants. If that ongoing plan were amended to provide for reversion to the employer, I can't imagine any issue (aside from the five-year delay). Even though the participants have lost something in the abstract, you wouldn't say there was a cutback or that accrued benefits were affected in anyway. Until the checks are cut, does that approach ever change?

• Does the position change if an event occurs that allows us to identify, concretely, the participants that would be entitled to receive surplus assets?
  
• Does the position change once the plan actually terminates?
  
• Does the position change once the final benefit distribution is made, and the amount of surplus assets are known?
  

At the end of the day, we're just looking for a method to allocate the surplus that we can actually administer. The easiest solution would be to amend the plan to provide an alternate allocation section to replace the existing one. However in doing so, I want to make sure we're not negatively affecting any current or former participants impermissibly.

Any thoughts?

We currently use Relius for both Daily Val and balance forward plans. On the dv side, with the vru, online access and other features of Relius, our IT consultants have continuously told us that it is a very complex system requiring "more than the usual" amount of resources. That is, compared to a company that is running say, Datair, it is more involved. So, our IT expense is 2-3x more than it would be if we WEREN'T running Relius.

Are there any Relius users out there that outsource their IT and would be willing to share the name of their company? We'd like to rfp our IT to see how it compares and if we should consider other options.

Or, perhaps you can just indicate the number of hours on average, IT spends maintaining your system to help me gauge if our IT hours are in line.

thanks for any information you can provide.

bill

This is probably a stupid question but I've never come across this before.

We have a QDRO that calls for a 50% distribution to the alternate payee as of a specific date, adjusted for gains / losses. We've done the calcualtion and the attorney confirmed our numbers. But from what money type(s) do we withdraw the funds from? The participant has a 401(k) account, a match account and a profit sharing account. Participant is not 59 1/2. Do we allocate the withdrawal amount pro-rata across all money types or what do we do?

Any input would be greatly appreciated.

Thanks!

Are the phrases "at its sole discretion" and "in its sole discretion" equivalent? For example, Company A at/in its sole discretion can contribute

Or are there cases where it is more correct to use one or the other?

Or is only one the really correct phrase to use?

I see both and wonder. Thanks for educating me (again).