A non-owner who is still working turned 701/2 in 2004 and elected to start taking her RMD. Can she now stop? I can't find the answer to this question anywhere.

Thanks

A 401(k) prototype used by a Dr.s' Group makes a safe harbor match AND a nonelective discretionary contribution. Because of the nonelective discretionary contribution the plan then is subject to the top heavy test.

The plan wants to reduce the cost of the plan. They will continue to make the safe harbor match; will not be making the nonelective discretionary contribution; and will be excluding the highlys from the the employer match.

Two questions:

Do these seem like reasonable ways to reduce costs?; and

Does any reader have any other/alternative suggestions?

All responses will be gratefully received and appreciated.

Did anybody else read ASPPA ASAP No. 09-44 and come away thinking that cash balance plans needed to be amended by 12/31/2009 if their existing interest credit might not satisfy the eventual final regulations?

IRS Announcement 2009-82, issued a couple/few weeks ago seemed to say that you need not amend the interest credit until after final regulations on hybrid plans are issued, provided that the plan is amended before 1/1/2011 (if it needs to be amended at all). I took that as basically a 1 year delay in the required amendment and change.

Then ASPPA ASAP 09-44 comes out and references and discusses 2009-82 but I cannot determine it's conclusion if other than that plans must be amended by 12/31/2009 if the interest credit is inconsistent with the final regulation.

Can anybody clarify the rules and amendment requirements if, for example, a CB plan currently credits a flat 5.50% and would prefer to retain this until forced to change? Assuming that 5.50% is no acceptable under final regulations, does such a plan need to be amended by 12/31/2009, or 12/31/2010?

A client with Schedule C income recently set up a one person LLC and plans to report all income on Schedule C. He has an existing Keogh. I understand he obtained a Taxpayer ID for the LLC. I am wondering if anything needs to be done to the KEOGH plan adoption agreement - is this a new adopting employer even if all income is going to go on Schedule C? Or, do we continue with one Keogh, no changes, etc.

Thanks for feedback.

Am I right in concluding (generally) that:

1. qualified stock option plans and non-qualified stock option plans are not covered by 409A to the extent the requirements of the regs are satisfied; and

2. restricted stock grants are not covered by 409A if the employee does not get to transfer the stock until immediately after a substantial risk of forfeiture has lapsed? With regard to question (2), what if the board terms the plan and accelerates the payments before the restrictive period has elapsed? Does the short-term deferral exception still apply? Thanks.

If I have a profit sharing plan and the decision was made NOT to submit for a new determination letter, do I still need to restate for EGTRRA to remain in compliance? Any thoughts? Most of the guidance refers to the remedial amendment cycles etc.

Does anyone have a very general sense for how variable a long-term employer's withdrawal liability is from year to year where the plan uses the presumptive method? I know it's the least variable of the methods for calculating withdrawal liabilility but wanted to get a more tangible understanding of how it compares. Assuming typical investment experience, what kind of variability can be expected - 10%, 50%? I realize there are many factors, but if anyone has clients who have been in a plan for at least 5 years and the plan uses the presumptive method, I'd appreciate any info about the w/d liab variability.

Anyone know where I might find some examples of calculations?

Reviewing two documents for the same plan.

1. Original document states that under $5K lump sums will be distributed within 90 days after end of plan year of termination of employment.

2. Proposed document states that under $5K lump sums will be distributed after a break-in-service.

Does 2 fail 411(d)(6)?

When I'm doing a DB val, I use a separate table for males and females. Say RP2000 Male combined funding for males and RP2000 Female combined for funding. Somebody in my office is arguing that I should use the Applicable Mortality Table for funding ...for both genders. We only do mostly small plans ...less than 10 lives.

I was under the impression that tables for funding were gender distinct?

Maybe someone has already run across this...participant has medical bills and requests a hardship. Just about the time the money is direct-deposited, the hospital says "oops, that bill is too high" and adjusts it to some minimal amount.

Is there any way to un-do that?

I moved a Roth account into a variable annuity. Now after 3 years, I finally got more info from my broker than prior to the move: Earnings are taxable prior to age 59 1/2, there is no return of principal, and he receives a commission for amounts withdrawn. He mentioned the surrender charges. I found this out by asking the broker to withdraw from the annuity to another Roth account. I'd like to seek recourse, but the amount may be too small.

Would you happen to know a remedy for this? A 1035 exchange, another broker or something else? Would moving from a Roth Annuity back to a regular Roth help?

I hope you may find time for this question.

Employee works for both employers in a multiple employer count. For the 5500 participant counts, these employees are only counted once right?

Relius released a technical update today regarding EFAST and short plan year filings. The way I read it, if the filing deadline for the final short year falls after 12/31/09, you have to use EFAST.

Anyone know what might happen to the couple of 5500's I filed several months ago on paper for plans that terminated in June, meaning their deadline would be 1/31/10?????? Should I be worried that they will say they weren't properly filed???

Thanks.

James

For employees whose salaries exceed the contribution limits of IRC 415 and therfore a QEBA has been established to pay the additonal amount over the annual benefit limit. Since the QEBA is not funded can we fund the QEBA by withholding additional from the employee and how can this be done?

Plan states that employee who is president and sole shareholder of solvent company may elect to receive $5,000 this year or upon separation from services, as an award for prior services performed.

Is this a deferred comp plan with a prohibited acceleration clause, or is it NOT a deferred compensation plan because it's constructively received simultaneous with the establishment of the plan?

In other words, is it possible to have a deferred compensation plan where the amount to be paid is undoubtedly constructively received when the plan was created?

A strict reading of 1.409A-1(b) suggests that it is possible (focuses on payment, not timing of taxable income; see also preamble at 19235, third column). However, another sentence in that section may indicate otherwise: "A LBR to an amount that will be excluded from income when and if received does not constitute a deferral of compensation[.]"

I read this language as NOT suggesting that amounts which can be paid in a later year but which are incapable of being tax-deferred escape section 409A.

Does anyone agree or disagree?

Prospect firm is looking to reduce 09 tax liability and currently has a SEP. 2 of the 5 employees are under 3 year eligibility requirement from existing Form 5305. Is it possible to amend an existing Form 5305 to lower eligibility down to 1 year on existing SEP or just setup new SEP with only 1 year requirement to allow funding for all 5 employees?

Client is a sole proprietor with approximately $17,000 in net income. Took no salary and does not wish to. Would like to defer entire net income.

Spouse has high income and contributes maximum to his employer plan.

Does not look like we can do this with a solo-401(k). Can 100% be deferred in a traditional PSP? If not is there another low-cost way to defer all income?

Thanks in advance and happy holidays.

DC plan has a proposed termination of 12/31. If assets are distributed say June 1 of next year, IRS will respect 12/31 termination date and not require plan doc to reflect changes after that date.

What is the authority for requiring compliance with procedural tax qualification rules after the 12/31 termination, e.g., QJSA notices & consent, etc.?

I understand that Michelle's Law applies to Health Flexible Spending Accounts and Health Reimbursement Arrangements, but I think it must apply to Premium Only Plans, too. And is the deadline to get these amendments done 12/31/09 (for calendar year plans)? I sure hope not.

I'm trying to design a defined benefit plan for two participants age 29 and 32 with a compensation of $35,000 each. They already have a profit sharing plan with a 401(k) and are justing looking for an additional contribution of around 6,000 each. Looking for suggestions

thanks