I am trying to get an clear picture on what effective interest rates to use for EOY plans. The only example I have from Mr. Holland did not address an existing PFB. Here are my examples please let me know if you agree or disagree and if you disagree please explain why and how you think it should be done.

Example 1: what would be the PFB for doing calculations (determining Shortfall, burn, etc), for a 12/31/2010 EOY valuation.

PFB existing at 12/31/2009 = $2000

Excess contributions for 2009 plan year at 12/31/2009 = $800

EIR for 2009 = 5%

EIR for 2010 = 6%

So I am thinking the PFB for determining shortfall, etc would be:

(a) Existing PFB brought forward at the current year EIR to be $2,120

(b) Excess contribution for 2009 at 12/31/09 brought forward to 12/31/10 at prior to be $840

Sum of a and b = 2,960.

Example 2: Or do you think it should be $2000 plus $800 brought forward at 6% to get 2,968?

The way I read the final regs I think it would be Example 2. What do you think.

As added by the Pension Protection Act, Section 101(l) of ERISA requires the Trustees of a Pension Fund to provide an estimate of the dollar amount of withdrawal liability. The Section then states that the Trustees may impose a reasonable charge to cover the "cost of copying, mailing and other expenses involved in furnishing the notice." This language seems to only allow the Trustees to charge for the expenses of sending the notice and does not allow a charge for the actuarial fees in preparing the amount of withdrawal liability. Is this right? I have a Pension Fund that wants to charge $2,500 for the actuarial fees in preparing the estimate (which seems excessive in any event). Thanks.

The 8717 instructions describe an exemption from the User fee "...that applies to all eligible employers who request a determination letter within the first five plan years or, if later, the end of the remedial amendment period that begins within the first five plan years with respect to a plan...An application for a defined benefit plan from an eligible employer for a plan that was first effective on or after January 3, 1996, will automatically meet this requirement..."

I'm submitting the 5300 for a cash balance plan that was originally effectiving 1/1/2000, and is on Cycle D. The plan received a determination letter on 2/13/2003.

Does this exemption apply to my plan?

Thanks!

Safe Harbor Plan with enhanced match. No other Employer contributions permitted. Calendar year/plan year. Employer now (effective 3-1-10) wants to amend the Plan to add a Profit Sharing feature. Understand the prevailing thought is can't make changes to a safe harbor plan mid year (couple of limited exceptions) but just wondering what others may have done.

Seems crazy that the rules would not prohibit the Employer from establishing a separate PS Plan for this feature yet not permit the addition of the PS feature to the safe harbor plan.

OK, let's say we're the TPA. Participant sends us a letter of impending foreclosure. Let's say we prepare the paperwork for the client to execute, and the client signs off on it and we don't send them support for the hardship.

My opinion is that this would NOT make a fiduciary because the plan includes objective criteria and there is generally no judgment involved (for example, you either have medical expenses or you don't). I can think of a handful of situations where judgment would be involved.

Others in the office take the opposite opinion and say "approving it is a fiduciary function." I say approving it would be "performing purely minesterial" activities related to plan administration.

Assume the Plans use the safe harbor standards.

What do YOU think?

Hopefully this is an easy question. Are there any circumstances where a state university 403(b) plan WOULD be subject to ERISA Title 1? The plan has employer contributions, but I'm assuming this is irrelevant because the plan would be considered a governmental plan under ERISA.

We are in the process of finalizing w2 for the nonqual plan. I have a conflict with box 1. One item I pulled says to include Income in Box 1 and Box 12 using code Z. Another item only mentions Box 12 using code Z.

Anyone know which is correct.

thank You

Our employer allows employees to make their owed amount of insurance premiums to be taken out before tax. They also offer a FSA.

Does our employer need a separate premium conversion plan document for our pre-tax health plans that fall under section 125? Also, do these premium conversion plan documents expire every year, as in, the 12 months defined by section 125.

I guess my basic questions are: As the employer, is this something we have to keep on hand? Is this something we have to do every year? If so, what does an actual document look like and how do we go about filling out one? I've been trying to research this topic but am having trouble finding meaningful answers.

I need help in finding our what shock claims are when you are talking medical cost? Can anyone help?

Say we have a married couple named Jack and Diane

Jack earned W-2 compensaiton in 2009 of $22,000 and is age 60.

Diane had no W-2 compensation and is age 45.

Jack participated in a 401k plan in 2009.

They file a joint tax return and have AGI below all applicable limits.

Jack made a 401k Roth contribution of 22k (16,500 + 5,500) in 2009.

Do we agree that Form W-2, box 1 for Jack would show $22,000 since all contributions are Roth and taxable?

Is it true then that he would be able to make a $6,000 Roth IRA contribution for 2009?

And is it true that he could make a $5,000 spousal Roth IRA contribution for 2009?

This means with W-2 compensation of $22,000 Jack would make retirement plan contributions of $33,000 in total.

Is the above accurate?

Thanks.

I noticed the following language in today's newsletter from benefitslink (McKay Hockman article):

Note that a recharacterization may only be made when a traditional IRA is converted to a Roth IRA. A recharacterization may not be made when the conversion is from a 401(k) (or any other qualified plan) to a Roth IRA.

http://www.mhco.com/Library/Articles/2010/...har_010810.html

Any additional info explaining why (reg citation?) recharacterization back to a qualified plan is not permitted would be great. Thanks!

Basic question. Plan has last day rule. Employee terminates 12/31. Are they eligible for part of the contribution? Relius excludes them from the contribution since they have a termination date.

Why is it that the last two Presidents want to get rid of 401ks as opposed to making them better?

First it was Bush with his LSA, RSA, and ERSA Plan.

Now its Obama and Retirement Annuities.

Obama to meddle with your retirement account?

Hi all,

What's the current thinking on allocating assets among participants in an underfunded, non-PBGC-covered DB plan?

May we simply allocate the available assets among all participants in proportion to their PVABs?

Or must we pay certain classes of participants in full? If so, which participants must be paid in full? e.g. NHCEs?

Non-owners? Non-50% owners? etc.

TIA.

.. Scott

Line 3b of Form 5300 asks if the plan has rec'd a Determination Letter. If yes, it asks for the "Number of Amendments".

I am uncertain if this means the number of amendments since the last determination letter, or the number of amendments since the last time the plan was restated.

In my situation, the last Determination Letter was dated in 2005. My plan was restated for EGTRRA in 2009. Amendments made from 2005-2008 were obviously incorporated into the restatement.

So, do I indicate on 3b the number of amendments since 2005 (last DL) or since 2009 (restatement)?

The preamble to 409A permits a plan to distribute the lump sum value of a non-qualified plan benefit if the PV is less than the 402(g) limit, even if the benefit has already commenced as an annuity. When we restated our plan to comply with the final 409A rules we incorporated this option. However, we never created the methodology to use calculate PV, post benefit commencement.

Our qualified plan contains a lump sum option and explains the calculation methodology. I'm thinking the simplest option would be to follow the same methodology, without regard to the aggregate value of prior monthly distributions.

This situation arose because employees did not make 409A elections and defaulted to the J&S annuity option, and because the interest rate we use, the 30-Year T-bill rate, jumped from 2.87% in December 2008 to 4.49% in December 2009.

I invite comments from the community.

LL&P.

Corporations A B and C each maintained a 401(k) plan. Each companiy was acquired by company D and each plan was merged into company D's 401(k) plan, which is now being filed for a determination letter. It has now been discovered that the plans for company A B and C may not have been in full compliance with GUST or subsequent amendments. If the IRS discovers the mergers upon the review of company D's plan, this could be a problem???

I'd like to file a VCP to clean this up, but the question is under what plan do I file the VCP? Since plan's A B and C do not exist any more, and plan D is tainted, I will file under plan D's name and disclose the mergers of A B and C. What I don't want to do is to file three or four separate VCPs. please confirm that one filing will take care of this. tnks.

We have an employer that conducted a dependent audit. Some employees did not respond and therefore dependents got kicked off. Now there are employees coming forward with the appropriate documentation verifying dependent status. If the employer wants to permit the re-enrollment of the dependents, is there anything that would prevent the employer from charging the employee an administrative fee of some sort? Kind of like a penalty for not reading their mail, taking it seriously, responding, etc...

Anyone else frustrated with the fact that the 1096 and 945 forms on Relius Gov. forms have still not been released?

We send everything out to our clients and while I can put off the 1096 and 1099-R Copy A filing forms alittle bit, the 945 is due to be filed by Jan. 31st.

Not to mention the fact that I don't want to have to send our clients 2 different mailings on this stuff; one is complicated enough for some.

We're thinking of looking for a new 1099-R forms vendor.

Others?

According to our Plan Document, our Plan can use forfeitures to reduce the employer match. Our TPA incorrectly used it to reduce employee contributions. This happened in 2006. How does our Company correct this error? Do we just give an amount equal to the forfeitures used in 2006 to our current forfeiture account?

Any help would be appreciated.