Employer A is part of a controlled group and sponsors a calendar year 401(k) Safe Harbor Match (4%) Plan, call it Plan A.

Employer B is part of a controlled group with Employer A and has never sponsored or participated in a qualified plan.

We are restating Plan A for EGTRRA and the Employer would like to change the Plan to allow Employer B to participate in the Plan effective 4/1/2010? Can they allow this type of change to a safe harbor plan mid-year? The concern is with the limits on amendments and changes to Safe Harbor plans during the middle of the year.

Thank you in advance.

My PC XP uses various spyware tools -- Norton, Lavasoft (Ad-Aware), IOLO (Spyhunter).

I've read about Spybot and even though it is freeware with undetermined support, I am considering it.

Are there any users of Spybot? Any other recommendations?

Company B wants to buy Company A. Company A is mortgaged and financed to the sky. Company B has offered to aquired Company A for debt in a non-cash transaction.

1) What happens to the ESOP?

2) Do the ESOP members get a vote in the aquisition?

3) Are there any unforseen pitfalls?

Please forgive the newbie questions here!

W-2' wages is the plan's definition of comp for 415. Plan excludes fringe benefits (Personal use auto, etc). When calculating THM's, should pay be increased for these amounts?

Almost all of our plans include fringe benefits (especially the small ones that tend to be top-heavh), but once in a while on takeover, etc., we get one where fringes are excluded, and today I happen to be looking at one that is top-heavy...

I'm pretty sure we need to gross it up, but I wasn't sure if it was possible to exlcude them.

For many Consulting Actuaries the Hewlett Packard HP 12C has been a mainstay pocket calculator for over 25 years.

How about Smartphones? Is there any consensus on a really good Smartphone for the Consulting Actuary? What Smartphone, if any, do you use?

What about phone service contracts for Smartphones? What company do you use for phone service? What does it cost?

Thanks!

An employer is small enough that its health plan isn’t governed by Federal COBRA. But the relevant State’s “mini-COBRA” law applies. A former employee elects continuation coverage, and asserts that he is entitled to ARRA premium assistance. The insurer – recognizing that continuees generally, and subsidized continuees even more, are bad adverse-selection risks – has a procedure for trying to get information about whether an employment termination was involuntary. But the employer refuses to respond to the insurer’s requests for information about the termination. Is there anything the insurer can do to compel the employer to cooperate?

In MI - economy and business down.

Owner's son deferred a lot

Owner did not take a paycheck, but worked, Got a W-2 for .01. Yes a penny!!!!!!!!!!!!!!!!!!!!!

If no compensation I know I leave him off the test and it fails big time( Son has to take out more than he put in due to Interest)

If I can use the .01 and have dad in the test, it will help

I am, however, not comfortable with the penny for compensation. I have asked for a copy of the W-2. I cannot believe that they issued it. Got it they did do a W-2 for a penny.

Anyone EVER had anything like this or have any suggestions. What is the minimum compensation that you think someone has to have to be in the test.

I am leaning toward leaving him out.

Thanks for your help.

Pat

FACTS: Stock Acquisition occurred 12/31/08. Buyer continued Acquired Entity's plan for the first 3 months of 2009, then the Plan was terminated. (We know they should have terminated the Plan prior to acquisiton.) Acquired Entity remains, now as a controlled group member, and it adopted Buyer's plan as a participating employer effective April 1, 2009. All of Acquired Entity's employees now participate in Buyer's Plan. There are no termination of employment issues.

The HCE's (as well as non-HCEs) of Acquired Entity participated in their old plan for three months and then the Buyer's plan for the remaining nine months of 2009.

QUESTIONS: Do the mandatory aggregation rules of IRC 401(k)(3)(A) apply in this situation, which state that if an HCE participates in more than one CODA of the Employer, the deferral amounts in all such arrangements are added together in computing the HCE's ADP under each arrangement.

Of course, the desired answer is that this statute refers to ongoing plans and does not contemplate terminating plans of an acquired entity who happens to now be part of the controlled group. The affected HCEs were only eligible to participate in one plan at a time and never in both at the same time.

We've looked at the 410(b)(6) transition rule but can not conclude that we get a pass on the aggregation.

Any thougts and cites are much appreciated!

How do you complete the 2848 for a John Doe VCP submission without giving away the client name? Anyone run into this before? It seems that I would leave the taxpayer information blank, but then it doesn't seem like the 2848 would be valid.

A major insurance company takes the position that the use of an asset allocation model in a 403(b) plan triggers SEC scrutiny because the asset allocation model is a investment company (ie mutual fund) for SEC purposes. Does anybody know of any backup for this position. The asset allocation model consists of 5 model portfolios

a non profit is going out of business and they maintain a 457(b) for one of their key employees. What hoops do they need to jump through to distribute the funds? If I am not mistaken, the participant could only rollover the 457(b) to another 457(b) plan. Are there forms that need to be distributed to the participant? A resolution to terminate the plan? The original plan was effective July 2003 and the plan was restated in 2005 to incorporate regs Rev. Proc. 2004-56 amendments to the SBJPA and Automatic Rollover Amendment.

Should a benefit payment election form and notice of tax treatments be provided to the sole participant?

thanks

Do I have to have an HCE sign off an ADP refund? I know the refund is mandatory, but, for example, they could elect to waive out of the 10% withholding.

Or is the employer allowed to proceed without the elections? Is there any guidance on this?

We have an employee called to active duty effective May 4th. Under the terms of our plan, his coverage is continued through the end of May. The employee does not want to pay for coverage in May since he will be covered by TriCare. Is this a status change under the cafeteria plan rules? Unless TriCare is considered an "employee benefit plan of the employer of the employee" I don't think it is. Any thoughts?

We are working on a takeover 401(k) plan that includes a match allocation based on years of service. Eligibility requirements for the match are 2 years of service/age 21. The client wishes to use the following formula for the upcoming year:

0% match for participants with 0-3 years of service

25% match for participants with 4-10 years of service

50% match for participants with more than 10 years of service

Assume that coverage and nondiscrimination testing will pass (no HCE’s). With a participant receiving a 0% match until attaining more than 3 years of service, does this impose an impermissible service requirement for receiving the match contribution?

Have a situation where a participant should have been paid in 2008 but was not.

Section VII.D. of Notice 2008-113 appears to contain some inconsistent language. It states in the first paragraph that the amount is includible in income only when paid to the service provider. But then it states in VII.D.3. that the amount needs to be included in income in the year it was scheduled to be paid. Also, Section IX.B. states the correction notice is to be provided to the service provider by 1/31 of the year following the year the error is discovered, and the service provider must attach that notice to his return for the year the error is discovered.

Example: Payment scheduled for 2008 but not paid until 2010. If the employee must file an amended return for 2008 and include the payment as income for 2008, but the employee attaches the notice describing the error to his 2010 return, does that make sense? Shouldn't the notice be attached to the amended 2008 return? Or is the amount in fact included in income in 2010?

Any thoughts?

I have an Employer that contributed a QNEC to the plan during 09 for the 09 calendar plan year. Their reason for doing so was to slightly increase the acct balances of the nonkeys so that the plan would not be top heavy for 2010. They gave the contribution in the form of a QNEC so they could also use it in the ADP test.

The problem is that the prototype document they are using has an option for QNECs but it wasn't chosen.

Is it possible to amend the plan now for 09 to add the QNEC? They don't want to have to go thru EPCRS. I suppose the only other option is to call the contribution a profit sharing contribution but then there is an issue because it didn't go to the keys and it can't be used in ADP test.

We have a client who acquired the stock of another company a few years back and continued to have employees of that previous company continue to participate in the previous company's multiple employer plan. Our client has now done a plan-to-plan transfer from the multiple employer plan to its own 401(k) plan. When we submit for a determination letter request for our 401(k) plan, how much information do we need to include on the previous multiple employer plan and the plan-to-plan transfer itself? I know that when we merge a plan, we include all of the amendments, previous determination letter, etc. for the merged plan prior to the merger, but I cannot seem to find guidance saying whether this level of detail is also required upon a plan-to-plan transfer. I am asking because the multiple employer plan has been quite difficult to deal with and seems unwilling (without a fight) to provide us with all the information we would need. If anyone can point me to any guidance on this issue, I would greatly appreciate it!

Many thanks!

In the case of an off plan year, what compensation is used for ADP testing? Plan year or calendar year?

3 companies are part of a control group with 3 separate plans. 2 plans have standard 401(k) with discretionary match and profit sharing. The other has standard 401(k) with safe harbor match and discretionary profit sharing. I looked at the testing just done and it passes 410(b). Any issue here with disparate benefits? I would think it wouldn't pass because of that safe harbor piece.

A calendar year DB Plan was frozen to new participants 1/1/2008. The 2008 AFTAP was 80%. The 2009 AF TAP was 73% and a Notice of Benefits Restriction was delivered to all participants by 4/30/2009. The Notice did not state the 2009 AF TAP.

April 1, 2010 is creeping up and I've yet to receive census or asset information. Thus, as of 4/1/2010, AFTAP will be presumed to be 63%. Thus, there is no immediate change in the extent of the restriction.

My reading of the final 436 regs. leads to the conclusion that the Plan Administrator does not have to distribute a Notice of Benefits Restriction for 2010 unless the AF TAP would later be determined or presumed to be less than 60%.

Any comments?