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Earnings are taxable prior to age 59 1/2, there is no return of principal, and he receives a commission for amounts withdrawn.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

A company maintains a deferral only 403(b) and a SEP that is solely funded by the employer. Are there any issues this employer needs to consider with the new 403(b) regs?

if you have given out the safe harbor notice at least 30 days prior to the start of the new plan year and then decide, still before the start of the new year, that you don't want to do the safe harbor, can you still change your mind and stop it or do you have to give a new 30 day notice to stop it?

thanks!

I thought PPA had changed the way in which excess deferrals were handled, so that they would be taxable in the year of distribution (excluding the case where it's distributed after 4/15 of the year following the calendar year in which it was deferred), instead of the year of deferral. However, as I read through the 2009 Form 1099-R instructions, it says that the deferrals are taxed in the year of deferral. This leads to a few questions: do I have the wrong version? did the IRS not update this? where do babies come from?

Have just been assigned the groundwork for a new plan that my company has overtaken.

The plan document says that for Actuarial Equivalence refer to the PBGC immediate annuity rates as of the first day of the plan year.

I have been trying to get hold of these rates but getting confused.

Are these the same as the PBGC immediate rates for Lump sums(found these on the PBGC site) or no?

Also are these still a single interest rate or post PPA have been changed to refer to 3-segment rates?

Sorry if I sound dumb but please help as to where can I find the same?

This question assumes that a "rolling five" formula is adopted for withdrawal liability from a multiemployer plan and that for the withdrawing employer, a controlled group was created by property transactions in the last year of operations. The operating entity/actual employer failed shortly afterward and is defunct. The second entity owns the land on which the operating entity conducted business, has no other assets, and never had employees.

Would it be correct to calculate any liability for the surviving entity on the basis of the contributions made during the months in which the 80/50 tests are met, and only those contributions and not others during the computation period?