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).

Hi~

I'm looking for a simple (?) formula to determine HCE's. We've made the TPG election, since more than 20% of our employees would be considered HCE's if we didn't. Just when I think I understand the rules, I come across something that makes me question it.

Here goes:

I understand that step 1 is to list and count all employees that were employed any time during the LBY (2008). Let's say that number is 34. There were 5 employees in 2008 that had completed less than 6 months of service by the end of 2008.

My first question:

Is the number of employees that will be considered HCE's in 2009:

20% of 34 (34 x .2 = 6.8 = 7)

--- Or ---

20% of 29 (34 - 5 = 29 x .2 = 5.8 = 6)

THEN - we rank the employees by compensation in the LBY, and only the top ___ (6 or 7) employees are identified as HCE's for 2009, right?

Questions:

1) Would those employees identified as HCE in the test above, be an HCE in 2009 regardless of their 2009 income? (since compensation fluctuates, it is quite likely that others would have higher compensation)

2) What happens if one of those employees identified as HCE terminated in 2009? Does someone else take his place?

3) What if a 5% owner is also the highest paid employee? Would he be part of the ___ (6 or 7)? Or in addition to? Note that he was one of the 34.

I may have more questions, depending on the answers.

Thanks very much!

Are the wife and son in A because they are owners by attribution? Or can they be in B because they are non-commissioned HCEs and less than 10% owners (not taking into account attribution)?

Can I do an 11(g) amendment to add another group, Owners by Attribution Only to clarify and not allocate a contribution to the wife and son?

Thanks!

I used to have a handy chart on what to prorate (and what not to prorate) for short plan years. I have since lost it.

Does anyone have a handy guide that lists what limits get prorated (and don't)?

A question on the interaction of the Qualified Reservist Distributions under PPA and the distributions for deemed severance from employment under HEART.

Senerio

A plan does not allow for Qualified Reservist Distributions, but does allow for distributions for deemed severance. Participant takes a distribution under the deemed severance but also meets the requirement for a Qualified Reservist Distribution. Does he owe the 10% penalty tax?

My thoughts are that since PPA is written that the Qualified Reservist Distributions is "any distributon to an individual" and does not specify that the distribution must be allowed by the plan, the participant would get the penalty waiver. He would use the 5329 to show that he qualified for the waiver.

Does this sound reasonable, or am I missing something big?

Thanks

Have a client that discovered 4 payrolls into the year that 401(k) deductions were being made for several employees who had elected to stop contributing effective 1/1/10.

We suggested correcting the payroll system on its own, forfeiting incorrect amounts that were deposited, and using forfeitures to offset future contributions (yes, plan permits).

Client now wants to know if they can have that money back, since it was a payroll error. I haven't been able to find anything that would allow this, so any insight would be appreciated.

05/31/2009 plan year end was extended on December 15, 2009. Client just received a rejection notice dated Feb 1 stating that the extension was not filed timely. It references 5500/8955-SSA. Lokks like a problem with the new SSA?. Has anyone else seen this?