For the plansI am submitting for determination letters for the EGTRRA restatements, how far back is the IRS looking for documentation?

For plans that have a GUST-related DL, I understand it will stop there. But we have a bunch of plans that were on a GUST prototype, and most only have the opinion letter. (And many are on Non-Standardized docs.) We are now putting them on a VS and want the DL.

I seem to remember the folks on the IRS panel at the ASPPA conference webcast saying they are only looking back to GUST docs, and that a plan would only need the opinion letter (and not the DL) because that was part of the reason to have opinion letters in the first place.

I know that those types of events are not the official IRS stance, but has there been any other guidance on the issue?

I have a cross tested profit sharing plan, one person per class. For 2009, some of the profit sharing contribution will be made in employer securities, and some will be made in cash.

The employer wants to individually select the ratio of cash to employer securities comprising each person's contribution allocation. So participant A might get all cash, participant B might get all employer securities, and participant C might get half and half.

Obviously the entire contribution for each person will need to satisfy the ctoss-testing requirements, but is there a BRF issue with respect to the allocation between securities and cash?

Dog

I know I have kicked this around before, but wondering what most people are doing.

I am using Relius VS document. I was always under the impression that it was Relius' legal department's interpretation that a year of service was credited on the last day of the determination period.

Example: Plan with dual entry, age 21 and 1 YOS (with 1,000 hours). Person was hired several years ago and has never worked 1,000 hours in either her first 12 month period or in any subsequent calendar year (using plan year switch). She worked 1,002 hours between 1/1/09 and 6/30/09 and then terminated in August, 2009. Using my logic that the YOS of credited on the last day of the year, I figured she would not enter as she wouldn't get CREDIT for the YOS until 12/31/09, but my admin. system is bringing her in on 7/1/09, because she is getting credited with her YOS on 6/30/09. If she had not terminated, I would have expected her to enter on 1/1/10.

The Relius SPD says that "you will have completed a YOS at the end of any following Plan Year during which you were credited with 1,000 Hours of Service." This tends to back up my thought that this is how Relius' legal staff interprets the provision. (The document's definition of YOS doesn't get that explicit .... it just mentions the 12 month period.)

Thanks.

James

Just wanted to make sure of what date to put in 5330. Excess aggregate contributions were for plan year 2008, not distributed by 3/15/09. The 5330 will be filed this week with the 10% tax. Do I enter this year as the dates or do I enter 2008 for the filer tax year?

Where an IRA beneficiary is also an employee/shareholder of a C corporation owned in part by a terminating ESOP, can the shares in the ESOP be rolled over to the IRA beneficiary, even if the IRA as a result owns more than 10% of the value of all outstanding stock?

Is anybody else getting IRS penalty letters for 2006 or 2007 calendar years? My clients all filed their forms on time and yet they are getting hit with a penalty of $15,000.

Are IRAs subject to 10% limit on employer stock under 407(a)?

Is my understanding of this correct?

No tax advantage, no 401/410 testing... it has to be in writing...

Basically its a promise to an employee or group of employees that upon their termination they will get x amount of dollars.

Anything else?

Partnership P has a 401(k) plan covering two individual unrelated partners A with 70% share & B with 30%. The business has no employees.

A owns 100% owner of corporation X &

B owns 100% owner of corporation Y.

Corp X & Y each derive income from partnership P.

A & B are paid on W-2 from X & Y

What are the issues with X & Y each sponsoring a defined benefit plan for A & B respectively? ..... 401(a)(26) comes to mind

Are there any restrictions to using the full yield curve for a 1/1/2009 DB valuation?

For the 2009 year, I believe we can go back 3 months before the start of the plan year. October 2008 would provide the most relief.

This plan had enormous losses in 2008 but have gained back all that was lost. A reduced minimum for 2009 would sure help.

Thanks.

I have been stuck paying the AMT the last few years. If I convert an IRA to a Roth IRA would the payment of tax on that conversion allow me to reduce or eliminate my AMT payments?

Facts:

-An employer sponsors the following three plans: (1) a 401(k) plan, (2), a money purchase pension ("MPP") plan, and (3) a nonqualified excess benefit plan.

-The MPP plan provides an annual nonelective employer contribution equal to 10% of base compensation.

-To the extent that a participant elects to make deferrals to the 401(k) plan and the annual additions credited to his accounts under the 401(k) plan and the MPP plan exceed the IRC §415© limitations, annual additions under the participant's MPP plan account are reduced first and contributed to the participant's account under the nonqualified excess plan.

Question: Because nonelective employer contributions under the MPP plan may be cut back in order to satisfy the IRC §415© limitations depending on the level of elective contributions made under the 401(k) plan, does the nonelective employer contribution under the MPP plan constitute an impermissible contingent benefit under IRC §401(k)(4)(A) and Treas. Reg. §1.401(k)-1(e)(6)(i)?

Suppose an employer has a basic safe harbor plan (graded match up to 4% for 5% deferral), but also does auto increases up to 5%. Employer has given a conforming and timely safe harbor notice for the 2010 plan year, but has now decided to add auto-increases to 6% and 7% for NHCEs only with a corresponding additional .5% match for each 1% increment above 5%. The employer would like to start this effective Jan-1-2010. Of course, the safe harbor notice already given did not mention this additional match.

If the employer gives a new notice now and amends the plan before year end, will the safe harbor status of the plan be affected? Seems to me the regs only deal with timely notice needed to validate a safe harbor formula, not an additional benefit. Since the new match and auto-increase are in excess of what is required for safe harbor and will be available only to NHCEs, couldn't the employer adopt this change and give notice at any time? On the other hand, the reg requires the notice to describe "any other contributions under the plan . . . and the conditions under which such contributions are made." Would amending the plan now invalidate the prior notice and prevent the employer from providing the additional auto-increase and match? What if the increase were made available at employee election, instead of under an auto-increase arrangement?

If an employer makes a corrective contribution in compliance with EPCRS do they get to deduct that contribution? If so, for what year?

ESOP terminates and participant, who is both an employee and owner of the sponsor, wants to roll over the shares of employer stock to a self-directed IRA. PT?

Plan terminates and participant, who is both an employee and owner of the sponsor, wants to roll over the shares of employer stock in his esop to an IRA. PT?

Who (in your opinion) is the most knowledgeable senior person at IRS with respect to multiemployer plan funding rules? If you can offer two names, even better.

What if anything is the responsibility of a terminated 401(k) plan that is trying to distribute all of the plan assets. We are aware that a DRO may be pending. We have been asked by the attorney for the alternate payee for sample paperwork but we do not have a DRO or even a preliminary DRO. The participant has been given auto rollover notification and distribution paperwork but has not completed his paperwork, probably due to this pending issue. Can we just roll his entire account balance to the IRA?

I took over a plan for 2009 for which they want to terminate in 2010. Here is the deal...

The 2008 valuation shows that the Normal Form is 100% JSL however, they want to payout lump sums...lol

Can I convert this to a life only?