Clearly, a 401(a) plan and a 403(b) plan must be aggregated when applying the 402(g) limits and catch-up contributions. But what if the employer has a 403(b) plan and a 457 plan? Can the 50+ employee contribute $16,500 in elective deferrals and $5,500 in catch-up contributions to each plan, essentially "double dipping"? I have not found clear authority on this matter, but have noted that 457 plans seem to be treated separately for so many of the retirement plan rules.

Thank you!

Help!

We have a client who changed their name & ein back in 2005. 5500 for 2005 properly reflected these changes in the entity control section. Client recieved notice recently from IRS proposing a $15,000 penalty for not filing a final return for the old company/ein in 2006 showing a zero balance.

I called the IRS and they noted that the entity change reported on the 2005 5500 does not "close out" the reporting requirements for the original sponsor name/ein. Even though the sponsor just changed their name & ein, they are required to file a final 5500 for the former sponsor reporting transfers that never actually occurred. The rep noted that everyone does this wrong and it's not clarified on the 5500 instructions.

Has anyone else run into this? I can usually press the issue with the IRS and get it dropped with a letter but that's not working in this situation. I believe I can get the proposed penalty abated, but will continue to have to respond to annual inquiries until the client actually files a final return.

Any thoughts you may have on this would be most appreciated!

Have a client that is buying up medical related businesses in several states, all doing the same type of business. The client owns 100% of each separate entity. Each entity has about 40 potential participants and all together have about 200 potential participants. Could he have each entity adopt its own plan, each plan identical to the other, file separate Forms 5500, and avoid going over the 120 plan limit for audit? Of the 200 participants only about 40 will actively participate.

It was discovered by a f5500 preparer after 10/15 that on 10/15 (under extension) the employer simply mailed the f5500 to EBSA without having signed it. What to do?

1-Wait til EBSA rejects it for lack of signature, or sends it back for one

2-Employer signs an identical copy now and mails to EBSA

3-An identical f5500 is marked "amended" then signed and mailed to EBSA

Executive is entitled to severance benefit 30 days after termination for Good Reason, where the definition of "Good Reason" does not precisely satisfy the safe harbor and the amount of severance is in excess of 2x salary. Assuming the severance does not qualify for the 409A exception for separation pay plans under 1.409A-1(b)(9), can the payment still qualify for the short term deferral exception? It seems to me that it should qualify for the STD exception so long as the conditions constituting "Good Reason" qualify as a substantial risk of forfeiture.

Please let me know if you agree with the analysis.

Thanks.

Aaron

I have a plan that was 100% vested for the match & profit sharing. They have amended their plan to now have a vesting schedule for anyone hired after 1/1/08. The new vesting is a 2 year cliff. Would a BRF test be required?

Another BRF question, distribution options:

1) a group of employees within a plan are allowed in-service withdrawals prior to age 59 1/2. (5 years of participation and contribs must be in plan for 2 yrs) This is a protected benefit only allowed to a small group of ees. Does the plan need to do a BRF test since this option is not available to all?

Even though it doesn't make sense to do this, can't a plan allow in-service distributions prior to age 59 1/2?

Participant filed chapter 7 bankruptcy early in 2009, so his attorney advised him to stop making payments on his plan loan. We know that we need to report this as a taxable distribution. The participant wants to know when he can take out a new loan. I do realize that he may not be "credit worthy", but besides that, what other restrictions do we need to consider? If the plan only allows one outstanding loan, does this mean that he cannot ever get another loan?

In case you were following the Continental Airlines case, where several pilots allegedly (?) created sham divorces so that a QDRO could be used to get at qualified plan money, it appears the judge has said "none of your business" to the company.

http://www.chron.com/disp/story.mpl/business/6675081.html

shareholder took out a loan in December 2007 for $50,000.

In November 2008 he took out another $25,000 loan.

Plan does not allow for inservice distributions.

The employer has been self-administering this plan.

Their CPA prepares the 5500.

The November 2008 loan is in excess of allowable amount and so is a prohibited transaction and a deemed distribution for 2008.

The shareholder is making payments on the $50,000 loan and is current on that.

He has not made sufficient payments on the second loan.

He will repay the second loan before the end of 2009, with interest, which will cure the prohibited transaction.

Under the Sec. 72 regs, is the second loan deemed again in 2009 because it was unpaid on January 1st?

Thanks.

Can funds from a SIMPLE 401(k) be rolled over into a SIMPLE IRA?

The following questions was previously posted:

In information published by the DOL, it seems that the payment of investment advisory fees with plan assets is o.k. However, what if a participant goes out on his own, hires an investment advisor to assist with his investments in his 401(k)? This plan is a participant directed 401(k) where all employees use the same 21 funds. The employee feels overwhelmed and has hired a personal investment advisor to review his 401(k) account and provide investment advice for a fee. All plan participants have this same opportunity to use an outside investment advisor. Can the participant ask that the fees associated with this be paid from his account balance? In other words, could the investment advisor fees be paid from his account when this is done on an individual basis, and not an employer initiated/plan basis?

I am now investigating the same scenario and wonder if anyone can provide any comments, guidance, authority, etc.

Any suggestions on what to charge a single employer DB client for the PPA amendment? DC client?

Thanks.

My annual COLA & Rollover chart is attached in pdf format.

• It may be freely distributed within your organization. For additional permissions please contact me.
  

• Laminated versions of this and other helpful retirement related charts are available at Reference Guides
  

Note. This chart includes the correct 2010 HSA limits.

COLA_RO_2010.pdf

Back before I was 21 and eligible for my company 401k, my father helped me open a small IRA. I got statements on it for a while, but nothing for a while and recently I remembered it and decided I need to track it down and figure out what to do with it. I called the company it was with and they couldn't find anything under my name or SSN. Could they have just closed it if I hadn't done anything on it for many years?

I am looking for the best company to have my IRA ROTH with. I am currently with Ameriprise but I feel they are taking too much of my investments. Can anyone help?

I'm taking over a Defined Benefit-Profit Sharing Plan combo. Last amended 2003.

The defined benefit plan document says "If this is a paired plan the eligibility requirements must be the same." You guessed it, they aren't. DB is six months no hours and the PS is one year with 1,000 hours. Also one is a standardized plan and one is non standardized. Contributions have been under the 25% limit.

I've looked in Sal's book, but can not identify anything on point. There is a document issue, however is there a statutory issue? Also will there need to be a submission under EPCRS, lower the eligibility requirements for the PS plan and make contributions for anyone omitted?

What ERISA obligation/requirement, if any, is there for a multiemployer plan to provide annual (or other) estimates of withdrawal liability to employers?

I'm reviewing an employment contract for an executive of a private company. Among other things, the contact provides that within 60 days of a change in control, the executive may voluntarily resign and would be entitled to a severance payment equal to one year's salary payable in a lump sum within 14 days of separation. At the company's request, however, the executive would be required to continue working for 6 months before any severance would be paid.

While I don't think this qualified for any 409A exemption, I think it complies with 409A. Despite the reference to a change in control, the real trigger seems to be separation from service and the payment is due within 90 days of separation.

Am I missing anything?

Thank you.

Aaron

Employment contract provides for (i) 3 years of severance pay upon termination for any reason (to be paid monthly beginning with the month following separation) and (ii) a 3-year noncompete provision. However, the employer has the option upon termination to waive the 3-year noncompete, in which case no severance is owed.

As I see it, the severance arrangement does not qualify for any 409A exemption. However, it does seem to comply with 409A in that it is payable upon separation and according to a fixed schedule. I also don't see any issue with the employer's right to cancel the severance by waiving the noncompete provision, however I'm not sure I've considered every angle.

Does anyone have any thoughts or differing views?

Thank you.

Aaron