I'm just trying to get an idea of what people are doing with regards to certifying 2009 AFTAPS for calendar year plans in the absence of final regulations. Are they being certified and if so on what basis??? Thanks.

I am in this process of submitting our EGTRRA restatements for a favorable determination letter, as a newly designated ERPA i can now sign the 2848. What I want to do is add a CAF# to the 2848. What I intend to do is send in a EGTRRA submission for one of my clients and enter "none" on the 2848 next to the CAF#, and I will then receive a number in the mail.

My question is:

Is there any easier way to apply for a CAF number?

If not can I take the 2848 that I sending out with my first EGTRRA submission, fax it in to the CAF fax number that I found on the IRS website and then send it again with the EGTRRA submission. Maybe this would speed up the process.....(sorry for the stupid question but everytime I call the IRS I can't get an answer).

I want to have the CAF # as soon as possible so I can enter them on all of our 2848 that we send in with our EGTRRA submissions.

Assume the employer makes HSA contributions for those employees who participate in the employer's HDHP.

The penalty, as I see it, for not meeting the HSA comarability rules is an excise tax equal to 35% of the amounts the employer contributes to all HSAs for that calendar year.

If that's correct, why couldn't an employer exclude everyone from the HSA contribution program except the sole HCE? Rather than potentially paying mucho bucks to other employees' HSAs, the employer is simply stuck with a small penalty based on the HSA contributions made for the one HCE?

Is there something I'm missing?

I am working on a very small plan where there is a last day requirement in order to be eligible to receive a Profit Sharing Contribution.

The owner of the company was the only eligible employee at the end of 2008, and wants to allocate the entire $10,000 profit sharing contribution to herself.

Will I run into any coverage issues? What type of testing is required on the Profit Sharing Contribution.

Thanks in Advance for the assistance.

We have a participant in a DB plan who completed distribution forms for an annuity payout. The next day the payment was made. Four days later, participant requests a change to lump sum. Tax withholding has not yet been sent out, if amount is repaid, we could reverse the entry, but should we?

Are there any circumstances where a negative target normal cost is possible?? Should a participant be floored at zero or should the floor be at the plan level?

This goes back to the IRS position where they do not particularly care for negative costs.

One of our recession-hit plan was unable to put in the last $10,000 of the 2008 MRC, after electing to waive off the entire COB.

Can I recertify the 2008 valuation using WRERA provisions like asset smoothing ( hadn't done that earlier ) so that the funding deficiency disappears?

Has anyone done the same or faced a similar situation? Is there a deadline for this, I thought it was sometime in October.

Looking for all possible help! Thanks.

A plan Sponsor inadvertently deposited their DB contribution into their 401(k) plan (plans are with the same vendor). When we noticed we had them transfer the assets from the 401(k) Plan into the DB plan. Later on I was told that this in fact can disqualify the Plan. The money should have been pulled out of the 401(k) plan as a mistake of fact, and then redeposited into the DB plan. Is this true? And what's the difference? I could argue if we had them pull out the money from the 401(k) it looks like the assets reverted back to the employer, which is a no-no also. What would be the correct way to handle this, by law?

A company will add an HSA option mid year. I don't know yet if this will be inside or outside their 125 plan.

The main question being asked is can this trigger a change of election wherein and employee drops their FSA in favor of the HSA. I say it does not.

My own question is can (or what's the use of) an employee have both an HSA election and an FSA. election?

Hello:

We have an ESOP that is being reviewed under Cycle B and the IRS is asking for our amendment to the ESOP for the final regulations to 409(p). The IRS indicated that the final regs 409(p) amendment must have been adopted by the plan sponsor on or before December 31, 2006, because the final regulations were effective January 1, 2006.

I recognize that on the 2006 cumulative list (which covers Cycle B submissions) that the final regs to 409(p) are listed on there; however, I disagree that a final regs 409(p) amendment was required to be adopted by the ESOP on or before December 31, 2006.

I have three questions:

1. Is the IRS correct that an amendment required to the ESOP for final regulations 409(p) on or before December 31, 2006 (the ESOP is a calendar year)? (Please note that if the answer is yes, I find this hard to believe since the final regulations were only issued on December 19, 2006).

2. If the amendment was required, is it the same language as is in the model amendment issued by the IRS in 2008?

http://www.irs.gov/retirement/article/0,,id=184380,00.html

3. Does anyone think that the IRS is just mistaken and is confusing the triennial methodology discretionary amendment (which is only required if the plan decides to use the triennial method). http://www.irs.gov/retirement/article/0,,id=173372,00.html

I sincerely appreciate any input.

Elizabeth

We merged several plans, and unfortunately the largest was not the survivor. So we want to file SSA's that show about 15,000 participants who had been reported as A's in the old plan over history as D's for the old plan and C's to the successor plan. Our auditor (who's also doing the 5500) is saying that they can't get the EFast to load more than 9,999 records for the SSA.

Anyone out there who has been successful doing that?

To make it more interesting, we'd like to do a cleanup sweep of all the terms who have ben paid out, to make sure that they are deleted. But that would give us in excess of a quarter million records. I'm not optimistic about that one.

A physician client wishes to make use of the self-directed brokerage account feature, which provides that the participant must use a broker dealer and invest in publicly-traded securities only. He has specifcally asked for the removal of such restrictions. However, we are concerned that the risk he is taking on is enormous. My questions are:

1. What exactly is a prudent investment under ERISA?

2. How could an individual invest in securities or even commodities without using a broker dealer?

3. What other risks does this request entail?

PPA 508 Amended ERISA 105 to require a DB Plan to provide a pension benefit statement at least once every three years (due for the 2009 plan year).

Originally for DC plans, FAB 2006-3 gave 45 days after the plan year to provide the notice, and FAB 2007-3 extended this deadline to the date Form 5500 is filed by the plan.

However, no guidance is given as to how long after the close of the plan year a DB plan has to provide the statement. Are practitioners relying on the 45 day DC plan deadline as good faith? The 120 day deadline to furnish the annual funding notice? Or another deadline?

Thanks.

I have a 401(k) plan that has as a distribution option installment payments figured over the life expectancy of the participant.

Say a person selects this method. But three years later, she wants/needs the money. Can she cease those payments and take a lump-sum distribution for the remaining amount?

A plan has NEVER filed as a large plan filer. This year the BOY participant count is 111, and 139 at EOY, including terminated participants. In reading Sal's book, I am under the impression that I can continue to file as a small plan filer because my participant count went above 99, but stayed below 120 (at the beginning of the year). The question is, because of the 139 participants at the END OF THE YEAR, if I were to get them paid out (the 29 termed) by the end of 2009, could I again avoid being a large plan filer if my participant count at the beginning of 2010 is still below 120?

Hi! I'm hoping to get some input on this subject.

1) Can 2 spouses working at different employers each participate in MFS?

2) Is there a plan year maximum for both participating in MFS as in dependent care flex spending?

Thank you in advance!

This year the IRS accelerated the deadline for filing partnership tax returns from 10/15 to 9/15. As such, we’ve been telling our clients that they need to fund their discretionary profit sharing contributions for their 2008 calendar year plans by 9/15/09 (opposed to 10/15 in the past).

Assuming a partner has the proper deferral election form in place by the end of the plan year (12/31/08 in this case), is it allowable that a partner can still make their 401(k) deposit by 10/15/09 or should they be made by 9/15/09 too?

Conservatively, I’ve been telling clients 9/15, but I was wondering if anyone has an opinion?

Thanks for any input.

I have a client that would like to merge their existing Keogh (HR10) assets into our MEP. Their Keogh is set up as a QRP and is a DC Plan. I've consulted with my counterparts and they indicated a merger of this type is not allowed in our plan but cannot provide proof within the code as to why. I reviewed Rev. Rul. 2004-12 but it specifically addresses Rollovers and not mergers. I've also reviewed Treasury Regulations, Subchapter A, Sec. 1.414(l)-1 but can't locate anything concrete to prove to the client why we cannot allow this type of merger.

The only piece of information I may be able to rely on is Rev. Rul. 94-76 and Rev. Rul. 2002-42, 2002-2 C.B. 76. "§ 414(l) transfer between dissimilar § 401(a) plans (or a plan amendment treated as such a transfer), the characteristics of the transferor plan continue to apply to the transferred assets held in the transferee plan"... although it doesn't specifically addresses merging a Keogh to a MEP we may be able to rely on this argument because we cannot guarantee the characteristics of the transferror plan will continue due to the fact that we are limited to the plan design of the MEP and cannot make amendments for individual Adopting Employers.

Any thoughts or suggestions are appreciated.

what do you do if the problem goes back more than 6 years or for years that the sponsor does not have records. for example, lets say you only have records for the last 6 years but you know the plan was administered the same way the entire life of the plan and you don't have records for any years beyond 6. how can you determine the contributions? should you even include those years in your submission?

I've got a 401(k) plan that uses the "deemed" (safe harbor) definition of hardship. The regs seem fairly clear in saying the Plan Administrator can rely on the participant's representation that no other resources are available. (There is the matter of participant loan availability - but that's not my question.) My question is this:

Can the Plan Administrator rely on the participant's representation that the hardship exists? Or, must the participant present an eviction notice; medical quote; proof of secondary school enrollment; etc.?

As I read the Regs, there is no rule allowing Plan Administrators to rely on participant representation that the hardship itself exists.

thx