This question seems to come up everywhere I have worked. We are a non-producing TPA firm. Not CPA's. We do have an actuary on staff.

When a client terminates our services and moves their plan to another TPA, what is our obligation to provide copies of documents if the client has left owing us money, or if the client refuses to pay for copying costs? By documents, I mean plan documents, prior 5500's and admin reports, etc.

Our administrative service agreement has its own issues and really needs to be revised, but I'm wondering what our constraints are outside of the service agreement.

Thanks for any input!

Participant in a 401(k) profit sharing plan (with participant-directed investments) terminates employment and has an outstanding loan. All loan payments are current through termination date. Loan document states that loan repayments are made via payroll deduction.

Of course, when the employee terminates, they no longer have the ability to make loan repayments via payroll deduction.

Is the plan sponsor required to permit continued loan repayments after termination of employment (e.g., via personal check) or is this left to the discretion of the plan sponsor? The plan document does not address this issue.

Any input on this would be greatly appreciated.

Thanks!

I am an attorney in Oregon and I do not know much about retirement accounts, but something here does not seem right and I am hoping to elicit some direction. A small business owner set up a defined benefit plan. The business failed and he rolled over into a "Roll Over IRA" a significant sum he advanced on a home equity line of credit, filed for bankruptcy and is surrendering the home, which no longer has the value necessary to make my client whole. The debtor lists in his bankruptcy schedules he made $80,000 income for 2007 and $0 for 2008. The roll over occurred in early 2009. I am unsure he had the money in the "defined benefit plan" prior to the "roll over." I have requested documentation to prove or deny this fact. To me, advancing on a line of credit significant sums and then filing bankruptcy while attempting to take advantage of the exemptions at the expense of my client does not seem right. Any advice/direction would be helpful.

If the employer is paying the insurance premiums for life insurance policies held in the plan, what are the issues or possible issues involved? I've been trying to figure out if this was permissible and I don't find anything that specifically says it can't be done.

Has the IRS clarified what constitutes "significant benefits in the nature of medical care" beyond the Examples in Q&A 10 of Notice 2008-59?

We're dealing with a free, on-site clinic that offers a level of care somewhere in between the clinic described in Example 1 (physicals, immunizations, allergy injections, minor pain relief, and treatment of on-site accidents), which doesn't render the employees ineligible for HSA/HDHP, and the clinic described in Example 2 (all employee medical needs), which does disqualify them.

All the discussion I've been able to locate merely restates the Examples, and we'd like to know whether the IRS has spoken (even informally) about the shades of gray in between. Thanks.

ok - The 2009 RMDs were waived by Section 201 of the Worker Retiree and Employer Recovery Act of 2008. I know that if your first minimum was due in 2008 but you delayed it until April 1 of 2009, you must still take that RMD.

Any ongoing 2009 RMDs were waived by the Act.

Here is my question...5%+ owner turns 70 1/2 in 2009. First RMD is due no later than 04/01/2010. I believe that RMD is waived (as an '09 RMD), however the next RMD that would be due as of 12/31/2010 is still required as the 2010 RMDs have not been waived.

Agreed?

Just started with my first Aggregate testing.

The client has a DB plan along with a PS, 401(m) & Deferrals. I am aggregating all of them and testing on a benefits basis.

The software we use includes all the 3 DC values for the 410(b) testing but includes only the Profit sharing for the 401(a)(4). I thought the match should also have been included for the test? I know that the deferrals are not to be included for sure but as far as the match goes I am confused.

Also just wanted to confirm if the Deferral has to be capped at $15.5K for 410(B) even if the participant is more than 50 years old and has deferred $20.5K?

Any help will be highly appreciated.

Is it correct that we now send 5500-EZ to EBSA at Lawrenceville?

If a top heavy DC plan (profit sharing and 401(k)) has a dual eligibility provision (i.e. 1 month entry for deferrals, 1 year for profit sharing), a non-Key 401(k) participant must get a 3% PS contribution, right? (Assume a Key Employee gets 10%).

Now assume that the PS plan is permissively aggregated for 401(a)(4) with a DB plan that also has a 1 year service requirement, and the documents say that the DC plan provides the top heavy minimum.

What is the top heavy minimum for a participant who is eligible only for deferrals, 3% or 5%?

Michelle's Law extending coverage for 12 months for students who cannot attend school due to illness or injury will be effective for plan years beginning on and after 10/1/09. Part of the law requires employers to provide in "language that is understandable to the typical plan participant" the provisions of the continuation whenever we request certification of full-time student status. Does anyone know if the federal government plans to issue any model "language that is understandable to the typical plan participant" that can be used for this purpose? or are we on our own for drafting up a notice?

Instructions for Line 4l: check 'yes' if any benefits due under the plan were not timely paid or not paid in full. Include in this amount the total of any outstanding amounts that were not paid when due in previous years that have continued to remain unpaid.

My list of contributions to report here include all nondiscretionary

Top heavy

QNEC

Money purchase from previous years (also reported on Sch R)

Safe Harbor required employer contributions

Employer match

Not salary deferrals because they are reported on 4a (failure to transmit participant contributions within the DOL timeframe)

Comments?

I have a Sole Proprietor that had no income in 2008 but has a required contribution to his DB Plan.

He is now terminating his plan.

Can the contribution that was not deducted be paid to him with no taxes or must he roll it over to avoid taxes.

He is actually retiring so there will be no future earned income.

Thanks

ABC Corp, owned 100% by John Doe, shut its doors earlier this year. ABC Corp sponsors a 401k plan. There have been no 401k deferrals made since then and all of the employees were let go involuntarily. The Plan has not formally been terminated yet.

DEF Corp, owned 100% by Jane Doe, opened its doors a few weeks ago. Jane Doe is married to John Doe and it is not known if they have any children. Jane would like to start a 401k plan. Most of the DEF employees used to work for ABC.

There may be some bankruptcy concerns with John and/or ABC Corp.

Are John and Jane better off terminating the ABC 401k plan or better off having DEF become the new sponsor of the ABC plan?

A client received a call from a former participant. He requested a cash out of his account balance in the plan. Balance is below $1,000 (about $980).

Can the client cash out the participant without having the ususal participant distribution election form completed?

Thank you.

Kate Smith

We are in the process of taking over the administration of a 401(k) plan that utilizes the basic safe harbor match. When we reviewed the prior year administration reports we noticed that the client is also making a discretionary match equal to 100% of deferrals (not limited to any % of compensation) in addition to the basic safe harbor match.

It is our understanding that any discretionary match in excess of 6% of pay must be ACP tested since the plan is safe harbor; however the prior TPA did not ever perform the ACP test.

Could someone please confirm that the plan must be ACP tested in years where the discretionary match is greater than 6% of pay?

Any input would be greatly appreciated. Thanks!

Hi,

Plan has auto enrollment, if a participant wants to withdraw contributions, do we need to supply the participant with special tax notice, spousal constent?

Thanks for the assistance.

Jason

Are welfare plans subject to the EFAST rules for the 2009 5500 forms?

I am writing the new plan document for a start up plan. It will be a safe harbor plan for 2009. I know to make the effective date by 10/1/09, but does the first plan year have to be a short plan year?

Defined benefit plan terminated effective 1/1/09. Plan recently received favorable EGTRRA determination letter and elected not to file 5310 with IRS. It has now been discovered that plan failed to include about 20 employees in the plan. Plan wants to correct by making a contribution on behalf of said employees. Can this be done under EPCRS?

Defined benefit plan terminated effective 1/1/09. Plan recently received favorable EGTRRA determination letter and elected not to file 5310 with IRS. It has now been discovered that plan failed to include about 20 employees in the plan. Plan wants to correct by making a contribution on behalf of said employees. Can this be done under EPCRS?