How much of a pain in the butt is this? Any guidance issued out there?

Just checking to make sure I am thinking correctly.

Partial plan termination occurred and employees laid off because of employer initiated action were 100% vested. If some of the employee who were previously laid off are later rehired, new employer contributions would be subject to the vesting schedule counting past service correct?

Pretty simple question on the 1099-R for a QDRO payout to the Alt. Payee (who was the spouse). [she took the cash which I know is IRS Code "2" because the 10% doesn't apply, just ordinary income tax.]

My question relates to the 1099-R form item box "total distribution". Do I mark this box because this is the total distribution for the Alternate Payee of her portion of the Participant's balance or is the box left blank?

thanks in advance & hope everyone has a good Turkey Day!!

For employers wishing to maintain a SEP IRA plan, the Serive has provided a Form 5305-SEP as a kind of "prototype" plan document. In order to be eligible to use the Form 5305-SEP, however, an employer must not currently maintain another "qualified retirement plan." Does anyone have thoughts as to whether, for these purposes, the Service would consider a 403(b) plan to be a "qualified retirement plan"? I have posted this question on another forum (targeted to SEP questions), but received to replies, so I thought I would try posting here, too.

Thanks

There was a post close to this but not right on point. If an employer has a SIMPLE-IRA and makes matching contributions to it, but fails to do so for a given year, what are the ramifications? Obviously they would not be able to deduct the contribution until it was made, but if the contribution deposits goes beyond the close of the following year (calendar year, makes deposit on 2/15/09 for 2007 year), what are the ramifications? In this situation, they still have not made the 2007 contribution, and may not be able or willing to. My thought was that in addition to losing the deduction, the SIMPLE IRA would be invalidated and the employee contributions would then be considered deductible IRA contributions subject to those lower limits.

Am I on track?

Tim

The following was from the 2009 EA meeting. The gist was that a contribution could not be deducted for a (tax) year earlier than the (Plan) year for which contribution was claimed on schedule SB. Does anyone have an update or confirmation on this?

•Can employer claim prior year tax deduction for grace-period contributions reported on current year’s Schedule SB (tax year = plan year)?

-Some authority for claiming deduction

•Regs. §1.404o(a)-14(d)(2)(ii) and §11.412©-12

•Rev. Rul. 77-82

•PLRs/TAMs 7945115, 8210014 (TAM 200604040 revoked for contributions for hours worked in current tax year), 8714008

-Current IRS ruling position apparently ties deduction to reporting on prior year Schedule B/SB

•Rev. Rul. 76-28 (plan must treat contribution as if actually received on last day of employer’s tax year)

•PLRs/TAMs 199935062, 200311036, 200523033, 200526022–How to apply when tax year ≠plan year?la

Is anybody aware of cases that discuss whether a failure to maintain tax qualified status is also a fiduciary breach under ERISA

Scenario

Individual owns minor% share of Partnerships A, B & C. There are no employees at these partnerships.

Partnership A is owned 99% by Limited Partnership D

Partnership B is owned 99% by Limited Partnership E.

Partnership C is owned 99% by Limited Partnership G.

If Partnership F owns 99% of D & E, are Partnerships A&B considered a single employer via common control rules? Does it matter if they are limited partnerships or general partnerships?

For purposes of the individual establishing a defined benefit pension plan, would the individual be able to have multiple plans at A,B & C as separate employers? or is it limited to A/B(considered single employer due to common control) and C?

Please provide guidance - thanks!

I know there have been other discussions on this, but I want to make sure we are not missing anything. We have sent each RMD participant a notice regarding their RMD for 2009 and asked them to decide if they did or did not want to take their 2009 RMD.

If a plan has employees who did not take their RMD, are we required to attach the "default to discontinue 2009 RMD" amendment by 11/30 or is that just required if the employees wanted to roll over their RMDs?

Can someone explain to me how this works???? A few rank and file participants were moved into a rate group with a HCE and give additional contributions. This allowed them to pass the ABPT. So basically all the participants in the group B (two groups, HCE-A, RAF-B) received the minimum required amount except the two particpants that received additional amounts. Is this allowed and how do you do this???

Hi,

I am having a brain spasm... Plan has 1 yos & age 21, quarterly entry dates. Employee hired 3/10/08 did not work work 1,000 in annv. year of 3/10/08 thru 3/9/09. However, by 9/30/09 did work 1,000 hours, I believe that they would entery 10/01/09 and not a 1/1/10 entry date.

Thanks,

J

Here is the scenario.

Company 1 is publicly traded.

Company 2 is owned 90% by Company 1.

Company 3 is owned 80% by Company 2.

What are the controlled groups here? I definitely see a Parent subsidiary CG with Company 1 and 2 and a Parent Subsidiary CG with Company 2 and Company 3.

But what about Company 1 and 3? If Company 3 is owned 80% by company 2, and Company 2 and Company 3 are a parent subidiary, does that make Company 1 and Company 3 a CG? Or does Company 1 own just 72% of Company 3 (90% x 80%) and therefore there is no controlled group?

What if Company 3 is only owned 60% by company 2? Does that change the CG situation?

Please provide guidance. Thanks.

Company 1 is Publicly traded.

Company 2 is owned 80% by Company 1.

Company 3 is owned 50% by Company 1 , the other 40% is owned by the Company 3's ESOP.

What are the Controlled Groups here? I definitely know that Company 1 and 2 are a parent subsidiary CG. But what about Company 1 and 3? Do I ignore the ESOP ownership?

Can anyone provide guidance as where I can find regulations to answer this question?

Thanks.

What "nursing services (including nurses' board where paid by the taxpayer)" mean? Is it possible to be reimbursed under a Health FSA for room and board for a nurse who provides medical services to a qualifying individual and the nurse lives with the participant and dependent 24 hours? Are there any conditions? I cannot find anything more specific under the IRC.

Multiemployer plan is still green (for 2009). Would have been red but for the election to continue with the 2008 status. Trustees have amended the plan "unilaterally" to require a minimum contribution rate, regardless of what the employer's collective bargaining agreement with the union says. Is anyone else experiencing this?

Can a plan sponsor of a top heavy plan amend the plan effective in a later year to exclude certain job classifications (non-union) and avoid future top heavy accruals for such "excluded" people? Assume they had accrued benefits that had not been distributed (or account balances in a DC plan).

We have differing opinions and cannot find this addressed. I say no. Anybody disagree?

Hello,

I have a would be client who had a 401(k) plan he terminated effective 10/15/08, all the distributions were completed by 1/31/09 and the final 5500 was filed. The client is now having a better year and would like to start a new 401(k) plan. From what I understand, the business never closed, so he would like to have something in place for 2009. I thought there was a 1 year wait period or is this with a Simple plan? I haven't been able to find any guidance on a wait time between establishing 401(k) plans. Thanks for your help!

Much of my time with small plans has been spent determining funding requirements, performing non discrimination testing and plan design for defined benefit plans and defined contribution plans. It also includes plan admin work for defined benefit plans. However, it hasn't consisted of the day to day operation and administration of small 401k profit sharing plans.

With that said, I intend to present what I see as a practical approach to handle the implementation of a new 401k profit sharing plan. Of course, in addition to information I receive at this web site I will do my own independant research.

I have a client who is a (S Corp) business owner with about 20 or so eligible employees. The client has just adopted a 401k profit sharing plan effective 1/1/09.

Below is what I consider a potential way to handle some of the plan implementation aspects.

1. Assistiing client with setting up a master account and participant sub accounts at Schwab.

2. Will provide the eligible employees with i) SPD, ii) salary deferral forms, iii) beneficiary designation forms, iv) Schwab participant account appplications and v) notice to employees for det letter filing

3. For the owner, other than choosing to receive cash or deferring it, are there other methods used to enable the owner to make a deferral? That is, say the owner is scheduled to receive $5k in compensation for the remainder of 2009, this means that she can only defer up to 5k. Given it is a small closely held business I am wondering if there is any flexibility from a practical perspective.

Curious to hear observations of the above mehods of implementing the new plan from an operational and practical perspective.

Thanks.

I own 100% of law firm A. My father owns 100% of law firm B.

Now, for affiliated service group determination, we each own 100% of each other's practice, because there is attribution from family, and age is no object. BUT, if we are truly independent, then there's no ASG, because we don't meet the other requirements for ASG status - no regularly performing services for each other or third parties, no financial flow, etc...

If we refer clients to each other, then this could throw us into ASG status, right - it it's regular and not just occasional?

I hate ASG questions.

and now you know.