Am I correct to say that in order for LLC Partners in a company to contribute to a 401(k) Plan they must have earned income on their K-1?

Eleven employees invested money into our company and therefore changed their status from employee to LLC member. Those members now rather than getting a salary or income from the company are receiving guaranteed payments. Rather than receiving W-2’s they will receive K-1’s. The company will have a net loss this year so on their K-1’s for this year they will show their portion of the companies loss (which will be nominal) and it will also have their guaranteed payments. Just to be clear the guaranteed payments will far exceed the apportioned company loss on their K-1’s.

All this being said I just wanted to confirm that it is okay for both the employees as well as the LLC members to participate in the 401K plan.

There will be no profit though as the company will lose money this year. Is their Guaranteed Payments considered profit?

Plan is a non calendar plan ending 9/30. For purposes of payroll cutoff dates, do you use the pay period ending or the date check issued? Example: Pay period endins 9/27 but check is issued on 10/4. Is this period included in the just ended plan year end or is it the first pay period for the new plan year end?

A calendar year DB plan is terminating 12/31/09, proposed distribution date is 3/1/09. We are in process of issuing Notice of Plan Benefits. Are PPA compliant benefit statements required to be issued also or would the NOPB be sufficient? Thanks.

Why do I get some spam e-mail messagesin benefits link? Just the other day I got one in benefits link about viagra.

I know I dont need viagra - I am a girl and hopefully Im not that old yet, ha!

My client's defined benefit plan extended an unsecured $150,000 loan to an unrelated person. That debt has become uncollectable, and as the plan is terminating, the client's intent is to write it off.

My question - is there any 1099 reporting requirement for a bad debt write-off? Again, this is not a participant loan, just a general note receivable.

Thanks!

Dog

Be sure to read your estimated Social Security letter. It contains:

Will Social Security still be around when I retire?

Yes. The Social Security taxes you now pay go into the Social Security Trust Funds and are used to pay benefits to current beneficiaries. The Social Security Board of Trustees now estimates that based on current law, in 2037, the Trust Funds will be depleted. Because people are living longer and the birth rate is low, the ratio of workers to beneficiaries is falling. Therefore, the taxes that are paid by workers will not be enough to pay the full benefit amounts scheduled.

However, this does not mean that Social Security benefit payments would disappear. Even if modifications to the program are not made, there would still be enough funds in 2037 from taxes paid by workers to pay about $760 for every $1,000 in benefits scheduled.

Is it no earlier than 90 days and no later than 30 days before the beginning of the plan year on an annual basis? If a plan has QDIA's, the notice MUST be sent to the participants, similar to safe harbor notice, yes?

And if the plan does not have QDIA then they do not have to issue a notice of something like "the plan does not have a QDIA"?

I have a plan that excludes a group of hourly people-they are not part of a union. With these exclusions, they do not pass the ratio test. This group of ees participate in SEP IRAs. Under normal circumstances, I would perform an Average Benefits test. How would that work with the SEP IRAs? If I can't run an ABT test, what are my correction options. Any help would be greatly appreciated!

Ok - plan ADP failed in 2007. Refund was done correctly prior to 03/15/2008. Participant reported refund on 2007 individual return as was policy then. January of 2009 a 1099-R was not completed for the refund as it should have been (with a code "P" for taxable in 2007).

Should a 1099-R be done this coming January (2010) and the code "D" (refund taxable in 2007) be completed so that the actual records coincide with the participant's '07 return and the plan records? Does this raise any flags?

One unon fund (call it Widget Workers) wants to make a loan to another fund (call it Widget apprenticeship) for purposes of purchasing land to build new building for training. Funds have some, but not all, common trustees....ignoring the issue of this being a prudent investment, is this a PT? Anyone aware of similar situations with PTEs obtained?

What are the fiduciary duties of an employer/plan sponsor in regards to beneficiary designations? In terms of keeping track of them, making sure they are completed, etc. Maybe fiduciary isn't even the right term, but how much effort do we need to put into them to best look out for the plan and its participants?

Thank you.

The regs seem to indicate that a change in assumptions will put my plan out of compliance:

1/1/2008 AFTAP - > 100%

1/1/2009 AFTAP certified on 5/15/2009 <60%

No COB or PFB

I have been operating as if the plan has frozen accruals and cannot pay lump sums. There has been one person that terminated employment and could have taken a lump sum if the plan was not certified.

Plan sponsor decides to move to asset smoothing and actuary decides to change other non-mandated assumptions (ret age). 2009 AFTAP > 80%

This would be a material change since the plan operation would be impacted. In addition, it appears that if I recertify, I should have applied my new certification from 5/15. Then my plan would be out of compliance with the terms of the plan.

Does anyone see a way out of this?

ERISA 403(b) Plan has several TIAA-CREF contracts used by participants. All elective 403(b) contributions up to 6% go to the RA account and the match contributions (match is 100% up to 6%) go to the RA account established for each participant. Amounts deferred above 6% go to a GSRA or SRA account.

Loans are not permitted from the RA account but are permitted from the GSRA account. How can this plan comply with the DOL requirement that the loan program be available on a reasonably equivalent basis to all participants and beneficiarires?

Thanks

A plan that is not covered by the PBGC can make a maximum deductible contribution to the DB plan and a 6% of comp contribution to DC plan.

However, if the DB plan is covered by the PBGC the combined plan limit does not apply and then the employer can contribute up to 25% to the DC plan.

Can an employer that would be eligible for the PBGC coverage exemption, choose to be covered by PBGC in order to obtain the higher DC plan deduction limit?

Eg prof employer w less than 25 participants.

Thanks.

Client wants to terminate ESOP that has been frozen as to new participants and benefits as of 12/1/05. We did not represent plan at that time but have been told that participants were given notice of plan freezing. We would like the effective date of termination to be 12/31/09. What notice to the participants is required? If notice is required what is the required notice period? I have found a lot of discussion about 204(h) notices for DB and MPP plans and plans subject to PBGC rules, but nothing for DC and ESOPs. I was going to just prepare a SMM with the PPA, HEART and WRERA changes and include a notice of plan termination date on 12/15 (15 days notice prior to termination date). Is this sufficient?

We have employees (about 40) who have been enrolled in the HDHP plan since 2007 and 2008 that refuse to open an HSA account. The employer makes contributions on a quarterly basis to HSA accounts. However, for the employees who have not opened accounts, the employer money goes into a general holding account. We continue to send letters and emails to these employees for the past 2 years informing them they must open a bank account. We continue to receive no response. Therefore, we have to go through the process of getting this money back each year since the HSA is considered not to have been established.

Can we send a letter to these individuals stating that if they do not open an account by a certain date, they will not be eligible for the HDHP plan and they will have to choose another medical plan? Is there any IRS (or other) regulation that states we cannot do this?

Plan has semi-annual entry dates (1/1 and 7/1), and a 1 year of service (1000 hrs) requirement. Entry date is following or coincident with satifying the requirements.

If a person was hired on January 2, 2009 and worked more than 1000 hrs in 2009, when would she enter the plan?

I would contend that the one year of service is satisfied on Jan 1, which is coincident with an entry date. Is that correct?

I got an ad for Viagra (of Cialis, or some other crap) today via PM. I did not notice a "report" button. Is there one? Can there be?

I did try to "block" any future PM's from this "person," but the account was no longer active.

Below is a link to the page that contains the syllabus for the EA-1 (in another link within the page).

I am basically starting from scratch here, so I was hoping an Enrolled Actuary can take a look at the texts and recommend an order of reading.

Please help- time is of the essnece as I wish to take the exam in May. Thank You.

http://www.asppa.org/Document-Vault/Docs/EE/EA-Exams.aspx

We have an ERISA 403(b) plan (had employer contributions) that is in the process of terminating. We hope to have it completed by mid-2010. The sole vendor is co-operating with us to get this terminated. There have been no employee or employer contributions for several years. There are around 130 participants. According to Field Assistance Bulletin 2009-02 transitional relief - none of the contracts need to be counted because they meet the requirements below. They are also not counted in the 5500 count. So am I preparing a 5500 with 0 participants and 0 assets?

Any and all thoughts would be appreciated.

"Specifically, the administrator of a 403(b) plan does not need to treat annuity contracts and custodial accounts as part of the employer’s Title I plan or as plan assets for purposes of ERISA’s annual reporting requirements provided that:

the contract or account was issued to a current or former employee before January 1, 2009;

the employer ceased to have any obligation to make contributions (including employee salary reduction contributions), and in fact ceased making contributions to the contract or account before January 1, 2009;

all of the rights and benefits under the contract or account are legally enforceable against the insurer or custodian by the individual owner of the contract or account without any involvement by the employer;(5) and

the individual owner of the contract is fully vested in the contract or account.

Moreover, current or former employees with only contracts or accounts that are excludable from the plan’s Form 5500 or Form 5500-SF under the above transition relief do not need to be counted as participants covered under the plan for Form 5500 annual reporting purposes. "