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?

What are the tax consequences for a beneficiary (non-spousal) of a ROTH 401(k) account? Can they roll that over into a ROTH IRA and not pay taxes? Can they take a lump sum distribution and not pay taxes either? Is there any circumstance where a non-spouse beneficiary of a ROTH 401K account would have to pay taxes?

Thanks in advance!

Is the max for the entire family? Or could an employee and their spouse (different employer) both elect $5,000 with their own employer. I am thinking it is $5,000 for the entire family (not $10,000).

I deal with a handful of Pennsylvania Governmental Money Purchase Plans.

They are all straight forward plans in that the same contribution % is given to all ee's.

I have come across a new plan whereby the governmental agency as a whole opts out of social security.

However, they are looking into the option of allowing the employees to opt in but then those employees would not receive the same contribution as those that opted out.

Does anyone see a concern in the plan docment classifying the ee's in one of these categories, with those opting in to social security receiving a contribution much less than the other group.

The groups would be:

Class A = Opt IN

Class B = Opt Out

Comments are greatly appreciated.

A DB plan with an NRD=65 has a participant who terminated employment prior to age 65 and is now making application for benefits at age 70. The plan contains retroactive annuity start date language. The NRB is $350 and the lump sum benefit is $64,000. The accumulated life only payments with interest is $28,000. The Plan's AFTAP is 70% so lump sum benefits are restricted to 50%.

Case I.

Participant elects life only benefit, so first payment includes accumulated back payments of $28,000. Whether or not you believe this is a lump sum payment, it is less than 1/2 of $64,000.

Case II.

Participant elects to bifurcase benefit and receive lump sum of $32,000 plus monthly pension of $175. His initial payment is $32,000 (1/2 of $64,000) + $14,000 (1/2 of $28,000) = $46,000. I say no problem since although accumulated back payments are distributed in a lump sum, they do not constitute a lump sum payment (i.e., can't be rolled over).

Any naysayers who wish to argue that accumulated back payments are included with the lump sum when determining the restricted benefit?

Here is my last question for today...lol

I was looking at some of our take over valuations from other actuaries and saw calculations done two different ways...

Let's say you have a calendar year DB ....Valuation date 1/1/08. Using 5.31, 5.92 and 6.43 segment rates. Participant had a NRA of 65 and is currently 45 years old as of the valuation date. When calculating his TNC and Funding Target, you take the present value of the aforementioned benefits as of the valuation date. When discounting back to current age (e.g present value) would you discount back using 5.31 for the first 5 years, then 5.92 for the next 15 or just use 5.92 for the entire period since he is 20 years from retirement and no benefits are assumed to be paid before retirement?

I say you use just 5.92 ..what do you say???