Client's compensation is $200,000 per year

Contributes $100,000 to DB plan.

How much can she add to SEP IRA?

Thanks

Also posted in Defined Benefit forum

Client's compensation is $200,000 per year

Contributes $100,000 to DB plan.

How much can she add to SEP IRA?

Thanks

I have not received an acknowledgement in response to the last 2 reasonable cause letters sent to the IRS. The next thing the client / taxfiler received was a penalty notice. Anyone having similar experiences or know a possible reason that I am not getting responses to my RC letters?

This CB plan was effective 1/1/2004 so the 3-year cliff vesting requirement must be effective for plan years commencing 1/1/2008 and forward. Does this apply to only accruals from 1/1/2008 going forward? And the accrued benefit through 12/31/2007 remains on the old schedule? For example, an employee is hired 1/1/2005. The plan originally had a 6 year graded schedule. At 1/1/2009 would he be 60% vested (2005, 2006, 2007, and 2008)? Or would he be 100% vested in the entire benefit because he now has 4 years of vesting service? Or is he 60% vested in his benefit through 12/31/2008 and 0% vested for the benefit he accrued during 2008?

Does anyone know where I might find a checklist showing effective dates for changes in qualification requirements for a DC plan since 1985?

Is a church with a 403(b)(7) plan exempt from the IRS's written plan requirement?

I've been reading through several posts dealing with this subject and keep confusing myself.

I have a new ASG that popped up in 2009. A doctor (who has a safe harbor 401(k) plan where he is the sole HCE and 4 NHCEs) purchased a 20% interest in an outpatient surgery center during the year. The surgery center has a standard 401(k) plan with 20 NHCEs and no HCEs. They do not match, but make discretionary profit-sharing contributions of between 3% and 4% of comp. each year.

The surgery center's plan would satisfy coverage on its own automatically since it has no HCEs.

The doctor's plan, though, is only covering 4 of the 24 combined NHCEs for a 16.67% ratio.

Therefore, I would need to aggregate the plans for coverage and nondiscrimination testing, meaning my safe harbor is blown because I can't aggregate safe harbor and non-safe harbor 401(k) plans. Does this mean I need to encourage the surgery center to adopt a safe harbor 401(k) plan or simply run a combined ADP test for the two entities or have I missed something???

Thanks.

James

J&S liability is determined as of the date of withdrawal. What happens if member of controlled group liquidates and distributes assets to shareholders before plan demands payment? Is there a constructive trust imposed on liquidation proceeds?

I know that a QACA/EACA cannot be added to an exitsing 401(k) during the plan year. My question is can an "unwind" feature be added to an existing QACA/EACA during the year?

Any thoughts are greatly appreciated.

Individuals could complete an HRA in 2009 for a "rewards" (either cash or deposit to an FSA) to be paid (or deposited) in 2010. Is this still allowable under GINA? The information, which includes genetic information, was collected in 2009, it just will be paid out in 2010?

A plan that is exempt from ADP testing incorrectly issued ADP refunds for the 2007 and 2008 plan years.

They are contacting the HCE's and asking them to return the funds to the plan as after-tax monies.

One of the HCE's took a distribution and rolled his funds over.

Any idea what the plan sponsor should do in this situation? I can't imagine the refunds should come back to the plan as after tax and then distributed.

Thoughts?

I have been contacted by an advisor representing a bank that wants to offer closely held stock as an investment option in its 401(k) plan. I haven't seen this in awhile. In fact, I have only had three plans with company stock, it was publically traded, and they got it out of the plan in light of current fiduciary conditions. I have never had a plan with privately held stock. According to the advisor, the bank would like to:

· Develop plan “Policies and Procedures”

· Have plan provisions could include % limits of stock allowed per account, i.e. 10% or 20%

· Limit purchases to purchasing stock through annual deferral elections and matching contribution elections

· Establish bank’s “right of first refusal” for purchasing participants shares who are selling

· Second “right of purchase” could go to existing shareholders

· Provide liquidity for plan participants guaranteed by bank “Re-purchase liability account” established outside the plan

· Restrict rollovers to IRA’s to maintain shareholder voting control

· Find custodian who will serve as trustee/fiduciary

· Establish stock valuation procedures

The assets in the plan are currently about $3,000,000 and daily valued.

1) Generally, does this make sense in todays fiduciary environment?

2) Do any of the bank's goals present fiduciary issues?

3) Would the bank be required to have a fidelity bond equal to the value of the bank stock assets or have an audit (there are under 100 participants).

4) As an investment option in a 401(k) plan, must the stock be registered?

5) Am I missing anything?

6) Any suggestions on resources for me to research this futher?

Thanks.

From a summary prepared by American Benefits Council

http://www.americanbenefitscouncil.org/doc...mmary101509.pdf

The final regulations provide some additional transition relief which could affect funding for the 2008 plan year (for example, contributions made for the 2008 plan year can be taken into account at full value without a present value discount, provided they were made by the deadline for contributions (September 15 for calendar year plans).

Do you think it's a typo and should read "contributions made for the 2007 plan year"?

Two revised notices have been released. How aer folks going to handle which notice should be sent out? Are they going to send both. REview on an individual basis? Combine for their own notice? Just wondering...

Hello,

10 HCE - 2 of them are receiving zero

20 NHCE - all of them are receiving 5%

Can I divide into two component plans as following?

Plan 1: 2 (zero allocation) out of 10 HCE, and 19 NHCE

Plan 2: 8 of 10 HCE, and 1 NHCE with the EBAR that's higher than any HCE

Does each component Plan have to have at least one HCE and one NHCE?

Thanks.

Are SEP-IRAs covered under ERISA?

With all due apologies (haven't seen the sun for days),

Q & A from 6.02 am to 6.02 pm on 10^23

Q: What did Avogadro invent for his wife to use as a night cream?

A: Oil of Molay

Q: What did Avogadro teach his students in math class?

A: Moletiplication

or these:

http://www.moleday.org/htdocs/mole_jokes.html

I have a situation where a state governmental entity would arguably control a tax-exempt (501©(3)) entity under the new controlled group rules. 1.414©-5. The tax-exempt entity, in turn, owns one or more physician practice groups. It seems pretty clear that I have a controlled group as between the tax-exempt and the physician practice group(s). But is the governmental entity also aggregated? I note that the preamble to the final regulations states that these controlled group rules "do not apply to a state or local government or a federal government entity." It seems clear that these rules do not apply to aggregate two or more related governmental entities. But would this also apply in my situation to "break the chain" between the governmental entity and the tax exempt entity? Any thoughts or insights would be appreciated.

The plan's compensation definition = 415 Compensation. An employee receives "settlement" compensation 4 months following their severence from employment and the employer runs this through payroll. The "settlement" compensation represents claims for back-pay, front-pay, and benefits. Would this be considered plan compensation?

I am reviewing a potential customer's calculation and they have the basic SH match/100% first 3%/50% next 2%. If someone contributed 4%, they obviously should have a match of 3.5%. However, they are rounding the deferral percentages to whole percentages. To me, if someone contributed 3.3%, they should get a match of 3.15%, but they are only giving 3% as a match. How many decimal places do you go out? I have never run into this before.