If my plan changes 401k custodians and administrators (mid-year) and I do a restatement with a new prototype agreement, do i need to change my plan sequence number if the name of the plan is changed?

Additionally, does the previous administrator file form 5500 while the plan was with him and then the new tpa files a 5500 in the same year while he administered the plan or does the new tpa get the required info from the previous tpa to file the 5500 for the full year?

A DB plan provides a normal retirement benefit at age 65 of 70% of average compensation up to maximum covered compensation and 22.75% of average compensation in excess of maximum covered compensation for participants with 35 years of service. Thus, it provides integration in accordance with the simplified Table IV under IRC 1.401(l)-3(e). I.e., the maximum permitted dispairity is .65%.

Now, suppose the benefit commences at age 70. Then, the plan says to actuarially increase the age 65 benefit. Suppose the actuarial increase factor is 1.7. Then, we have 1.7 x .65 = 1.105. But, the maximum permitted dispairity at age 70 under Table IV is 1.048. In short, even though the Plan says actuarially increase it appears that Table IV would limit.

Any comments?

The instructions are not very clear on this.

I seem to recall that it does not have to be filed/attached if total fees paid to all service providers is less than $5,000

Help!

Another very confusing area. The participant was covered by a life insurance contract held in the plan. Upon his death, his spouse received life insurance benefits, which are clearly non-taxable and therefore cannot be rolled over. All PS-58s were reported.

1. Is it true that the difference between the cash surrender value and any basis is taxable, and therefore is rollover eligible? Or I am completely confused?

2. The balance of the account (non-insurance portion) would be rolloer eligible, correct?

2. If both (1) and (2) are rolled over, there would be no 20% withholding, correct?

3. Are there cites for this? I am coming up empty.

Many thanks.

I have an end of year valuation for a 12/31/2008 DB plan with the following data:

Target Liability: 253,789

AVA: 150,354

Pre-Contributions: 43,736

Interest on Pre-Contributions: 721

Carryover balance @ EOY: 74,043

With this data, the 2009 AFTAP will be certified at 47.59%. However, a deemed burn of $42,538 will bring the AFTAP to 60%.

I have two questions:

1. How does the deemed burn affect the 2008 valuation?, and

2. Is the deemed burn reported on the 2008 SB or the 2009?

Joseph Carolan

A client is terminating their 401(k) plan (two principals and three employees). We want to distribute all assets and finalize it prior to December 31, 2009. One participant is going through a disolution. Her husband is being completely uncooperative. He's uncommunicative, doesn't pay his attorney, etc. My thought is to issue the necessary paperwork for her make an election, however since the husband won't sign off, there will be an involuntary rollover to an IRA. Any other options?

We've come across a plan that has age 21 and 1 YOS with semi-annual entry dates, but it waived the age and service requirements in the first year by using language that says those employed on or before 3-1-2008 were exempt from the age and service requirements. The company started its business in February 2008.

The only two people that were employed by March 1st were the owner-HCEs. A few staff employees were hired July 2008 (after July 1).

Doesn't 410(b)(2)(D) require that the lowest age and service requirement be considered for determining coverage, and doesn't such a waiver constitute no age and service for 2008? Or is the waiver of requirements just considered as part of the plan's conditions of participation which would fit in 410(b)(4)(A)? - I would not think so. Or does the semi-annual entry date solve this issue somehow?

Hopefully they have posted it online.

Safe Harbor Question; they say one stands as deemed to have met ACP or ADP test does not meet that one would actually pass it, right? If one calculated it out, the plan would not pass the ACP or ADP test, but following the safe harbor provisions gets one a reprieve?

Is my employer required to send me a notice each year that tells me how much I am vested in my defined contribution plan benefit?

If so:

1. When is that notice required to be sent?

2. What is that notice called?

3. Is there any guidance on what that notice must provide?

4. Lastly, is it okay for my employer to send me a "generic" notice that just describes the general vesting provisions of our plan? Or are they required to send a notice customized to my particular situation?

Thank you.

After the 9/15 contribution deadline calculations, and after the 9/30 AFTAP deadline work, and after the 10/15 Form 5500 deadlines, what should I do next?

According to Rev. Proc. 2007-44 at section 18.01, it appears that volume submitters are required to be submitted by January 31, 2011. However, I have been hearing that the real deadline is April 30, 2010 according to more recent guidance. Could someone confirm that the date in 2007-44 was in fact move forward or that I am perhaps misreading that section? Again, this stuff is clear as mud! Many thanks!!!

Person was an active participant under a 401(k) Plan until employment terminated in September. Plan terms require that person can't be paid until after closure of the plan year; meaning, termination distribution can't be paid now. Person just learned that beneficiary diagnosed with terminal illness; meaning, medical bills (and other issues). Plan does allow for Hardships. Can this person get a Hardship Distribution even though no longer employed? Is this question impacted by new standards that allow a beneficiary to obtain a Hardship?

I was laid off from my former employer in July of 2009, they terminated the 401k plan April 30 2009 (their fiscal year ends also on April 30). My questions is: Because the 401k plan ended on April 30 2009, do they have to payout my 401k monies or do I have to wait until next years fiscal year end because I was laid off in July?

I Have a prospect that works for a company that he does not own in any way and he defers $9,000 / year into the 401K plan there.

He also has a business that he owns entirely ( no employees ) that has SEP plan.

Can he contribute the $46,000 limit for 2008 to the SEP plan considering he puts the $9,000 into the 401K plan ?

THanks

Can a defined benefit plan stop a current employee's benefit accruals when the employee goes into pay status at normal retirement age and continues to work, if the pay status is elected by the employee? Does the ADEA allow this because stopping the accruals is not "because of age" but because the employee elected to start benefits?

Like a lot of folks, I am thinking about converting a traditional IRA to a Roth IRA in 2010. Given my age, my wife's age and children's ages - I am assuming that first, my wife will inherit the Roth IRA, and second she will pass it down to our children. Given my personal situation I am using this Roth IRA as my major legacy to the children. Now my kids will likely be in their 30s or 40s when this happens. So my questions are:

Can my children upon the inheritance of a Roth IRA elect to take all of the money at once, or do they get to spread over their life expectancies, or is there some other method?

Do they need to pay income tax on the distributions (like a 10% penalty) if they are under age 59.5 (given the methods of distribution noted above)?

Is leaving a Roth IRA more advantaged for them than a traditional IRA - in terms of when they can begin to get distributions? (I understand the tax advantages.)

An employer is required to make a top heavy contribution for 2008, but the economy has hit this business very hard. They've downsized to only a handful of people and are barely making ends meet. The owner no longer takes a paycheck. There's no way the employer can make the TH contribution. They are probably going to terminate the plan, but that won't help for 2008. Are there any options?

Hi, quick question:

Is it possible for a physician group to have both an HSA and MERP? Or, is it only permitable as an either/or situation?

If possible, are there any restrictions or special regulations that govern?

Thank you in advance!

Calendar year plan, revised safe harbor notice:

2. Contributions for the Plan Year Beginning January 1, 2009.

b. Safe Harbor Matching Contribution effective for the Period January 1, 2009 through May 23, 2009. The Employer will make a Safe Harbor Matching Contribution equal to 100% of the amount of your 401(k) contributions that do not exceed 6% of your compensation. Compensation generally includes all taxable compensation paid to you during the Plan Year (or from the time you enter the Plan), plus your 401(k) and cafeteria plan contributions. If you terminate employment during the Plan Year, you will be eligible to receive the Safe Harbor Matching Contribution if you have made 401(k) contributions during the Plan Year. You are not required to be employed on the last day of the Plan Year to receive the Safe Harbor Matching Contribution.

c. Safe Harbor Matching Contribution effective for the Period May 24, 2009 through December 31, 2009. The Employer will make a Safe Harbor Matching Contribution equal to (a) 100% of the amount of your Elective Deferral Contributions that do not exceed 3% of your compensation and (b) 50% of your Elective Deferral Contributions that exceed 3% of your compensation but that do not exceed 5% of your compensation. In other words, if your Elective Deferral Contribution equals or exceeds 5% of your compensation you will receive a Safe Harbor Matching Contribution equal to 4% of your compensation. If your Elective Deferral Contribution is equal to 3% or less of your compensation then you will receive a Safe Harbor Matching Contribution equal to the amount of your Elective Deferral Contributions. Compensation generally includes all taxable compensation paid to you during the Plan Year or from the time you enter the Plan, plus your Elective Deferral Contributions and cafeteria plan contributions (if any). If you terminate employment during the Plan Year, you will be eligible to receive the Safe Harbor Matching Contribution if you have made Elective Deferral Contributions during the Plan Year. There is neither an hours of service requirement nor a last day of the Plan Year employment requirement fr you to receive the Safe Harbor

Matching Contribution.

Is there any new guidance from the IRS on this? Does their attorney know something I don't know?