The DOL investigation revealed a prohibited transaction. Client will file 5330 and pay excise tax. Query: do we have to file a corrected 5500 to properly report the non-exempt p-i-i transaction?

Hello there. Would appreciate some input into my topic posted. OK for a 4k safe harbor to allow in-service from basic and/or enhanced match and also in-service from 3% non-elective? Document seems to allow but has some caveat language that makes me think it may not be permitted. Thanks. DN

Before PPA if the employer's taxable year did not coincide with the plan year, the deductible limit would be one of the following:

(1) The deductible limit determined for the plan year commencing within the taxable year, or

(2) The deductible limit determined for the plan year ending within the taxable year, or

(3) A weighted average of alternatives (1) and (2).

Once chosen, the method cannot be changed without the Commissioner’s approval.

1. It appears that PPA changed so that only the 2nd method is allowed. Correct?

2. Does the client need the Commissioner’s approval if he used 1st method in the past and now is forced to use 2nd method?

3. Can client continue to use 1st method?

If I have restricted stock that vests on a Saturday, do I value the stock as of the close of business on Friday? Monday? Do I average the two (like with gift tax)?

Any direction or authority would be much appreciated.

Does anyone have any good sources of info on developing and administering the new bicycle commuting benefits? I would like to discuss implementing this with my employer, but I'm feeling a little lost about how exactly it is supposed to work. A lot of the webpages I can find discuss a $20/month limit, yet it seems as though the code specifies it as an annual limit, which makes more sense since it seems like most people won't have expenses every month.

Taking over a plan with the following fixed contribution formula:

8.75% of pay up to the wage base

+

5.7% of pay above the wage base

My foggy recollection of integration was X% on all + 5.7% on excess and x had to be >,= to 5.7%, which it is here.

So I am thinking that this is not stricly under the permitted disparity method and would require general testing. Does that seem correct?

Thanks

I have a client who has provided me with a document which states that match is made on a payroll-by-payroll basis for all eligible participants. It goes on to say that a matching "true-up" contribution will be made to participants who are actively employed on the last day of the year. The are claiming that they need coverage testing for the true-up match. (This is what was provided by their prior service provicer.) My opinion is that coverage is automatically satisfied as all eligible employees are eligible to participate in the plan and, if they make deferrals, then they will receive a match contribution. Therefore, the coverage ratio is 100% for the 401(m) portion of the plan.

I would take the postion that the issue is a BRF issue, but I am not 100% sure. My problem is that I am unsure how this should be tested. On the surface, I would think that there is a discrepency in the rate of match. However, if the plan sponsor matches accruately throughout the year, then, I would think that no testing is required as everyone was entitled to the same level of match. Do I simply say that there are two groups of people: the first consisting of those who are actively employed on the last day of the year and the second consisting of everyone else? Do I then calculate the nondiscriminatory availability? Or do I review and see of those not active on the last day, who received the correct matching contribution and include them in the first group as they received the "correct" matching contirbution? Or is there something else I should be doing?

As always, comments are greatly appreciated.

I have a client who has received the following link by e-mail.

http://www.pbpexecutivereports.com/er.asp?...mp;id=958799471

I have been asked by my boss to check into the validity of this. I personally think this is just one of those scams that come about in bad economic times. Does anyone know if there are actually new rules or regulations coming out, or is this just a bunch of b.s.?

We have a client with a 401(k) Profit Sharing Plan that would like to exclude an HCE from plan participation by name. The employee in question was hired 10/01/2008 and would be entering the plan on 1/01/2010. When did / does the amendment have to be executed by in order to accomplish this? Should it have been executed by 10/01/2008 or can we do it currently since he hasn't entered the plan yet?

Any input would be greatly appreciated.

Thanks!!

We have solicited a few RFP's for a dependent eligiblity audit and have come down to 2 finalists.

Has anyone had any experience with Chapman Kelly, a firm that provides this service as well as medical claims audits?

Were you satisfied with their service?

Were there any issues?

Would you use them again?

Does anyone use Oracle, and if so , how are you tracking verification of dependent eligibility in Oracle?

Lexy

DB plan is terminating and all benefits are being paid out in June. Elderly owner/participant who has been taking required minimum distributions from the plan has elected to directly roll over her lump sum payout to an IRA. If I remember correctly, the 2009 RMD exemption applies to both DC plans and IRAs; does this mean that she is not required to take an RMD this year even though the benefit was in a DB plan for part of the year? All help is greatly appreciated.

We are a regional TPA who work with numerous financial institutions. Recently, one of the banks we work with interpreted the rule to mean that we must have a policy in place. Also, after reviewing the rule, it looks like the plan sponsors who have loan provisions might also be required to impliment a policy.

Have any of you dealt with this? If so, what is your interpretation?

Thanks

Dune

.

I have an owner that hired employees in October 2008. They are not eligible for the plan until 1/1/2010.

Can I still do a 5500-EZ (owners only) until they become eligible in 2010?

Thanks

Client amended for GUST using a Corbel volume submitter document (not prototype style), but missed the mandatory rollover amendment (IRC Section 401(a)(31)(B)). We want to correct for the missing interim amendment through VCP.

Under EPCRS, Section 6.05, it appears to me that submitting for a favorable determination letter as part of our VCP application is mandatory since we are in the midst of the EGTRRA amendment cycle for a VS plan (and since the IRS issued a sample amendment--but not a model amendment--for this change). I welcome comments about this conclusion, but that's not my real question.

This plan has never received a favorable letter--at least not that we can tell--and documents are available only back to an un-dated pre-GUST restatement (retro to 1/1/97).

Does anyone know how far back the IRS will require us to provide documents in order to issue an FDL for the plan?

If a deadline falls on a weekend or holiday, the general deadlines for IRS and DOL forms, filings and notices are extended to the next business day. Usually this rule is spelled out on the applicable form. What if we're dealing with a notice to participants not a form? Is there a general rule extending the deadline in these circumstances? Thanks for any thoughts.

Corbel gives me the option to put Lettinga & Associates in the footnote of every page of the adoption agreement. I have never done this, but I am wondering. Are there advantages to doing this?

What are all of you doing?

I want to terminate a HRA plan. There are no outstanding reimbursements to be paid. Any other steps besides notices that must be done?

A client wants to amend their 501©9 exempt VEBA to provide health insurance premium payment/reimbursement. This was a physician practice, two covered persons - the Dr (+spouse) and his office manager (+spouse). (I'm not convinced that these were the only eligible participants, but that's what they tell me.)

When set up in 1986, the VEBA was actuarially certified and is fully funded. Office Manager is the trustee. The plan was written to provide LTD & STD, and severance for current employees only. No claims have ever been made. All contributions were apparently made by the employer. All 990s & 5500s have been filed.

The employer sold most of its assets and dissolved in 1995. So I don't think there are any employees anymore, and therefore no plan participants. Also, both former employees are now retired. There's one clause in the trust giving the trustee the power to pay "future claims of Plan Participants until no monies or other assets remain in the Trust" in the case of termination by the employer.

It seems like the plan needs to be amended in two ways: to provide health insurance benefits in addition to LTD & STD, and to provide these benefits to the retirees. The severance benefit does not seem applicable anymore.

Here's what I can't figure out:

What happens when we re-characterize contributions made under the original plan (severance & LTD, STD for employees only) as benefits for retirees? It seems like this will violate the reserve limitations for post-retirement benefits and create UBIT for the last 23 years.

Is this right? If not, what am I missing? Could anybody suggest guidance? I can't find any, maybe I am reading the wrong regs.

Is anyone else being deluged with Medicare Secondary Payer claims, referrals to Treasury, offsets, etc.? Has anyone succeeded in getting anyone at CMS, Treasury, or the CMS contractor (MSPRC) to return calls, listen, explain, acknowledge that there are problems?