What happens to a Cafeteria Plan if a company dissolves mid year? What if the company merges operations with another company? Where can I find some rules and regs on this sort of occurance?

Thanks

Someone settle a "dispute" over Sch. D. We have a client that has their investments with BenefitStreet (now NextStep), and I have been trying to get an acurate balance by fund list so that I can process a schedule D. A co-worker is arguing with me that no D is needed. When i called to ask if NextStep files as a DFE, the girl didn't know what I was talking about.....she said they don't sell insurance products....

Do you guys think I should be completing a Schedule D or not? i wish I could say that a steak dinner was riding on this, but I cannot.....Thanks for your help.

There is a 401k plan I am starting to work on. There is one set of investments that do not get valued until after the 5500 is due. The cpas therefore do not sign off on the financials until after 10/15.What is the best way then to file 5500?

Revenue Sharing has been deposited into the plan and then the plan fees were taken from it.

How to show on Schedule C and H?

Thanks

Pat

Does anybody have a reference to where I can find the most current LRMs for DC and 401(k)s? Also, any idea when they will be revised?

Thanks much!!!

Company part of a controlled group was sold. No longer a controlled group.

They are on a Prototype 401(k) Plan and want to keep the other company in the plan until the end of the year per the agreement of the sale.

Since it is now a Multiple Employer Plan as of last week, what needs to be done with the plan document?

Can I keep them on the prototype until the end of the year - and then they are off on their own to set up their own plan or do I have to do an Volume Submitter plan for the rest of this year because of the change?

How long do I have to make these changes? As always - we find out after the fact.

Ideas - thoughts???

Thanks

Pat

An employer recently submitted revisions to 2006 census data. Originally the ADP test passed; but with the census revisions, it fails. Therefore, we have excess contributions from the 2006 plan year that won't be corrected until 2009. In calculating the excise tax, is one Form 5330 sufficient (i.e. 2009) or is a Form 5330 needed for each year that the correction of the excess contribution is late (i.e. 2007, 2008, 2009)?

Thanks.

Purley hypothetical case:

say a taxpayer has a retirement plan for his business, and somehow some transient worker manage to attain eligibility to enter the plan and receive an allocation. However, this transient disappears from the area. The taxpayer does not know if he survives off the grid, frequents flophouses, transients hotels, soup kitchens, shelters, etc. After five years of breaks in service, this person's distributions comes due. How much effort must they put into locating this person? After this minimum required effort, what must they do?

Does the IRS offer letter forwarding services? For unclaimed distributions?

Would unclaimed distributions from a plan go to the Social Security office?

I have a client that has heard of someone getting a PLR OK'ing non-cash contributions to a DB Plan.

Any ideas on the characteristics of the asset(s) that would make the IRS rule favorably? (or other thoughts on the subject?)

Thanks

Medical Practice 1 had a 401(k) Plan (Plan 1). Company dissolved and plan is instance of terminating. Most doctors went to work for Medical Practice 2 (new unrelated company.) Practice 2 sets up own new 401(k) (Plan 2.) Dr. K had self-directed brokerage account in Plan 1 (SDA1.)

Practice 2 sent deferrals and PS contributions to SDA1 for about six months. Then Dr K established a new SDA for Plan 2 (SDA2) and all assets were rolled over from SDA1 to SDA2.

What issues should I be concerned about? Does this constitute a PT? How do you book these transactions in the Forms 5500 for Plan 1 & Plan 2?

Medical Practice 1 had a 401(k) Plan (Plan 1). Company dissolved and plan is instance of terminating. Most doctors went to work for Medical Practice 2 (new unrelated company.) Practice 2 sets up own new 401(k) (Plan 2.) Dr. K had self-directed brokerage account in Plan 1 (SDA1.)

Practice 2 sent deferrals and PS contributions to SDA1 for about six months. Then Dr K established a new SDA for Plan 2 (SDA2) and all assets were rolled over from SDA1 to SDA2.

What issues should I be concerned about? Does this constitute a PT? How do you book these transactions in the Forms 5500 for Plan 1 & Plan 2?

Does a POP (Premium Only Plan) need to file a 5500 if they have over 100 participants?

If a terminated participant is 40% vested but never takes a distribution and the plan decides to amend to 100% vesting....would this terminated participant automatically be bumped to 100%? Or could the plan still honor the 40% vested amount when the participant takes the distribution. I know a participant is essentially anyone with an account balance however I can see the plan sponsors side of this.

Hello,

I have never seen this question in this form before.

Participant wants to change his own account to a Trust. I suppose he has established a trust for all his assets and wants to change his SSN to the FID issued for the trust, and then use the name of the trust.

I know that a participant can designate a trust as his beneficiary, but changing the participant's account itself to a trust is not allowed, correct?

It seems to run afoul on two counts -

(1) the idea that he has deferred compensation and that he will owe ordinary income tax based on his individual tax situation for the year(s) of distribution. Changing to a trust would very possibly avoid or change that ordinary income tax treatment.

(2) It seems that it would be a prohibition under the Anti-Alientation clauses of 401(a) of IRC and 206(d) of ERISA, but want to make sure I am on the right track here as well. If the law allowed him to change his account to a trust, and he was the beneficiary, he could not be the sole trustee and that could potentially allow a change to a beneficiary without his authorization, thus alienating his account from him.

Thanks in advance for any feedback.

andmik

My understanding is that if a 403(b) plan is written to offer ' 'Unviersal Availability', as described in 403(b)(12)(A)(ii), that it is excluded from Title I and need not do annual non-discrimination testing.

If so, and there is no ACP testing, what prevents a school board from picking and choosing select employees to receiving a match or even an elective ER contribution?

BruceM

The IRS Q & A from the 2008 ASPPA annual conference included the following:

Question:

"A plan's audit revealed insufficient plan administrator documentation of the actual hardship distributions on file. The benefits manager disputes this responsibility, saying it is between the individual and the IRS. Are there any minimal requirements that plan administrators must conduct before allowing a hardship withdrawal?

"

Answer:

The plan must have sufficient information to adjudicate a claim. Reasonable evidence is needed. See, e.g., regulations relating to Katrina hardships for what you need to show.

I cannot find the regulations the IRS referred to. I read KETRA and IRS Notice 2005-92. Can anyone help?

Thanks!

Laura

Hi - I was wondering if it is allowable for a COBRA participant to change their elections mid-year. Our Health Plan rates are 2-tier...Single Coverage and Family Coverage (Family being more than one person). A COBRA participant currently has Family coverage (spouse and 1 child). They have applied for the State to insure the child, so he was wondering if he could change his election to just his wife and himself. First, is this allowed or does he have to wait til the annual Open Enrollment? Secondly, if allowed, would it still be family coverage or can they enroll separately under 2 single COBRA health plans to save money?

Thanks for any input!

If you want to cancel a 401k what are the procedures if any you would have to file with the DOL. Company doesn't provide a match and doesn't want to pay for it anymore. Can you abolish it in the middle of the year, or do you have to wait until the end of the year? Also, if the company wants to establish a SIMPLE instead, are there any time restraints they have to adhere by once they cancel the 401k?

Thanks in advance...

I subscribe to Sungard Corbel and use their plan document admin system.

I created a 401k safe harbor plan.

I chose the option where the client provides the "maybe" notice and the output provided a plan amendment that enables the client to reserve tje right to adopt a plan amendment no later than 30 days prior to the endo fo the plan year to provide the 3% nonelective formula.

However, the Corbel documents did not provide a sample plan amendment to actually adopt the safe harbor provision if they decide to do so late in the plan year.

Am I missing something. Doesn't the plan sponsor need to adopt an actual plan amendment later in year to apply the 3% safe harbor? Or is the supplemental notice sufficient?

Thanks.

I need help with the use of carryover balance for quarterly contributions.

My example is as follows:

Minimum contribution as of 1/1/2008 is $9,039 (also maximum contribution).

Carryover balance of $136,219 as of 1/1/2008.

Actuarial Value of Assets are $285,780 as of 1/1/2008.

Quarterly contributions are required for 2008 since there is a funding shortfall for 2007 (Curr Liability (1/1/07) - ((AV assets 1/1/07 - credit balance 1/1/07))) > $0. The AV assets was 241,088, CL 1/1/07 is 172,064 and credit balance is 116,030. Assets are greater than CL 1/1/2007 but due to the credit balance there is a funding shortfall, no exceptions???.

The client made a contribution of $9,058 on 12/26/2008 and $520 on 1/13/2009. Effective interest rate is 6.03%. We originally calculated the amount to deposit adjusted with interest ignoring the interest on late quarterly contributions.

The client can elect to reduce the carryover balance as of 1/1/2008 and apply towards the minimum contribution to reduce the cash required. Can the client elect to use $9,039 of the carryover balance as of 1/1/2008 to reduce the amount of the cash required to $0? If so, and using the above deposits are we all set for 2008? Isn't the amount of the interest on late quarterly contributions based on the minimum required contribution (prior to election by plan sponsor)? What am I missing?

Or can the carryover balance be used to satisfy each quarterly contribution? How does that work?