Why would a church choose the 403b7 over 403b9? I know the "9" plan is for church only, but does it have any other benefits to its plan besides that? I can't seem to find anything?

The plan is new and it is an EOY plan for 12/31/08. The effective date is 1/1/08. For the 2008 premium filing – they would not have accrued a benefit as of 1/1/08 or be vested as of 1/1/08. Would there be a premium due for 1/1/08? Do I still have to pay the participant count as of 1/1/08 even though they don’t accrue a benefit until they worked 1000 hours in 2008 (around June 2008).

What is the definition for a participant in the participant count for PBGC premium?

Is it correct that mandatory e file is for plans beginning 1/1/09 or after. Thus for calendar year plans the first mandatory round of physical e file actually occurs in 2010.

I've been receiving seminar materials from companies offering CPE stating that 2008 filings are the first mandatory E FILE year e.g. for those filings that we are submitting right now in 2009. I understand we need to start gearing up now but I thought the requirement didn't actually come into play until 2010 (for a calendar plan).

Any helpful clarification would be appreciate, thank you!

Does anyone know how options are valued for reporting purposes (1099-R) when distributed from an IRA? For example, if an IRA holding options is converted to a Roth. Any citations or guidance to refer to?

If none of the NHC employees defer does that mean that none of the HC employees can defer? Are they up the creak? 2 x 0% is 0%

Background... Small plan of just HCE participants (no other employees at all). Times are tight.. may only make deferral contribution for 2009. One new employee (bookkeeper) who will be eligible. What is she doesnt defer?

Suggested options? Doing 2009 planning.

Calendar year plan has a funding deficiency in 2007, corrected in December 2008.

How is the funding shortall calculated as of 1/1/2008, by including the amount due for 2007 or not?

Similar questions about how to calculate the quarterly for 2008 and 2009 - based on target nc + amort for 2008 including deficient receivable?

The proposed reg seems to say that the deficiency is not part of the quarterly computation for the next year, but the question remains as to how the unpaid amount is handled for purposes of the determination of shortfall.

Opinions please. Thanks.

A DB plan is not subject to the 436 restrictions but is restricted from distributing lump sums to HCEs. We have the following for a participant who was age 60 in 2006:

Compensation 2006: 200,000

2007: 165,000

2008: 90,000

Employee terminates 1/1/2009. Employee is NHCE in 2009 so may have benefit distributed in a lump sum. However, if employee defers election (to say 2010) and 401(a)(4) HCE restrictions still apply, employee becomes Former HCE in 2010 and therefore cannot have benefit distributed in a lump sum.

Any disagreement?

In March of 2008, I contributed $4000 to a Roth IRA for tax year 2007.

I later realized that about $3000 was an excess contribution due to AGI within the phase out range.

I did not contribute for 2008 as AGI was too high.

Suddenly it is 2009, and I am filing taxes for 2008.

My custodian is often incompetent, so I am asking here.

What is my best course of action to correct the excess contribution?

Can I recharacterize the 2007 contribution made in March 2008 as $1000 eligible 2007 contribution,

plus a $3000 ineligible 2008 contribution, and withdraw the $3000 before filing 2008 taxes on April 15th, 2009?

Do I need to file Form 5329?

FWIW I am not yet 59 1/2, and the value of the IRA has declined steadily since 2007.

Thanks for your kind help!

A secondary qualifying event can result in an extension of the coverage period. Does a secondary event have any effect on coverage itself? For example, a terminated employee elects COBRA coverage for his spouse and dependents. During the COBRA coverage period one of the dependents ceases to be a full time student or becomes ineligible under the plan's provisions due to age. Does that dependent's coverage continue or does that dependent have to elect new COBRA coverage? It seems that once a qualified beneficiary has elected COBRA coverage a secondary event should not negate that election.

Small business exemption from having a fidelity bond for the retirement plan?

Small business exemption from having a fidelity bond for the retirement plan?

I know that a sole proprietorship or a p.c. with only one employee does not need a fidelity bond, but what other exceptions occur?

SEP Plans; when can you only have a SEP plan and no other plan simultaneously?

As I understand it, under certain circumstances, one can have a SEP plan, and no other plan simultaneously. What type of SEP plan does this rule apply to?

Does anyone know of a comparable statement from another provider?

tx

bill

If a 401(k) 3% Safe Harbor plan is terminating due to sale of company, does the 3% contribution just have to made through 4/30? I know there's a potential government relief of a Safe Harbor contribution but I thought that only applies to a plan terminating for reasons other than company sale. Appreicate someone making time to confirm with my situation the 3% will only have to be made through 4/30. Thank you.

If an HCE is subject to the restricted benefits provisions under Reg. Sec. 1.401(a)(4)-5(b), and then gets divorced, is the alternate payee under a QDRO also subject to the restrictions? Or can the AP get a lump sum payment, if permitted under the plan? The regs seem to say that the restrictions only apply to the HCE.

Would appreciate thoughts or help on this. Company wants to put in a phantom stock plan for a couple of key employees without impacting actual ownership of closely held company. The plan is really intended to function / payout as a change in control bonus plan--i.e., participants receive cash or other consideration paid by Buyer if and only if there is a CIC as defined in Section 409A. (It is possible that some payout may be made upon a death or a 409A disability but likely that separation from service for those reasons will only simply result in delayed payment upon CIC within a certain period.) Accordingly, I think the plan should basically comply with 409A as it likely will pay out if and only if the participant remains employed through a 409A change in control of the company.

Does anyone see obstacles or problems with that general approach?

If not, my main question is whether there is any way to safely try and accomodate the possibility of an earn-out as part of the consideration. It may be that the company will decide to simply make this a straight cash plan even if there is a mix of consideration paid to actual shareholders. Still, I wonder if it would be possible to structure a phantom stock arrangement like this to track an earn-out, etc. provided it complied with general rules applicable to options or SARs, etc. The phantom nature of this arrangement though makes me hesitant to think the earn-out exceptions provided for real stock rights would apply here.

In their March 31 missive, the IRS indicated that for 2009 can switch character and timing of interest rates. All discussions have been in respect of improving AFTAPS. Any issues if the Plan Administrator elects the interest rate character and timing the produces the worst result.

For example, if the AFTAP would be at 63%, it might be possible to reevaluate and determine an AFTAP of less than 60%. So, rather than restricting lump sums to 50%, lump sums could not be distributed, except for deminimis amounts.

The particular client would just as soon not sell off depreciated investments.

employee has 2 different employers-each with a simple ira. He has contributed $10,500 to one and $5,000 to the other (2008 limits) per his total allowed for aggregate accounts. The question is: can he do $2,500 catch up in EACH acccount for a total of $5,000 catchup? (yes, he's over 50). I have looked at pub 560 and rule 402g and it does not clarify that you can NOR does it say you can't. It never says per or total on the $2,500 catchup allowed.

We have a client that failed their ADP test in 2006 but the prior vendor never corrected the problem. The SCP allows us to fix the problem but the issue becomes the calcuation of gains/losses. Rev Proc 2006-27 (Haven't read 2008-50 but I assume it is similar) appears to allow for actual gains and or losses to be used for the refund as well as the One to One Correction Method for the contribuiton to NHCEs. The prior vendor is claiming Gap period methodology must be used for the period after 12/31/2006 based on 2006 earnings. It makes a huge difference since the funds lost significantly since 12/31/2006. Any ideas as to solution?

As I understand it, the general rule is that a plan administrator must provide a Notice of Early Termination of COBRA coverage "as soon as practicable" after a decision to terminate has been made. Seems in cases where that termination is known prior to coverage terminating (e.g., where the employer decides to terminate all group health plans and thus will terminate COBRA as of some set future date), then the Notice may (must?) be sent even in advance of the termination.

What about the timing where termination is a result of the participant's failure to make timely COBRA premium payments. In particular, if a plan gives folks basically 40 days after the payment date to make a termination decision (30 day grace period plus a few extra days to see if mail postmarked as of deadline date comes in) and then takes a week or so to generate and send the Notice of Early Termination. Is that soon enough? Is anybody aware of cases or rulings where a period of time has been suggested? In this case, failure to send the notice out immediately or very shortly after the payment deadline was missed eats into the participants 63-day period for lining up alternative coverage without adverse consequences.

Can the lump sum option be removed from a DB plan? I have one participant that has reached NRA has not not yet made a distribution election. Would I have to preserve the option for this one participant and be able to remove the option prospectively?