When calculating the excise tax on failure to transmit deferrals timely, if I understand it correctly, the excise tax is 15% for each taxable year that the correction is not made.

I'm not sure when the correction is deemed to be made. Is the correction made when the deferrals are deposited? The interest on late deferrals is deposited? The excise tax on the prohibited transaction is paid?

Can someone help?

Thanks!

Does any have any suggestions for ce credits, I guess I need to get the ball rolling to get enough credits for this year.

I know ASPPA is an approved sponsor, I'll most likely will use them. Just curious to see what everyone else is doing?

The IRS guidance says the notice regarding the election of prior year's funding status is to go to various parties, including "participants." The IRS does not define participant. If the election is to retain the prior year's "good" status (not endangered or critical) do all participants, active term vested and in pay status, receive the notice?

Is a payment contingent on a change in control subject to a substantial risk of forfeiture regardless of the change in control definition (knowing that there must be some risk)? In other words, if an agreement promises to pay an employee $x when there is a change in control, can we design the CIC defintion as we like or must it comply with the 409A CIC definition? We would like to use our own defintion and keep the payment a short-term deferral.

Can a plan utilize a discretionary match formula that matches more than 100% of deferrals and caps the match at X percent? Example match 125% of the first 2% deferred?

Does anyone know if the IRS has published anything stating affirmatively that the waiver for RMDs for 2009 does not apply to defined benefit plans? I’ve seen Notice 2009-9, which mentions applicability to individual account plans, but this is not something that the average participant will understand.

Further, there is a problem that many “experts” are telling participants that the waiver does apply to all plans. The experts include the usual financial advisors, but it also includes the people on the IRS phone lines (including people who are serving as specialists). On IRS.gov, there is a publication that says generically that the waiver applies to qualified retirement plans. I even called the IRS number myself and spoke to a “specialist” who swore that the waiver applied. Participants are refusing to take RMDs, and we need to find something in writing that says in a straightforward manner that pension payments must occur.

I wrote to RetirementPlanQuestions@irs.gov (mentioned in Notice 2009-9) yesterday, but I haven’t heard back yet.

Company has a maximum leave policy in place for employee's out on leave, whether it's medical or personal. If an employee choose not to return from leave, is that voluntary or involuntary for COBRA ARRA subsidy purposes? For example, female goes out on maternity leave & chooses to stay home after she has the baby, but does not actually resign. That appears to be voluntary.

However, what happens to the employee who has exhausted all available leaves, but is medically unable to return to work? Our company policy says they are separated from employment if they don't return once all leaves are exhausted, and we let them stay out for a very generous period past what is legally required before reaching this point. Also, who determines medically able at this point since the employee has been separated & we aren't really inthe position to request medical records anymore?

This is a blurry line and I wondered if anyone else has run into these types of situations & how you responded. We've already had one employee file an appeal, and while I don't want to get into a lawsuit over COBRA, I also dont' want to set a precedent that could cost us much more in the future.

Is there any reason you can see that successor liability would apply in the following situation?

Company has a frozen pension plan, 98% funded as of 12/31/08. Company is selling all assets in 1 of the many states in which it operates. Purchaser is accepting all employees, but is concerned about potential successor liability under the pension plan. The employees being transferred to the purchaser constitue less than 4% of the total workforce, and less than 2% of pension plan participants, so there is no partial plan termination. Transferred employees will be treated as any other separated employee under the seller's pension plan.

Is there any reason the purchaser should be concerned about liability under this plan? Any other issues that this coudl create?

I have a top-heavy 401k plan that is terminating its safe-harbor match for the rest of 2009 due to significant business decline.

Since the plan is top-heavy, what is the required top-heavy contribution for 2009 for the NHCEs if the HCEs have not made any 401k deferrals in 2009?

There are no other types of contributions to the plan.

An employer has an existing SH plan. The company will be hiring a new group of employees that will be in its own class, e.g., trainers. The company doesn't have any trainers now. The employer wants to exclude this classification of employees from the plan. Excluding the trainers won't cause the plan to fail coverage, but I'm wondering about the Safe Harbor aspect of the plan. I'm thinking that this group must get a Safe Harbor contribution once the age and service requirements are met, even though they might be excluded from getting any additional discretionary contribution. Am I right?

I'm an actuary at a firm that provides tpa services for small pension plans.

We have clients come in to get their tax work done after the fiscal year is complete in many cases.

They come in and say they had a bad year and can' afford to contribute to their pension.

Based on PPA there iss't much we can do for the j ust completed plan year due to the unit credit cost method. Sure I can freeze their plan immediately, but for the just ended year it doesn't necessarily help.

If the plan were frozen at the beginning of the just completed year it would have helped some, but that can't be done.

So if I report a plan minimum required contribution of say 50k in such a situation, the client isn't happy and my employer isn't happy as we may lose a disgruntled client who might go elsewhere to get the answer he wants. So in conclusion from the client and my employer's point of view I'm the bad guy.

Any suggestions?

Hello,

Have a client who is looking for RK and Reporting for a Stock Option Plan. They looked into EasiAdmin, but say they "can't separate RSU's that have multiple delivery dates into separate grants within the system". Can anyone recommend a software (preferably) or a service?

Thanks,

Eric

Background: MN enacted a new law that says employee eligible for the federal COBRA subsidy are also eligible for the MN COBRA subsidy. The state will pay the subsidy directly to the employer or COBRA vendor.

Employers who are required to provide notice under ARRA must include information about the availability of the state subsidy to "qualified individuals" residing in MN. The notice must include the eligibility requirements for the state subsidy and state that the individual must apply to the commissioner of human services to receive the state subsidy.

I have combed the internet and the state's website and have found very little information. There isn't any information under the MN Human Services dept site. I even found a copy of the COBRA notice that the state provides to its own employees and there is no mention of the state subsidy.

Does anyone out there have any insight on this new law? Perhaps model notice language?

If a modification is made to a volume submitter plan (even if minor) is it then considered individually designed? If so, it would seem the plan could be submitted for an individual determination letter. If it were not submitted for an individual DL, that would not necessarily mean you have a disqualified plan correct? It would just mean you could not rely on the volume letter.

Two DB plans are sponsored by different businesses owned by the same family. All participants of both plans are family members and they insist that there are no controlled group or attribution issues. If one plan is an overfunded 1-man plan, can it be merged with the other plan (which is not overfunded) in order to eliminate a potential employer reversion, i.e., use the excess assets from the 1-man plan to help fund the other plan? All help is greatly appreciated.

Having a hard time determining when to file the Schedule R. Instructions read that if Lines 1-8 are NA it should not be filed. So regardless if a plan needs to use the ratio percentage test to prove it satisfies coverage a Schedule R should not be filed? Am I interpreting this right.

Hello,

Have a client who is looking for RK and Reporting for a Stock Option Plan. They looked into EasiAdmin, but say they "can't separate RSU's that have multiple delivery dates into separate grants within the system". Can anyone recommend a software (preferably) or a service?

Thanks,

Eric

Last year we consolidated several good sized plans into a single successor. The final filings for several of those plans had gaps in their SSA schedules.

Specifically, we did not report those participants who had earlier been reported as Adds to the big plan, but which now have to be reported as Deletes to that plan and C's for the new plan.

QUESTION 1: So all that is simple and straightforward, but what raises the question is that there will be about 14,000 D's to the old plan and C's to the new plan. Does anyone have any experience with eFast filing an SSA that is that large?

Question 2: We've had so many unfounded inquiries from former participants, based on letters from the Social Security Administration that we'd like to do a final sweep, coding D for all past distributions to make sure that we did not miss any. But that sweep would give us about 280,000 D's. Anyone wih thoughts on the concept or the reality of trying to do the filing?

Thanks for any thoughts.

I have a client with a SH 401(k) plan. They staisfy the SH via the SHNEC. The Plan also has a profit sharing allocation as an integrated allocation of 81% of the TWB. They want to "Max out" the HCEs who make 230,000.

Questions

1) My understanding is that if this were a non SH plan (standrad 401(k) plan), the regular PS allocation would be considered a design based safe harbor as far as 401(a)4 is concerned. (As long as the integration portion does not exceed the 5.4% on the excess and is not more that than the % on the base. For example 7% on base comp and 5.4% of comp in excess of the 81% of the TWB.) Correct?

2) Because it is a safe harbor, each person is required to receive the 3% SHNEC first and then the integrated allocation of 7% on base plus 5.4% on excess. This combination allocation requires 401(a)4 testing as it is now not a safe harbor allocation design. (There are people who are not getting the "uniform" allocation soely under the permitted disparity formula.) Correct?

3) Based on #2, this plan fails the allocation method of 401(a)4. Therefore, the plan must be cross tested to ensure passage. Therefore, those employees who have qulaified for the SHNEC and not the integrated NEC would have to receive an additional allocation to ensure that they meet the gateway contribution. Correct?

Any responses are greatly appreciated

A 401(k)/PS plan just received an $8,000 check from a mutual fund company for their 401k plan as part of the SEC settlement with the mutual fund company to reimburse mutual fund holders for excessive trading costs, etc. for the period 2000 to 2003.

Since the date that is being used to determine the $8,000 figure is what the mutual fund company shows as recorded on September 30, 2003, who gets the money and how is it to be allocated? Do we need to go back to September 30, 2003? Could it just go into the current plan to allocate to current participants or to offset current plan expenses?

Many of the participants back in 2003 have retired or terminated. Do you think the IRS/DOL would accept a reasonable cost/benefit analysis to determine if it's really worthwhile to try to allocate an $8,000 check on balances that are almost 6 years old and to participants who are no longer in the plan?