CB Plan effective 1/1/2006. It was set up with a 6-year graded vesting schedule. Under PPA I was under the assumption all Plans had to move to a 3-year cliff vesting schedule. Is this correct? Can this Plan continue to use the 6-year graded schedule?

In case you haven't seen it yet, benefitslink had the following PBGC relief posted today.

Plans under 25 particiants (as of prior year) are relieved of filing a reportable event for failure to make quarterly payments (so long as not due to employer financial difficulty). Plans between 25-100 lives (prior yr count) only need file 1 notice (not 4 separate notices for each missed quarterly payment) but they must due it by the 1st due date, which I think for calendar year plans is May 15th ?

See attached.

Thanks for the efforts of COPA/ASPPA and others who helped petition for this relief.

PBGC_Quarterly_Pmt_Notice_Relief.pdf

Employee, spouse, dependent. However, are the definitions of those broad enough to apply to the mother in this situation:

Employee is living with (not married to) a woman with whom he has fathered a child. The employee has a DCAP election. The woman loses her job and is now home to care for the child. The woman is neither married to the ee nor is claimed as a dependent.

Is this a qualfying event for a change of election?

I am doing a 2009 contribution projection for a sole-prop. In 2008 the sponsor contributed about $170K more than the required minimum, as such I have a pre-funded balance in 2009. My preliminary 2009 calculations show a required minimum contribution of $130K, but I still have the pre-funded balance of $170k (adjusted with interest). The software that we're using seems to have ignored the pre-funded balance (other than adjusting the assets).

Question: Is it required the any pre-funded balance reduce the year's required minimum contribution?

For this particular case, the sole-prop is not anticipating any earned income for 2009, but still wants to make a contribution. It was my understanding that any contribution made in excess of the required minimum would be subject to a 10% excise tax penalty, so if the current required minimum of $125K (according to the software) must be reduced by the pre-funded balance, then I really don't have a required minimim and any contribution would be subject to an excise tax penalty.

Any input is appreciated.

Employee had dental-only coverage under COBRA from former employment and chose not to enroll in her current employer's combination of medical/dental plan.

She will be losing dental-only coverage and now wants to join the medical/dental plan of employer. She is losing coverage because the former employer's plan is going away, not because of fraud or non-payment of premiums (which are exceptions in the current plan to joining under Special Enrollment).

I'm thinking we have to let her on the combo medical/dental plan. Advice? Thoughts? Other considerations?

Thanks for any insight you can provide!

Hi.

ERISA supersedes state payroll withholding laws with respect to plans that add an automatic enrollment arrangement. Governmental 457(b) plans are not subject to ERISA, so the ERISA preemption rule does not apply.

If a 457(b) plan adds an EACA under the Internal Revenue Code, does this preempt them from the state payroll withholding laws?

Thanks!

I'm wondering about the meaning of immediate and heavy financial need under 1.401(k)-1(d)(3)(iii)(A). If outside the safe harbor, is there any guidance/commentary other than what is provided in the regulation regarding the meaning of such term. If an employee's wages are being garnished because of a tax lien to a point where the ee is left with almost no income, then would that be enough for an immediate and heavy financial need, or do you need to wait until the point in time when the ee has missed mortgage payments, etc.

I came across this issue. If the employer wants to terminate an Annuity plan, what happens to the outstanding loans that participants have?

Everything that I have looked refers to situations when there is termination of employment but nothing about when the plan is terminated.

Generally plan documents do no provide for something like that (i think is a good idea to start amending plans to cover it too)

Anyone has any suggestions????

Thanks

I am doing a 2008 402(g) refund now and need to calculate the Earnings.

Are the earnings calculated thru the date of distribution?

Can someone give me an example on how the earnings are calculated?

Does Gap Earnings need to be calculated?

Happy May! The DOL has initiated a broad based investigation of a pension plan. The request asks for information and documentation since 2005. I have a different investigation initiated in 2008 that also asked for information and documentation since 2005. I can't find any rules governing the time scope of a DOL investigation. Any experience, thoughts or ideas? Thanks.

Individual dies intestate, with substantial IRA and Qualified plan funds. Possibly in the state of Texas, if that makes any difference. This is completely unrelated to any plan for which we do TPA work, so I have no vested interest in any potential answer.

Here's my question - under the language of the statute/guidance, the sons could not roll over to an "inherited" IRA for RMD purposes.

There are many PLRS allowing a SPOUSE to do a rollover in this situation. Since the non-spousal rollovers are relatively new, it doesn't surprise me that there are no PLR rulings (that I'm aware of) for a similar nonspousal situation.

My question, for any of you tax attorneys who care to take a stab, is this:

(A) - what is your guess as to the liklihood of success in applying for a favorable PLR ruling allowing a non-spousal rollover?

(B) - not asking you to reveal your fee structure, but if you were to make a guess on a reasonable range of attorney fees and IRS fees to apply for such a PLR, what might that be? For example, less than $10,000? $10-20,000? More?

Many thanks for any input. (Edit was for a typo)

Can you amend a plan to remove the EACA provision mid year?

OK, lets see if I can get this simplified, have a client who is under random audit, everything seems to be in order except timing of 401 k deposits. they were generally made on the 10Th of the month following calculation from prior month. IRS is asking that (audit year is 12/07) that employer provide breakdown of 401k amounts from weekly payroll for years 2006,2007,2008 in order to calculate and assess penalties for late deposits. the issue is who determines "reasonably segregate amounts" versus the employers pattern of the 10th of month following? total plan assets are about 500,000.00 all 401 k contributions about 18 participants total. Plan is not top heavy 2 key/owners have small amount of benefit in plan. Any input appreciated.

I was asked to look at a strange animal.

a target benefit with mandatory contributions????????

the regs have instructions on safe harbor targets which say that you can't fund the benefit with ee money.

does that mean you can do this , making it non safe harbor plan, and if so, how the heck would you even test?

In 2009 the PBCG guarantee is limited to $54,000 at age 65, and assume it is $27,000 at age 59. Also let's assume that in 6 years (in 2015) the PBGC Limit at age 65 has increased to $75,000. A question:

If someone currently age 59 retires in 2009 with a straight life annuity of $65,000 annually, and the plan terminates in 2015, is that person's PBGC guarantee in 2015 limited to the $27,000 since he/she was 59 at the age of retirement, $54,000 because that was the age 65 Limit in the year she/he retired, or is the full annuity of $65,000 guaranteed because the reference number is the increased PBGC limit of $75000 at age 65 in 2015 (noting that this person reached age 65 in 2015)?

Does anyone see an issue with setting the interest rate for a loan intentinally high such as prime plus 3% to discourage people from taking a loan? I realize the rate is supposed to be commercially reasonable rate - but there is next to no guidance as to what that actually means. Looking at various entries in this message board it appears that prime + 1 is the most common rate but is there anything to preclude a higher rate? Loans aren't a protected benefit so I can't come up with a reason that it couldn't be high.

any insights would be helpful.

thanks

I have a corporation that files taxes on a calendar year basis. 2008 taxes were filed timely without an extension. No deduction for employer contributions was taken. They now want to make a contribution for 2008.

2 questions:

1. Is the 30 day allowance to allocation contributions for prior year based on 3/15 if no extension was filed? Or based on 9/15?

2. If they did decide to allocate a contribution in 2008 and deduct it for 2009, could they also deduct the 2009 contribution on an accrual basis in 2009? This would result in the deduction for 2 plan years in 1 tax year. The deduction wording appears somewhat ambiguous, but it seems the alternative would be to perpetually deduct employer contributions on a cash basis.

Thanks for any help!

Wes

Need to allow someone to enter the Plan early and give them a contribution to pass testing. Is this allowed? And if so, how would the corrective amendment need to be worded to allow the early entry?

I have a retirement plan with a 1k mandatory cash out. I'd like to up that to 5k and comply with the roll-over to IRA requirements. Can the mandatory cash-out for all accounts with 5k or less be made retroactive? (I don't think it violates 411(d) but can't be sure). Or can it be only for future terminations?

Any insight would be appreciated.

thanks

We are going to try the IRS service

Can we send 49 letters to them and then another couple batches of 49 without being charged?

What other services including locator services , websites, etc... are out there?

thanks

Laxy