Hello all,

The participant previously elected to take distributions utilizing an installment payment method. It was discovered that during 2007, one of these installments was not made. What would need to be done to correct this? Do you just make the required payment? Should earnings be caclculated? Do we need to use EPCRS?

I'm familiar with how to correct a missed deferral, but have not run in to this issue before, and I can't seem to find any info on how to correct it.

Any help would be appreciated.

Thanks!

Hello Everybody,

I have an interesting situation. A participant made his deferral contribution for plan year 2008 twice. We had not discovered it until AFTER his money was distributed out of the plan and into an IRA.

This deferral amount plus earnings (or, in the case of this year with negative earnings, we net the two), is now taxable. He distributed out in November of 2008, so my calculation of earnings goes from when the money was deposited in to when it was distributed (1/24 - 11/18).

My question is, once it moved to the IRA, do we need to do anything to correct it there? It is not pretax money. Do we need to inform the broker? Do they need to recatagorize it?

Thank you for your help!

We recently pulled all of our welfare benefit programs together under one document, however, the plans still exist separately. Do we need to file separate 5500's for each or could all be filed under one 5500 form?

A Company decided to stop the Safe Harbor Match Contribution effective

5/1/2009 (proper notice was given), but mistakenly submitted contributions for the 5/1/09 and 5/8/09 payrolls that include the Employer Safe Harbor Contribution.

What is the correct way to handle getting the Employer Safe Harbor contributions out of the participants accounts?

Can it go back to the Employer or does it have to stay in the Plan in a Forfeiture account?

The company wants the money returned to them, and not left in the Plan as a Forfeiture.

Does NY state have mandatory state withholding on a lump sum from a qualified DB plan, and if so, how much?

If a DC plan has transferred MP assets (thereby requiring annuity form of distribution), if a participant requests an annuity is there a requirement in this case for the annuity contract to be held by the plan? I guess I am unclear of the logistics of this type of distribution form. If the contract is held by the participant, then aren't we just really doing a "rollover" to the annuity provider who then provides an annuity contract to the participant? If so, what is the point of saying that the plan must provide for an annuity option?

Thanks!

Can someone confirm if a distribution under $200.00 from a 401(k) plan would be taxable income? I know that the 20% Federal Withholding is not required to be withheld from total distributions of less than $200.00.

Thank you!

I am looking for any information on options available to 501©3 regarding benefit plans especially 403b plans. We are an oversight organization with only two employees and one is contracted through a religious order therefore is not considered an employee. I have spent two years speaking with brokers with regard to options for plans - the employer does not have contributing funds and so it will be only funded by employee deductions. Both Vanguard and Fidelity require employer contributions. Any options?

For the statutory change in method required by PPA - are you checking Yes on this question? If so, does anyone know of a sample attachment I could look at? Seems silly to have to check Yes on this and submit an attachment when they know everyone had to change the funding method!

husband and wife are setting up a plan. They will be the only participants. By my calculations they would need to earn $260000 between them to max out. They are both over 50. Do you agree?

annual comp: 260000 total

2009 deferral: 16500 each

2009 profit sharing: 65000 (32500 each)

2009 catch up: 5500

Anyone have any sample amendments to allow for an "in-service" distribution from a pension plan at age 62?

Where is this going (what can employers do to encourage HRAs legally)?

Former EE is on COBRA and subsequently designated an AEI due to involuntary termination of employment. They pay the 35% of premium for 1 month but do NOT submit their AEI form certifying they meet the 5 eligibility statements. Now they are terminated for nonpayment of premium and we have been unsuccessful in reaching them.

Is the employer obligated to "hunt down" the AEI form from someone who has paid their 35% and is otherwise eligible due to involuntary termination?

If we cannot reach this person, and we are obligated to ensure receipt of the AEI form, should we charge them 100% of the premium, apply their 35% payment to that amount and adjust their termination date?

Children of HCEs are also considered HCEs, right? I'll assume so.

Is there a coverage test-type requirement with a tuition reimb. plan?

This wording in pub 970 makes me wonder:

This program only qualifies if..... The program benefits employees who qualify under rules set up by you that do not favor highly compensated employees.

I'd like to interpret this to mean the benefit offered to eligable HCE's is not greater than the benefit offered to eligable non-HCEs. And also; The eligibility requirements weren't set up to favor HCEs.

Am I on the right track?

Thanks in advance for your input.

A plan has a normal retirement age of 55 (yes, I know that is unrealistic BUT I have statistics to prove it is valid for red-headed actuaries working on PPA <GG>!!)

The plan document has the following definition of actuarial equivalence:

Pre-retirement

Interest

What is the 2008 415 dollar limit at 55??

I have a client who has two plans - a DB Plan and a 401(k) Profit Sharing Plan. Two owners and about 5 or 6 employees. The owners participate in both Plans.

How do the permissive aggregation rules work? Do the two Plans need to be tested together for 401(a)(4)?

What about top heavy? The Plans are top heavy (tested together or separate), no matter which way you slice it. I always thought if the keys participate in both they need to be tested for top heavy together. If this is the case, is the top heavy minimum then 5% of annual compensation in the DC Plan?

The amount of salary deferrals available for a hardship is supposed to be the cumulative salary deferrals without adjustment for gains or losses. But when there is a loss it seems like it must be adjusted because you can't distribute more than is in the account. If the only money in the account is deferral source, it's easy, but what if there is other money available? Example: cumulative deferrals $20,000, current deferral balance $13,782. The available hardship is supposed to be $20,000, but to distribute that amount would require taking $6,218 from profit sharing or match that do not allow hardship distributions.

Related quandary, what about mutual fund loads? The money is not in the account, but theorietically it seems like not including the full amount withheld from pay violates the rule about not adjusting for gains or losses.

Does anyone have a crystal report that would show participants name, address, social, loan id, loan amount, frequency, # of payments and payment amount? We are looking to supply this kind of report to each of our plan sponsors after a loan has been processed.

It looks as if WRERA invoked the law of unintended consequences again:

Is any one doing anything more elaborate than assuming that current year's estimated expense is the same as prior year's actual expense? If so, how would you ever modify the assumption in the future without obtaining IRS approval?

This is an interesting subject. Assume frozen plan, no shortfall amortization charges apply, and suppose the expense assumption is CYE=PYA as described. Suppose 2008 expense -- all actuarial fees -- was 100,000 [i reduced my fees!] but client announces for 2009 and thereafter he will pay all expenses directly rather than out of Trust. So, TNC for 2009 is 100,000. Now, client must contribute 100,000 as minimum and must also pay 100,000 directly. To make matters worse, the 100,000 client contributes for 2009 is not an excess contribution so client does not enjoy PFB buildup.

Does this just fall into the category, "Ah, that's too bad" or am I missing something?

If I'm not missing something, then this particular client would be wise to always pay expenses from trust which is clearly not the IRS's intention.

The other side of this coin is suppose client has historically paid expenses (including investment management) directly. So, 0% expense assumption is appropriate. Client rolls around for a few years and continues to pay expenses directly. Now, client's business is in the potty so client decides to pay expenses from trust and the prospects are he will continue to do so. However, expense assumption is "0%." You can't change it without IRS approval. Are you required to request IRS approval or do you qualify your SB certification? Suppose client is unwilling to pay cost of obtaining IRS approval. Then what?

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