I have a client (files the Schedule I) that has it assets held with a collective trust (CCT). My question is do they need to file a Schedule D for 2008 (more than 25 participants in the Plan)? Everything I read about the Schedule D is conflicting on where or not it needs to be files for a small plan and CCT.

Company A is the parent of Company B. Both A and B operate in similar segments of the same industry. They each have collective bargaining agreements with the same union. However, each collective bargaining agreement provides for contributions to a different pension fund. Company B wishes to transfer a substantial number of employees from its payroll to Company A's payroll where the CBA provides for substantially lower contributions to that penson fund (there's no 70% issue here). Company B will continue to be liable to make contributions under its CBA for the remaining employees. Is there a partial withdrawal under Sec 4205 (b)(2), including the PPA "contract out" amendment?

Company B is trying to shift employees from the higher contribution CBA/pension fund to the lower CBA/pension fund. Both Funds have substantial withdrawal liabilities.

Comments would be appreciated.

RHB401

I have an employer who sold "all or substantially all" of its assets in an arm's length transaction to an unrelated 3rd party that would qualify for ERISA 4225(a) provisions on limiting withdrawal liability (WL) based on a percentage of the liquidation/dissolution value of the employer after the sale.

Unfortunately, the real estate on which the business was operated was included in the employer's assets and sold at the same time. If the proceeds of the real estate are included, ERISA 4225(a)(2) doesn't cause the WL to decrease. I have been trying to find justification for excluding the real estate (arguing that WL should be based solely on the business' operating assets) without luck. Has anyone heard of this argument being made (ideally, successfully)?

Does anyone know what the status of church plan documents will be under the new 403b prototype program? For church plans under Code Section 3121 and QCCO's, it appears they cannot use the proposed prototype document. And what if the plan is funded using with a 403(b)(9) Retirement Income Account where a plan document IS required? What document should they use? Will all Church plans need to use custom attorney drafted documents?

Thanks

Company has a SIMPLE IRA-DFI using IRS document 5305. They now (i.e. asap) want to allow employees to invest anywhere. So naturally, they should “amend” their SIMPLE to a SIMPLE IRA-Non-DFI using the other IRS document (5304).

But the IRA Answer Book (13th Ed., Q12-24) says that an employer can only amend their SIMPLE IRA at the start of a calendar year. So…

If an employer keeps all plan provisions identical (e.g. eligibility, etc. ), can the employer move from a SIMPLE-DFI to a SIMPLE-Non-DFI document mid-year?

Or would this be considered a plan amendment and so must wait until January 1?

Thanks for the help.

Steve

Have several related??? companies

A Owned by Mr. G

B Owned by Mr. G(90%) Mr. T (10%)

C Owned by Mr. G 78% Mr. T 22%

D Owned by Mr. G 26% Mr X 74% but contains all the employees for C (Leased Employees who were originally employees of C but a separate company was set up due to some tax reason)

Controlled Groups for testing?

A and B

B and C

How is D handled? Does this fit under affiliated service group rules?

Because not are all in the same controlled group - then this would not fit under a prototype doc, am I correct?

Thanks for any input

PF

Brain cramp: too much painting, yard work and running around with the kids this weekend....

I have two people over 50 who put away $20,500 (calendar year plan)); one is an HCE, the other isn't.

Can I use $15,500 for the HCE and the full $20,500 for the NHCE in the ADP test?

I am trying to complete a 5500-EZ. Question 10(g) asks for amounts received by the plan other than from contributions. I've read the instructions and know that rollovers, transfers and net income go on this line. It says not include unrealized gains or losses. Am I correct in assuming the interest and dividends are reported on line 10(g)? And where would the unrealized gains and losses be reported?

I am accustomed to a Form 5500, Schedule I, in which you can take the BOY and add in the contributions, unrealized, etc. and it balances with the amount of the assets at the EOY. Does the 5500-EZ not work this way?

Thank you in advance for the assistance.

A Form 5310 was filed for a DB plan with a plan termination date of Feb 29, 2008. Normal retirement Age is 58 (or 5 years if later). Plan Year end 12/31.

The IRS reviewer asks:

"Please demonstrate that the plan's definition of normal retirement age satisfies Regulation 1.401(a)-1(b)(2). Or, alternatively, amend the plan's definition of normal retirement age."

We understand that under 1.401(a)-1(b)(2), the Normal retirement age must not be earlier than the earliest age that is reasonably representative of the typical retirement age for the industry. But, (iii) states that in the case of a normal retirement age that is not earlier than age 55 and is earlier than age 62, whether the age is not earlier than the earliest age that is reasonably representative of the typical retirement age for the industry is based on all of the relevant facts and circumstances.

Does anyone have insight regarding what the IRS will consider in this "relevant facts and circumstances".

The employer is a PC that does dermatology work.

Alternatively, if we amend the plan now to have the NRA become 62 with an unreduced ERB at age 58, would that cause the IRS to invalidate any prior actuarial valuations that calculated the plan's contributions?

Not sure what to do with this one - any comments appreciated.

On the DOL website, the sample Election form for the premium reduction contains 5 questions. According to the form, to qualify a person must answer "yes" to all questions - including the Medicare ineligibility. An employee involuntarily retired, is currently and was previously Medicare eligible, and has elected dental and vision COBRA. Is this former employee eligible for a subsidy of their COBRA?

Example

Contrib made 3/1/09 for the 2008 plan year of 10,000 (effective rate for 2008 was 5%). To calculate the PFB at 12/31/2009 for the 2009 plan year (end of year val date) would I take the 12/31/2008 PFB (which is zero) increase at the 2009 investment return and then add in the 10,000 discounted to 12/31/2008 at 5% (9,919), then subtract the MRC at 12/31/2008, which was 8,000, to get (1,919) then increase this at the 2009 effective rate (let's say it is 5.5%) to 12/31/2009, to get 2,025?

Does this seem like the correct process?

Are companies offering these combinations?

Is future guidance expected?

Does the 1/2 qualify for rollover treatment?

How are you handling this for restricted plans?

If an IRA "blows up" under Code Section 408(e), the IRA owner is not liable for the 4975 excise tax. A strict reading of 4975 suggests (to me) that other disqualified persons who participated in the pt remain jointly and severally liable for the excise tax. On the other hand, if the IRA blows up under 408(e), it ceases to be treated as an IRA as of Jan. 1 of the year of the pt, so how could there be a 4975 liability if the account is not considered to be an IRA? Is anyone aware of any IRS authority on the issue of whether other disq. persons remain exposed to the 4975 excise tax?

Would anyone allow a claim for insurance on a hearing aid? Of course, we reimburse for the hearing aid itself. Thanks.

Our large government client recently discovered that excess deferrals were made to its 457(b) plan by a substantial number of employees during years prior to 2006. Our client would like to distribute the excess deferrals ASAP. As the excess deferrals are taxable in the year of deferral, how can the distributions be coded on a 2008 or 2009 1099-R, the only 1099-Rs available on the IRS' website? There are no codes for distributions taxable in years prior to 2006. Thank you for any suggestions.

just over a year ago, I foolishly allowed myself to be manipulated into a roth. since that time I have retired early ( age 52) from chrysler corp. there is approx: $3400 in account I need to access these funds and feel that I should not pay a penalty $100 fee plus 10 percent. need help.

Has anyone thought about how to complete line 23 of the Schedule SB if you are funding for a lump sum? Line 23 allows you to choose "Prescribed-combined", "Prescribed-seperate", or "subsitute" and "substitue mortality tables must be applied in accordance with the terms of the IRS ruling letter."

The instructions for line 23 state that "Mortality tables described in Code Section 430(h)(3), ERISA section 303(h)(3), and section 1.430(h)(3) ... must be used to determine the funding target..."

However, 430(h)(4) or 1.430(d)-1(f)(4)(iii)(B) state that if you are funding for a single sum, "the current applicable mortality table under 417(e)(3) ...is substituted for the mortality table under section 430(h)(3)"

So, if I am funding for a lump sum, and using the 417(e) mortality it doesn't seem that I have any possible options since the 417(e) mortality is not one of the prescribed tables under 430(h) or 1.430(h)(3).

Any ideas?

Participant goes from regular to temp status. Plan does not allow temps to participate, but she is allowed to stay in Plan. Contributions stop, but should loan payments stop as well? Does no longer fulfilling the requirements for being a participant also require her loan payments to stop?

If a broker-dealer sponsors a qualified plan that covers employees of the broker-dealer, can they serve as their own broker of record for the plan?

The plan is self-directed. The broker of record for the plan does not actually execute any of the trades as the TPA firm uses a trading platform to do all of the trading. In a typical arrangement the broker of record for the plan would receive a piece of the 12b-1 fees, commissions, etc.

Does this qualify for one of the PT exemptions if no commissions, trailers, etc. are paid to the brokerage firm?

Laura

Client wants to adopt procedures for handling unpaid leaves of absence for future 401k loans that will avoid some of the administrative issues they’ve had in the past. They propose adopting procedures giving employees returning from unpaid LOAs the choice of (1) re-amortizing the loan to ensure full repayment by the original end-date of the loan (thus increasing the amount of each payment via payroll deduction) or (2) resuming payment in the same amount as prior to the leave, with a balloon repayment of the unpaid balance at the end of the loan term. In my experience, nearly all employees would elect choice #2. This appears to be permissible under Reg. sec. 1.72(p)-1, Q/A9. However, I haven’t heard of plans incorporating #2 into their procedures and wonder if I am missing something. (What about the fact that the employer knows most employees will not make the balloon payment at the end, resulting in an automatic deemed distribution? Does that somehow taint the loan from the end of the LOA?) Does anyone have experience with this approach?