The PBGC issued Technical Update 08-04 that specified what interest/mortality basis to apply when determining a lump sum in a standard termination. Perhaps I'm just getting too old and confused to digest the morass of published words. So, I looked to ASPPA ASAP explanation and find that it distills the PBGC TU with the same legalese.

Is the TU simply saying determine the lump sum as if the Plan were ongoing? I.e., you don't really do anything different.

Let's do what I had hoped ASAP would have done -- use an example. Suppose we have a calendar year plan with a calendar year stability period and a two month look back. The Plan is terminated December 31, 2008 and distribution is made in December 2009.

Consequently, I interpret that we would use the segment rates for November 2008 (distribution in 2009). Thus, we would use 5.24%, 5.69%, and 5.37%. We would use the applicable mortality table for distributions with stability periods in 2009 (not 2008) as published in IRS Notice 2008-85.

Is there more to the PBGC TU than I have understood? If so, then what interest/mortality basis is it saying we should to determine lump sums in the above example?

A spouse is receiving RMDs as the beneficiary. Who gets the 1099 and what would the code be?

Dead guy - Code 4?

Dead guy - Code 7?

Wife - Code 7?

Wife - Code 4?

I've been stuck on these scenarios for years and haven't gotten a solid answer out of anyone :\

Just a lot of shrugs and guesses.

Employer-Cycle C filer executed a Form 8905. The IRS has since issued a favorable opinion letter to the plan sponsor. Must the employer now make sure it adopts the actual newly-approved prototype by February 2, 2009 (the end of the Cycle C EGTRRA RAP), or does its prior exection of Form 8905 act as a placeholder until April 30, 2010? R.P. 2007-44, section 17.04(2) suggests that actual prototype must be adopted by February 2, 2009, not by April 30, 2010.

Thanks very much.

The IRS has only provided guidance re: 5498 reporting requirements. Has anyone heard if they are coming out with any more guidance for other issues (e.g., protected benefits, withholding)?

Thanks!

I am relatively new to church plans. Why would a church 403(b) plan file a Form 5500 if they are not to do so? I did a search on freeerisa for archdiocese and found 32 that have filed form 5500s - many of which are for 403(b) plans.

Thanks.

1/1 plan year, participant is eligible on 7/1/08. No automatic enrollment feature is in place and the participant has not made an election - but the employer deducts 5% from the paycheck into the 401(k) plan.

I'm assuming this is an operational failure - because the participant has not made an election. Is this corrected in the Self Correction program? Is the correction to simply refund that money back to the participant? Are there any other penalties?

The 2009 ppa lump sum rates for plans that use December 2008 appear to be significantly lower than plans that use November 2008.

Nov 5.24 5.69 5.37

Dec 4.41 4.57 4.27

Seems like participants from one plan to another could receive significantly different lump sums this year.

Plan years that begin in 2008 and change on, say a quarterly basis and would use the Dec rates are 3.64 3.72 3.57 from Sep rates of 4.59 4.89 4.79.

Owner Only or Solo 401(k) Plan. Large amount of assets. Uses individually directed Brokerage Account.

Purchases a Canadian mining stock via the Toronto stock exchange.

The stock issues a dividend. There is a 20% withholding on the dividend.

Is there a procedure or method to have the withholding returned to the trust? Or Quote - Unquote Is it a cost of owning the stock?

A participant under age 50 had an Excess Deferral of $7,000 in 2008. They contributed $22,500 in total for 2008.

This participant is a HCE.

It is my understanding that the excess deferral needs to be included in the ADP test.

Since this excess was caught before the W-2 was issued, can we fix the W-2 to include the Excess deferral as Income and therefore, not have to include the excess deferral in the ADP test?

NVM

Our self-insured plan covers stepchildren. One of our employees is getting a divorce and wanted to know if his former stepchildren could continue to be covered since the plan allows for coverage of an ex-spouse. If we were to receive a QMSCO must those children be covered?

If a plan has been reporting its ps-58 costs via 1099-R each year, and lets say those accumlated reported ps-58 have totaled $1,000. Now the participant has terminated employment and is doing an IRA rollover of her $100,000 account balance. 2 questions:

1) Should the rollover 1099-R simply show a gross distribution of $100,000 with a taxable amount of $0.00?

2) How does the already declared $1,000 in ps-58's get tracked/credited once the $100,000 leaves the plan? I assume that if nothing is done, the $100,000 goes to the IRA, and is then taxed as it is withdrawn from that IRA. Where/when does the already taxed $1,000 used to reduce the taxable portion of the participant's subsequent cash distribution(s)?

Thanks

Can a straight % of pay contribution cash balance plan be cross tested on contributions alongside a regular old integrated profit sharing plan w/safe harbor 401k?

Youngish owner with oldish employees.

What are the ramifications if plan fiducuiares are not covered by an ERISA fidelity bond? We have clients who have been putting zero on the Schedue I for years.

What could happen if they ever get audited, what are the penalties?

Automatic Enrollment

DOL, IRS Issue Guide for Small Employer Automatic Enrollment

The Department of Labor and Internal Revenue Service announced Jan. 15 a new publication to help small employers understand automatic enrollment for tax code Section 401(k) plans.

The publication describes an automatic enrollment Section 401(k) plan, how to set up the plan, management of the plan, fiduciary responsibilities, and a checklist to ensure compliance with the law, the department said.

The publication is part of the agency's ongoing campaign to educate employers, particularly small businesses, and help workers and their families save for a financially secure retirement, the department said.

The new publication is available at http://www.dol.gov/ebsa/pdf/automaticenrollment401kplans.pdf.

Does anyone have a good, updated state tax withholding chart? I think mine is from, like, 1989 or something.

Thanks!

Can someone point me in the right direction for finding the document requirements for 403(a) qualified annuity plans?

Do they follow the same rules as qualified plans, including the same restatement timing?

Thank you!

Laura

I am seeking help in the development of a VEBA. Based on this sites threads and other research it seems that most VEBAs are established for medical benefits. My desire for the VEBA is for the provision of life insurance, retirement, disability, and critical illness benefits. The employee base is federal employees.

I have talked to attorneys, the library, our department of state, any they have been little help. Can someone make a recommendation of anyone who can help in the development of the required IRS documents, structure of organization and such. I am nearly lost in this whole thing!

When does a partial termination take place in a controlled group?

When can someone use a snap on amendment to amend a retirement plan document?