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?

Can a Loan Policy Document specify a minimum loan repayment amount? For example, a minimum loan amount of $1,000 and a minimum payment amount of $50 per pay period.

Our employee elected an annual amount for his flexible spending account. For some reason it was set up in our payroll system to stop after one deduction. Therefore, the employee had full benefit of his flex spending account because it was reported to the TPA that he had elected his certain annual amount and as he sent in his claims they were paid. However, upon auditing new enrollments for 2009 it was discovered that he had only one payroll deduction made during 2008.

Queston: Can we go back and recover this amount from him in 2009?

The question is a legal one based on the Section 125 rules and I don't want to go research it. I know that if he had used all of his money in claims on January 1 and quit on January 2nd we would not have collected the money either. I just want reassurance that we can't go back and get the money.

A qualified plan issued a 2006 1099-R in January 2007 to a participant that took a full distribution in 2006. The 2006 1099-R was marked as "eligible for rollover." The plan discovered in 2008 that the distribution was not eligible for distribution. Can the plan issue a 2008 1099-R to correct the 2006 1099-R it previously issued? Many thanks,

CTB

Situation: Calendar plan year but insurance renews every March. The options as far as I can tell are:

1. Try to get the insurance company to to change their renewal date.

2. Just assume a lot of elections changes come March.

What the employer wants to do is either....

a) A short 2 month plan year and then do plan years from March to February to match insurance.

b) A long 14 month plan year and then match with insurance.

I don't think those last two are even feasable or allowable are they?

Any other options? The employer does not seem to want to do the first two but to my recollection, those are the best ways to handle it.

Thanks.

client was ordered by DOL to pay overtime to employees for prior years. the actual backpay was done in 2008 but was for 2006 and 2007. do you have to open prior years with regard to the plan calculations (i dont think so because the compensation is paid in 2008 not the prior years. Also, what do you do about 2008?