What is the usual procedure for correcting a plan's failure to timely amend in connection with amendments required as part of a Cycle A determination letter? Can such a failure always be corrected under EPCRS or does it depend in part on the nature of the amendments required?

I'm 58 and want to contribute the maximum $6K to a Roth IRA this year. To do so I must have at least $6K in taxable income. If I get laid off after earning exactly $6K, can I fund my $6K Roth IRA and fund a $6K spousal Roth IRA for my wife as well - or would I need to have $12K in taxable income to fund both?

Thanks,

Michael

If somebody amended their plan document for a law that they should have amended for during a previous plan year, do they stand as a tardy amender for all of the plan year in which they amended?

Is a refund paid in 2008 to correct a failed 2007 ADP test treated as an in-service distribution and added back for TH if the recipient is Key (as well as Highly).

What about if the Participant only becomes a 10% owner mid 2008. Is the same refund added back?

I think if you are Key you are Key for the year so it is added back as paid to a Key employee.

(Plan is TH for 2009 with the refund, not TH without the refund)

Thanks

The bulk of my IRA assets are at a very large firm that handles university employee retirement accounts. They have ignored repeated requests over the last 10 weeks to make a partial rollover to another IRA, including written transfer requests,certified letters and telephone calls. Obviously I am concerned that they may be stonewalling because they are in some sort of financial difficulty. At this point I want to rollover 100%, or take the entire sum out and deposit with another custodian within 60 days.

What now? What government agencies can I appeal to? SEC? FINRA? IRS? My representatives in Congress?

Advice very much appreciated

A client of ours recently called us with a very interesting question. A participant rents a place for him and his family. The property is being foreclosed upon and he therefore is being evicted. He can not prevent this eviction as it is out of his control. However, he wants to take a hardship so he can immediately place a security deposit and 1st months rent down on a new place for him and his family. The plan follows safe harbor standards. The participant has the court documents and notice indicating eviction. I personally think that since the hardship can't prevent eviction, it does not qualify. A colleague of mine feels that due to the economic times, the IRS is loosening their standards and would likely allow this with proper documentation.(notice, copy of lease for new place). I'm not sure if this is a risk I(or the client) would like to take---any thoughts? I'd greatly appreciate it!

An employer allowed a participant (NHCE) to join the plan at age 19 and the eligibility age was age 21. The employee deferred in 2007 and 2008. We were not aware of this until now (2/2009). The employee's actual entry date should be 1/1/2009. I referenced 2008-35 I.R.B. and it says, "The amendment may change the eligibility or entry date provisions with respect to only those ineligible employees that were wrongly included, and....". I have a concern with amending the plan for one person when several others were excluded because of age (all NHCE's). Thanks.

Plan calls for a safe harbor matching contribution determined and contributed on a payroll period basis. Client wants to do a true up after the end of the plan year. Can we true up or is that prohibited because of payroll period match determination?

I have a new CB plan for 2008 that defines the accrued benefit as the CB account balance and uses the 30 year T-rate as the AE and the interest crediting rate. There is no past service credit. As everyone knows, under PPA the target normal cost is less than the total cash balance accounts contribution. My software vendor has not yet programmed the at-risk 404 calc. When I work through an example from a session at last years advanced actuarial conference I seem to end up with the exact cash balance account deposit. That's a good thing. BTW, 415 does not come into play in this case. I'm just looking for some input from anyone that's worked though the at-risk calc as to whether that sounds reasonable. Thanks.

A woman with a Day Care election is going through a divorce. It has not yet been determined who gets to claim their son as a dependent on the tax return. Obviously this could result in an opportunity for a change of election later but do we need to be worried about her having this benefit now and then having to be liable for it if the father ultimately gains the son as a tax dependent? My intuition says no worries, just change the election when the divorce is final, but......?

We are having a bit of a dilemna. Although the payroll system is supposed to limit dependent care deductions to $5,000, one participant inadvertently had $5,800 withheld and forwarded on to the TPA. We asked for the extra $800 to be recharacterized as taxable income. Payroll refunded $800 under the dependent care deduction account then withheld $800 as a general deduction to get the tax consequences in sync. They are also only reporting $5,000 in box 10 of the W-2. This creates a disconnect betweeen payroll records and what the TPA shows. What amount should be listed in Box 10 of the W-2, $5,000 or $5,800?

I have a participant/owner, who is approaching age 55. He plans to continue working for some time, but would like to get his money out of the plan sooner rather than later. The NRA is currently age 65. No hardship exists. He is fully vested.

He is able to take most of his employer PS and match dollars out (24 month requirement), but he is still 4-1/2 years away from getting to his 401(k) and safe harbor contribution accounts. My understanding is that as long as he continues to work, he cannot take an in-service withdrawal of the 401k and safe habror until he hits 59-1/2. Is that correct?

If so, could the plan be amended to reduce the NRA to age 55? And since he will be 55 soon, the plan does allow withdrawal of his entire account balance even if he continues to work after 55.

Does this sound OK?

Thanks

We took over a plan for an LLC taxed as a partnership. I asked the CPA for the partnership income, and she e-mailed me back the partner's "guaranteed payments". Apparently that's all the prior TPA ever asked them for.

Am I correct in understanding that guaranteed payments are distributions to partners, but their net earned income can be smaller if the partnership has a loss?

So really, I can use this to do some estimates, but need final partnership income to determine contributions that are based on a % of pay?

We utilize a loan policy that states a loan can be denied if it extends beyond the Normal Retirement Age set in the plan, which is 65.

The way I understnad that the loan policy is outside the document, and the document states the simple characteristics on the loan but says it will be administered by an outside loan policy.

Is it optional to the plan sponsor that a 65yr old EE can take a loan out. If not, where can I find concrete regulations?

Stretch it further... can a 65yrd old take a principal home loan for 15 years?

In part, ERISA Section 101(j) requires a notice within 30 days after a plan has "become subject to" a restriction described in (1) or (3) of 202(g). The applicable provisions of 202(g) involve shutdown and other contingent benefit restrictions and lumpsum or other accelerated payment distribution restrictions upon bankruptcy, less than 60 and more than 60 but less than 80.

Assume a plan which does not provide for lump sum or other accelerated forms of distribution which is 70% funded. The plan has become subject to the restrictions, but they have no practical effect. Must the notice be given?

What about the inabililty to amend to increase benefits in this funded status? It doesn't seem that restriction must be communicated.

Any thoughts?

Thanks.

Should lost wages that are being paid pursuant to a settlement and subject to withholding be factored into a pension benefit formula?

The x-testing gateway may be 5%-of-pay or if less, 1/3 of the highest percentage-of-pay accrued by an HCE.

The 3%-of-pay 401k safe harbor NEC is counted towards the gateway.

Presuming that rate group and ABP testing will pass, may that 3%-of-pay 401k safe harbor NEC counted towards a gateway alone support accruals for HCEs if none of them accrues more than 9%-of-pay?

There does not appear to be a forum for Sungard Relius users so here is the message I asked for and received from SR:

"The DOL just posted the model for the notice Tuesday. It is 6 pages. We will be releasing a 2009 Sp1 version with the notice around the end of March."

Note, to complete this notice, you first have to complete Schedule H.

At my advanced age, I am reluctantly being push at the EA exams. I'm confused by the calculator requirements. Can anyone suggest a calculator that they would recommend as acceptable?

thank you.

It doesn't appear the proposed reg. on underfunded plans restricts the ability to take a plan loan when the AFTAP is less than 80%, since we are not talking about an annuity start date. But, if the loan defaults, you could have the equivalent of lump sum distribution of a prohibited payment. Thus, it seems inconsistent that you could take a loan.

What, if anything, is being missed here?