Download attached chart. May be reproduced and circulated within your organization.

COLA_RO_2009.pdf

Download attached chart. May be reproduced and circulated within your organization.

COLA_RO_2009.pdf

Download attached chart. May be reproduced and circulated within your organization.

COLA_RO_2009.pdf

This is my first post & I want to start by saying this board is fantastic! It is extremely useful in getting a flavor for that elusive answer & it has helped me many times.

I have been in a large tier accounting firm for several years in compensation and benefits tax consulting. During this time I have supported the benefit plan audit practice doing tax reviews. Basically, 2-3 hours per plan reviewing plan documents, IRS d-letter, financial statements, etc. getting the auditor comfortable that the plan should retain its tax-qualified status. This often this involves helping the auditor get comfortable that any correction method proposed by the client is appropriate under IRS guidance. I have also done several deep-dive operational reviews of qualified plans for compliance with plan terms, code, regs, ERISA. I have also done a lot of tax consulting on the deferred comp and equity comp side.

In my experience the benefit plan auditors are not well versed in how to identify or deal with a tax qualification issue. Extrapolate this out to thousands of benefit plan audits each year (and the new 403(b) audits), and there should be a broader market for my skills, yes? So my idea is to do what I do now, but for local & regional CPA firms with large books of benefit plan audits. From there, I would try to do other work such as special projects, consulting on plan design, and training.

Some more tidbits:

(1) My value proposition would be increasing the quality of the audit and providing additional value (perceived at least) the client may not otherwise be getting.

(2) I expect this would be a high volume, low-hours-per-plan business. This might create a billing headache but I suppose I could outsource that.

(3) I want to be a soloist, at least intially (I suppose I have no choice the matter, at least intially!)

(4) I am a CPA not an attorney, so I need to avoid any unauthorized practice of law. If I avoid drafting plan documents and the like I expect I would be ok.

(5) Ideally I would like to work April-October and work part-time and travel the rest of the year. This has enormous appeal, particularly if I could net six figures during the busy time (am I dreaming?)

(6) I am at the point in my career when looking at spreadsheets and minutiae is not the best use of my time or skills. Tax concepts are what I do best, so doing the actual audits or recordkeeping would not be a good fit.

I welcome your thoughts and constructive criticism!

I believe some local taxing authorities treat 401(k) deferrals as subject to income tax (it appears that Columbus, OH is one). Does anyone know if there is a listing of those tax authorities anywhere?

Can anyone advise where I can find in Excel format all of the mortality tables stipulated in IRS Notice 2008-85?

The new 401(k) logo to commerate the super-bear market:

How do you anticipate the bailout will impact retirement plans? Or, how has it already affected them?

Assume an employer has a DB Plan and PS plan that covers the same employees in both plans.

Covered Compensation is $1,000,000.

The DB minimum under 430 is $300,000

The DB maximum under 404 (assiming no DC Plan) is $500,000

Can the sponsor contribute the $500,000 to the DB and also contribute 6% of pay $60,000?

Are they limited to $300,000 to the DB and also contribute 6% of pay $60,000?

Would they be able to contribute $500,000 to the DB but nothing to the DC?

Our process is that new hires are covered from their first day of active work. We give them 31 days to make an election and if they do not make an election, they are defaulted into certain products (medical, dental, vision), but do not get the other welfare-type benefits. After somebody elects (or defaults), we start collecting contributions on the next paycheck. Example, new hire's first day of work is October 17, makes election November 6, first deduction from paycheck is taken November 30 (no retroactive premiums for October 17-November 6), but they are in fact covered from date of hire. I have been told that in order for new hires to have retroactive coverage, the election period cannot be longer than 30 days, is this true? Could somebody provide me with a site for this? Thanks..

I'm trying to assist a small employer with his vesting calculation for a terminated employee who is threatening to sue. The employee had paid disability leave in 2 non-consecutive years. The payment came from a State of California disability fund with which I am unfamiliar. Can any of you west coast readers fill me in on whether this fund would be one that qualifies under DOL Reg 2530.200b-2(a)(2)(ii) that does not count toward hours of service?

I invested in a company many years ago that was supposed to go public a long time ago but never did. I suppose it is now considered a private placement. I really have no kinds of records of this investment, except whatever FISERV says there is. FISERV wants to resign as trustee of this account, and this asset, because it is essentiall worthless, even though the company still exists. They have sent me a letter saying that they are resigning and will be reporting this as a distrubution on a 1099R for the full value I paid for it. I have been paying them over $200 a year to keep it, which is just spending good money after bad. I can't figure out how to get rid of it, and there doesn't appear to be any documentation I can use to transfer the asset. I would gladly give it away or sell it for a doller, or whaterver just to get away from the annual fees and not have to pay the penalty for distribution, since there is no value.

How can I get rid of this tar baby? I would gladly give this away if I could.

Please Help...

WE have a nonqualified excess match plan. Employer match is deposited annually after the end of priro year to an account

Contribution years are 2005, 2006, 2007 & 2008

We did not withhold the FICA on the vested amount (vesting is 25%/year)

We are figuring out the FICA on vested amounts for each of the 4 years . For most it should be the 1.45%

We plan to submit all 4 years with a 941c for this quarter end

Question:

Do we need to send 4 years of amended W-2's?

Can we avoid this by having the Company pay the employee's share of the FICA due?

Does anyone have a sample letter we can send to employees explaining this correction?

Thanks

Lexy

I am curious about a 403b account that was opened at a non-profit organization. Several years after the account was opened, the non-profit organization decided to make matching contributions to the account. It is my understanding that the organization failed to file form 5500 for the two years during which they matched. Now I am being told that I must transfer my total account to a new 403b plan that has been established under ERISA guidlines. If I do not, I am told that my 403b account will become taxable. Is this correct? Or can I leave my 403b account with the current provider? I know that I cannot continue contributing to the current provider after December 31, 2008 but I want to leave the funds there and begin a new 403b. Can I do this?

Does the implementation of a 105 plan need to be a board action, or can it be re-worded to be an executive action? I haven't found any guideline on this in IRS regs. Help appreciated, thank you.

Does anyone know where I can find of list of which provisions of 415 can be incorporated by reference or which cannot? I'm hoping for something beyond the guidance in 1.415(a)-1 of the final regs.

Is there currently a requirement to notify PBGC if a quarterly is missed for a plan with 101-499 participants on every day of the prior year and in the case where missed payments are less than $1 million cumulatively? What about a funding deficiency under $1 million for a plan of the same size?

As far as I can tell, a plan under 100 participants is exempt and a plan 101-499 is exempt because a PBGC Notice under ERISA 4011 was not required for both the prior and current plan years because ERISA 4011 was repealed effective for plan years beginning after 12/31/2006.

But I keep reading outlines and publications describing reportable events for missed quarterlies as if the rules are unchanged.

How do others interpret this situation?

A participant requested a distribution from his DB pension plan and instructed the plan to pay the check to his IRA. He died before receiving the check. Also, the IRA was not yet set up. What can his wife do with the check? The plan refuses to take it back and make it payable to his wife, even though she is his beneficiary.

It took out a 4 year loan for $20,000 from my 401K in April of this year (2008). The deal was made over the phone with the 401K management company. The company told me they would notify payroll and I did not need to do anything more. On the cover letter accompanying the check the management company stated payments would be deducted from payroll.

Six months later, I learned from my employer that no payroll deductions were applied against the loan that the loan was in default. This is despite the fact that for the year, I had already had about $19,000 in payroll deductions sent to my 401K. (Apparently the 401K and the 401K loan are two different things. They say I should have known that from my check stub.) A 1099 had been sent to the IRS and the 20K that was a loan now becomes a distribution that is subject to penalties and taxes. I received no notice of the overdue loan until after the default occurred two weeks ago.

After many long and heated sessions on the phone with the 401K management company, I was eventually told that since I was still an employee with the company that the company could use the IRS's Voluntary Compliance Program (VCP) to correct the error. The management company still accepts no responsibilty telling me they sent a "feed" to my employer. Basically this means it would have appeared on a page at the management site if they had bothered to look at it. Since my employer tells me they have never had a 401K load before and were not notified, they didn't know to go look at the page. The management company tells them that is their fault.

I was just told by my company that after they looked into the VCP they decided the fees charged were more than a small company like ours was willing to pay. They told me they are sorry, but I am left to deal with it on my own.

Right now I face about $10,000 in taxes and penalties as a result of the oversight. My employer and the 401K management company accept no responsibility.

Are they correct that this is all my fault?

Do they have any responsibility to correct the error?

What leverage, if any, do I have to persuade them to do so?

An Employer established a Safe Harbor (matching) 401(k) Plan in 2004 (it is a calendar year Plan). For 2006, it appears as if not all of the Safe Harbor match was contributed as of October 2008.

My understanding would be that the Plan has an Operational failure for not making the required contribution and another operational failure by not promptly correcting the failed ADP test for 2006.

Thank goodness the Plan is Not Top Heavy so no problems there. No amounts have been distributed since 2006.

The correction to the contribution would be to fund it now, the correction for the ADP failure is the vaunted 1-to-1 correction.

Nothing else is coming to mind for a problem resulting from this error. Any ideas, hints or shots in the dark I might need to look at?

Thanks folks!