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a PBGC Notice under ERISA 4011 was not required for both the prior and current plan years because ERISA 4011 was repealed effective for plan years beginning after 12/31/2006.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!

According to the 403(b) regulations, an employee is considered "normally works less than 20 hours a week" if he meets two criteria.

1. Employer generally expects him to work less than 1000 hours in the year of hire

2. Employee actually works less than 1000 hours in the year of hire and each subsequent year.

If an employee works more than 1000 hours in the 12 month period, can he be excluded in a subsequent year using the "normally works less than 20 hours a week" exclusion if he drops below 1000 hours again?

In other words, can an employee fall in and out of this class? Or is he considered, once in, always in like normal eligibility?

Say that a small company (three employees all eligible) sponsors a profit sharing plan and makes a generous annual contribution (doesn't matter just setting a hypothetical employer example up). The assets are trustee directed and the employees have no say in the investments. Some of the investments are in very conservative investments such as savings accounts.

Let's say for example there are fees (minor but still they're there) charged for the mainenance of the savings account. It seems like 408 would require that the plan fiduciary have a written service agreement with the bank because technically the bank is getting a fee out of the plan's assets.

Practically speaking I doubt the bank would be very interested in accommodating a service agreement (I could be wrong). First - is a service agreement required here (I'm not aware of any de minimus exceptions under 408). If the answer is technically "yes," - what advice would you give a plan in this situation, assuming they can't get an agreement w/ the bank.

Close the account and put the money somewhere else? Hope the DOL would look kindly on the situation due immateriality?

Thanks for any help.

Can anyone confirm whether 403(b) plans that ceased receiving contributions before 1/1/05 are totally exempt from the plan document requirement under the new regulations? I have found discussions mentioning this but I can't track down the authority. Thanks.

Community impacts of Mandatory Insurer Reporting

Section 111 of Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA) adds new mandatory reporting requirements for Group Health Plan (GHP) and Non-Group Health Plan (NGHP) liability, no-fault and workers compensation insurance.

MMSEA expands and mandates the Voluntary Data Sharing Agreements (VDSA) for electronic reporting, originally conceived as an exchange of GHP entitlement data for Medicare beneficiary entitlement data. For those insurers that are already reporting GHP through VDSA, the changes to the reporting requirements are minimal (one additional piece of data). Insurers that have never reported GHP, an estimated 50 to 70%, will find the way has been paved by their industry competitors. However, the entire insurer industry is facing new, and still changing, NGHP data submission requirements, file transfer changes and compliance issues.

To be clear as possible at the moment, CMS defines who must report GHP data as "an entity serving as an insurer or third party administrator for a group health plan... and, in the case of a group health plan that is self-insured and self administered, a plan administrator or fiduciary." This "Responsible Reporting Entity" or RRE has a broader definition for NGHP, but still insurers will shoulder most of the burden of reporting.

Currently, CMS has no plans to lighten the reporting requirements for self-insured / small business reporting.

from piattconsulting.com

You guys/gals look at the yield curve lately? short term 6.5%+, mid term 8%+, longterm 7.25%. With the market tanking and the 430 segment rates lagging behind (5.09, 6.16, 6.58) it would make using the full unaveraged yield curve very tempting. Could save lots of $$ in contributions... but you would be stuck with it for a period. Then again, you could get burnt on the other end as well.

Am I thinking correctly?

430(h)(2)(D) CORPORATE BOND YIELD CURVE. --For purposes of this paragraph --

430(h)(2)(D)(ii) ELECTION TO USE YIELD CURVE. --Solely for purposes of determining the minimum required contribution under this section, the plan sponsor may, in lieu of the segment rates determined under subparagraph ©, elect to use interest rates under the corporate bond yield curve. For purposes of the preceding sentence such curve shall be determined without regard to the 24-month averaging described in clause (i). Such election, once made, may be revoked only with the consent of the Secretary.

We are terminating a calendar year 401(k) plan effective 11/15/2008. The plan has a 3% SH non-elective contribution. Is there a specific notice requirement for the SHNEC (e.g., 30 days prior to the date of the discontinuance of the safe harbor contributions) or does that advance notice requirement only apply to SH Matching contributions?

I am new into the 403(b) world and just wanted to see if I had understood the rules correctly. For a non-ERISA 403(b) plan, as long as they meet the Universal availability requirement for deferrals, they can have whatever age and service requirements for employer contribution and match? They are not bound by the 21/1 or 21/2 with 100% vesting. Also not bound by the 1000hrs for a year of service and 500 hrs for break in service. Also, can anybody recommend any really good reference books on 403(b) and 457 plans? Thanks

I have two QDRO orders in which I am trying to get vacated in order to modify. Both were put n place in 2006 less than one month apart in filing. The one for Texas gives the mother, my child's guardian a lump sum for for back child support which should have been modified and was denied and an additional; 200 dollars per month for 2 years. The child moved out of the mothers home in 2006 and has since resided with friends. The other child and her mother now live in Georgia but the QDRO stems fromSeattle where they have not lived in years. The order itself was sent to me after the fact. I was aware that it was being sought but never received any information as to when my court date was etc. (I reside in NC) That particular case was closed for 4 years. It was reopened in 2006 and I was charged back child support for that period. The document I received lists my daughter as a male and refers to me as Mr. Rogers. Yet I am told that I cannot get the motion dsmissed that I have to file motions to vacate on both the probably appeal. Is this true? is there more? What routes can I take if I cannot afford counsel and I do have other children in which I need to provide for?

DW2

Must the plan offer an in-service withdrawal provision in order for a participant to take distribution of more than their required minimum? Sounds logical that the answer would be yes, but I can't find any citing regs.

not sure what they are used for (except perhaps PIA calcs in DB plans)

on the plan limitation table

Bend Points for 2009 are 744 and 4483

cost of living% 5.8

national average wage 40405.48

taxable wage base 106800

We have a client with a Participant that received his military orders in July and has to report October 25.

We sent a distribution form to John Hancock w/the date he has to report as his Term date since he's working right up until he leaves. They said they can't process a withdrawal with a future term date.

Then we sent an in-service withdrawal form to them (the plan does not allow in-service distributions); now they say they can't process this without making the check out to the plan and charging a fee.

They've been no help and don't seem to know what to do about this type of distribution - even though we can't believe it's the first one they've received.

Has anyone found a way around this???

Thanks!

ok- plain vanilla crosstested integrated profit sharing plan (no 401k, SH, etc.) Split into 2 component plans to pass nondiscrimination testing. Plan passes coverage as a whole and both component plans pass no problem. Both pass 401a4 as well.

My question is...when I put my employees into the 2 "divisions" does it really matter where I put the employees who have not yet met the eligibility requirements of 1 YOS age 21 since they don't impact the testing?

I left them in the Relius "default" division, but seems to me I might want to put them one of the groups so that all employees are reflected in the 2 groups non discrim reports.

Am I overanalyzing? We had a client's crosstested plan go through an IRS audit, and after having spent so much time with the auditor on all the reports and details, I'm thinking it might be best if those noneligble excludables show up somewhere on the nondiscrim reports.