Would a 5330 need to be filed if a participant went over the 402g limit in 2007 and the refund was not processed until July of 2008?

A plan has a partnership as an investment and received a capital call. by mistake one of the owners of the plan sponsor sent the money for to satisfy the capital call. now he needs to be reimbursed by the plan. how can he do this without running afoul of the PT rules?

A plan participant has exceeded the 415 limit for the Limitation year of 1/1/07 to 12/31/07. Now, the plan document says that the correction method is to refund the elective deferrals (with attributable earnings). However, it doesn't specify how those earnings should be calculated.

Now, I know that the Final 415 regulations say that a plan sponsor should use EPCRS to correct a 415 failure, but I believe that is effective for 1/1/08 Limitation Years. So for this situation, the plan sponsor is still using the direction from the plan.

I looked at the old 415 regulations - in §1.415-6(b)(6) - and all it says is that the 415 refund should include "gains attributable to those elective deferrals and employee contributions". Again, no specific instructions on how to calculate the earnings.

So I went to Sal to see what information was in the ERISA Outline Book. In his section on returning excess annual additions (in the 415 chapter), he just says "gains credited on the excess amount should be distributed along with the excess amount". Not much help.

So one of my co-workers said that Appendix B of the EPCRS has 4 different safe harbor methods of calculating earnings - and that the plan sponsor can use any one of those methods in calculating the earnings on the excess annual addition refund. However, it specifically says in this section that "This section 3 does not apply to corrective distributions or corrective reductions in account balances."

So I guess my question is this - how is it determined how earnings should be calculated on an excess annual addition refund? Does the plan need to be more specific? Has the IRS issued any guidance - seeing as how there is nothing specific in the 415 regulations?

Employer has hired consultant to create a web-based retirement calculator to assist participants with calculating how much they should save to achieve a desired standard of living upon retirement. The consultant will charge a one-time set up fee and ongoing annual maintenance fees for this service. The calculator will provide information for both DB and DC plans for Employer.

Can the expenses related to this be paid from plan assets? If so, how allocate among the DB and DC plans?

Thanks.

I have been lucky enough to not have to prepare any RMD calculations under the final 401(a)(9) regulations up to now, so forgive me if the answer is obvious.

My client has a frozen defined benefit plan with a rollover account. He turns 70.5 in 2008 and is required to begin distributions by 4/1/09. His accrued benefit (sla) is $3,125 as of 12/31/2007. He just sold his practice, but maintains the corporation that sponsors the plan and will be receiving accounts payable throughout 2008. Because of this, he is looking for a deduction for 2008 and will likely amend the plan's benefit formula effective 1/1/08 by 3/15/09 in order to acheive a deduction. After this, he will be closing the corporation and terminating the plan during 2009.

He is interested in knowing what his RMD's will look like with respect to the defined benefit plan until the termination occurs. My understanding is that he will begin to take a monthly distribution of $3,125 per month by April 1, 2009 through December 31, 2009 (this is his RMD for the 2008 calendar year?). When the rollover occurs, an amount equal to any remaining payments of $3,125 through the end of year that weren't made because the plan terminated prior to their date of payment plus either 12x the new monthly benefit as of 12/31/2008, or an amount equal to his lump sum divided by the applicable factor will not be eligible for rollover and will be taxable to him. In effect, he is taxed for 2 RMD's during 2009.

Is this correct?

I am assuming that the rollover account within the DB account is being handled correctly.

Does anyone know where the IRS is on processing determination letter requests? Their website says that they are currently working on "on cycle" Form 5300 applications postmarked January 2007: http://www.irs.gov/retirement/article/0,,id=150182,00.html

If this is true, they are more than a year behind.

I submitted an on cycle 5300 for a DB plan in early March, 2008. Their confirmation letter said that we normally could expect to hear from them within 145 days. Having yet to hear anything, I called and spoke with an IRS agent today (September 23, 2008) who said it had not been assigned yet and could not tell me when it would be assigned, referring me to the above site. Does anyone have any first-hand knowledge of how long the applications are taking for processing?

Is there a new rule that when offering a lump sum sponsors are required to show the immediate annuity version of the 75% J&S even when it is an optional form and not the normal form for married participants? The QJSA always had to be shown at the immediate age, not sure about the optional form.

Does the Heroes Earnings Assistance and Relief Tax Act of 2008, HR. 6081 apply to all plan types? such as 403(b) and

457(b) governmental plans?

Is a Plan Termination an event that would automaticially cause a participant to be in Default of his Loan? of just an trigerring event that will cause the loan to automaticailly become due and payable?

I know that even if an employee does not benefit from a plan, he can be included in the average benefits test so long as he is not excludable. But, in figuring out the employer contribution (the numerator) which normally includes, the match, employee elective deferral and pension amounts, can you add in the % that goes to social security (the permitted disparity) even if that employee will not actually receive the benefit because he is being terminated and the company has a "last day requirement"???

We have a number of plans that cover only owners and are less than 5 years old. The plans have year-end valuation dates. Our Consulting Actuary has suggested holding off on the 2008 AFTAP cerfitications for now, rather than change the valuation date to beginning of year. 2007 AFTAP certifications were done timely.

So, the only restriction for these plans would seem to be the inability to pay lump sums. Since the plans only cover owners, this would not appear to be an immediate concern. Is there anything other issue I would need to address? Thanks.

I am covered under a Defined Benefit Plan and I have a rather unusual situation. My date of separation is Sept. 1988...yep...twenty years ago tomorrow. I filed for dissolution of marriage in pro per in 1992. At some point in the process my husband filed a motion to quash because he felt he didn't have enough info re my pension plan. He was given the info he requested by the plan administrator after which he filed for a court date to make the pension an issue. I was improperly served according to the court clerk and his request for a hearing was denied until such time as he executed proper service, etc., which he never followed through with.

During this time my son had been ill for 4 years and subsequently passed on in January of 1993. I been so emotionally drained by all this that I hadn't the energy to resume the divorce issues and my estranged spouse had moved out of the state and deliberately kept his whereabouts concealed from me. I did see him at our son's funeral but naturally there was no discussion of the pending dissolution at that time. Very late in 1993 the estranged spouse contacted me and requested I send him detailed info on my pension plan.

I obtained an actuarial statement and mailed it to him. Sometime in 1994 he called again to discuss the report and to object to the amount of his community portion. I suggested he obtain his own report if he had further issues. From that conversation in 1994 until this past May, 2008 I never heard another word from him and had no idea as to his whereabouts.

During 2003 I became eligible to collect my pension and have been receiving a monthly benefit since then. This past May my plan informed me that the spouse surfaced, filed a Joinder against my benefit and they were required to reduce my benefit by 50% until such time as he was able to come to some kind of agreement with me or obtain a court order/QDRO.

There is a court hearing coming up next month...he filed an Order To Show Cause...he asking for spousal support and attorney fees (we're both in pro per) as well as a share of my pension. We are still NOT divorced.

I'm leaving lots out in an effort to shorten the story but one of the issues we're having now is he is demanding I pay for having a QDRO drawn up as well as threatening to sue my former employer, the plan and me with fraud due to the fact I was allowed to receive my benefit. I know this is an unusual situation but I'm feeling that the responsibility for securing his share of the pension was his. I didn't give too much thought to him over the years but he always knew where I worked, he'd been in touch many times with the plan administrator, etc., yet never made an effort to file a Joinder or obtain any other kind of court order in all those years until this past May.

I would so appreciate any input anyone might have or recommendations of where I can obtain citations re similar cases involving responsibility of alternate payees in these types of matters. Thank you so much.

All,

What exactly is the reach of 457(f)? Does it reach normal payroll payment practices? The 457(f) regs speak of a plan as being any arrangement under which "the payment of compensation is deferred . . . ." Deferred from what point in time? Deferred from when it would otherwise be paid or be made available? For example, what if an employee is paid monthly on the first of the month following the month in which the services are performed (December earnings are paid on January 1)? The first of the next month is the normal payroll payment date. Is that payment "deferred" under the 457(f) regs?

Thanks,

Ken Davis

Univ. of South Alabama

Can an employee still contribute both $15,500 to a 401(k) plan and $15,500 to a 457 plan in 2008 or did PPA change that? What about in 2009? Where could I find the citation?

Thanks!

Does ERISA permit a plan administrator to deal with the agent of an employee per a power of attorney in the following respects under a state's enactment of Uniform Power of Attorney Act,

Unless a power of attorney otherwise provides, language in a power of attorney granting general authority with respect to retirement plans authorizes the agent to: (a) Select the form and timing of payments under a retirement plan and withdraw benefits from a plan; (b) Make a rollover, including a direct trustee to trustee rollover, of benefits from one (1) retirement plan to another; © Establish a retirement plan in the principal's name; (d) Make contributions to a retirement plan; (e) Exercise investment powers available under a retirement plan; and (f) Borrow from, sell assets to or purchase assets from a retirement plan.

Another provision, at least as enacted in my state, provides

A person is not required to accept an acknowledged power of attorney if: * * * (b) Engaging in a transaction with the agent or the principal in the same circumstances would not be consistent with federal law;

For new plans in 2008, is a new plan considered a plan amendment for purposes of calculating the maximum deductible contribution with regard to the funding target for HCEs?

I know in 2007, this was not the case, but the 2008 ERISA Outline Book says this is uncertain for 2008 (it sounds like it leans towards a new plan not being an amendment similar to the 2007 rule).

Any thoughts?

Thanks!

Can anyone help with a Relius question? I know there is a Relius posting section but no one is ever there.

Its an easy one...

one of our offices is having lots of client complaints about Relius and how it uses an older version of Java. Apparantly when the clients go in to upload their payroll, if they have a new version of Java, they have issues uploading the payroll, and they are directed to download an older version of Java??

Relius has apparantly repeatedly just said to direct the clients to download the old Java. But the office is having clients ask why they have to do this, why download an old Java, etc...its becoming a headache for the office.

Has anyone else heard anything about this? Seems it would not take Relius any time at all to deal with this, but the office has had no luck?

401(k) document was amended to include company B as an additional adopting employer of Company A. The primary employer, A, merged with another company © and the plan assets of company A are being transferred to Company C's 401(k) Plan. Company A's plan is to terminate. There are two remaining participants in the B company. This company was not part of the deal between A & C. Can the two participants from B be terminated and paid out fully vested? Thanks in advance to making time to assist me with this!

A 5500 is required for a welfare plan with over 100 participants. How is a voluntary life (or vision) insurance option under a cafeteria plan classified?

If 100 or more employees elected the insurance through the cafetria plan (all ee pre-tax $, no employer $) would this be considered a welfare benefit that would need a 5500 filing? Or would this fall under an exemption from filing with the 125 plan?

I have been told by an isurance company that "voluntary" benefits under a 125 are exempt.

Thank you.

We have a profit sharing client that utlizes a non-uniform allocation method and is thus cross-tested. A large bundled provider is telling the client that the non-discrimination testing only has to be run every three years( at a substantial cost savings to the client). Is anyone out there only testing every three years? Any input appreciated