I'm trying to get a handle on what tack on amendments I need when I restate from Gust to EGTRRA.

I think Robert Richter in Chicago said the following were needed. Please correct me if I'm wrong on the list.

415

PPA '06

402(g) Gap period

Heart

There are some provisions in the checklist that seems to deal with 415 and PPA.

Are these sufficient or do we need the tack on amendment?

If we need a tack on amendment, are you using the old ones we received years ago?

It is my understanding that if a taxpayer adopts the model rabbi trust and wants to obtain a ruling on the tax consequences of the underlying nonqualified deferred compensation plan, then the taxpayer must follow the guidelines of Rev Proc 92-65 which require, among other things, that the trustee be an independent third party that may be granted corporate trustee powers under state law, such as a bank trust department.

Is there any other rule or requirement out there regarding who can or can not serve as Trustee of such a trust?

What has people's experience been as to who is actually serving as trustee of rabbi trusts? I am particularly curious as to small employers where there are only one or two participants in the deferred comp plan.

A client has informed me that their 2006 match contributions were not deposited timely. The match for the employees (plus earnings) was finally deposited in April, 2008, while the match for the owner and his wife still have not been deposited. It is my understanding that all deferrals are deposited every pay period.

Questions:

1. What is the penalty for late deposit of match contributions to a SIMPLE IRA?

2. Does the 2006 corporate tax return need to be amended to remove the deduction for the employer match?

3. Can match contributions for prior years be deducted on the 2008 corporate tax return?

4. Does the client still have a SIMPLE IRA plan?

Thanks!

We are converting a plan that will map all participants to Target Retirement Funds (QDIA). We are providing a 30 day window to allow participants to choose a different allocation if they would like to. This "window" will close 2 weeks prior to the date assets are received and invested.

The plan also has automatic enrollment.

I have two questions:

1. Will closing the "window" two weeks prior to assets being mapped to the Target Retirement Fund still qualify the plan for 404 © protection.

2. If someone is automatically enrolled in the plan at the prior recordkeeper during the 30 day window (meaning this person will not be on our companies systems). How does the 404 © protection apply since these individuals may not have a full 30 days depending on when they are automatically enrolled at the prior recordkeeper I'd like to know what the options are for this scenario? Will a communication to all individuals who are to become eligible during this time outlining the process suffice or are there special issues that may need to be considered around this?

I am trying to determine if a first year 401k plan requires an audit. The plan has an effective date of 1/1/07 but was not adopted/executed until 7/9/07. I know you would normally determine if a plan needs an audit based on the number of participants at the beginning of the plan year but in the initial year is the beginning of the plan year the effective date or is it the date that the plan really began operating?

This PS-only plan has a trustee-directed pooled account and trustee-directed individual accounts that are updated as if they were truly daily (up until last week it was fully pooled trustee-directed). The participants are unaware that the accounts are split like this; they only get an annual statement that gives them their total balance as of the anniversary date.

Leaving aside how ridiculous this whole set-up is...

The plan's written document says that distributions are made as soon as adminstratively feasible after the anniversary date, but in practice they've paid out most of the participant's balance right after DOT (usually ~75%) so the participants didn't whine at them and then the rest after the annual valuation was complete. Now with this new set up, we're looking to make the document/SPD match what they do (and they're willing to change what they do a little to work with the document, how nice). They also want all associated distribution fees to be paid by the participant (since this is new, I know I've got to provide some kind of disclosure to the participants).

So here are my problems:

1. I believe I need to change the document to allow for certain assets to be valued daily (as opposed to all annual), and then I can make the distribution date to be as soon as feasible after the valuation date - this allows the individual account portion to be paid right after termination, which is sort of what they've been doing (the individual accounts are about 2/3 of the total account balance). If this is "material" enough to warrant an SMM, what would it say? The whole idea in the client's mind is that since the participant's don't control 'their' accounts, they shouldn't even know about them, but wouldn't anything in say in the SMM kind of tip them off that something was up?

2. I'm going to end up with two distributions for each person: one from the individual account in the year after they terminate, and one from the pooled account within a month after termination. That means two sets of distribution fees (since there will be separate 1099-R's). Is that unreasonable? Luckily, the plan has a YOS/last day requirement for a contribution and passes 410(b) easily, so a third distribution is extremely unlikely.

Thanks for your assistance.

This may be a familiar tune -- but I have not heard it before. Employer is an electric shop and has mainly union employees. The owner and his brother have the option of electing to receive union pension benefits but their pay and other issues are otherwise not subject to CBA. (I am told they have this election because they don't work with tools). All other employees are definitely union and have no options.

The owner would like to elect out of union benefits and adopt a 401(k). The brother, who is not highly compensated (no ownership and lower pay) may or may not want to be part of the plan. My problem hinges on not being sure whether the brother is considered a union employee subject to CBA and so can be excluded. If merely opting into the union benefits makes him union then would opting out of them make him not union? Or is he never considered to be union and is merely a person who is allowed to "buy" (or have his employer buy) benefits under the union plan.?

Worse possibility -- are both the owner and his brother considered union because they have the option to elect the union negotiated plan? If so, can I cover some, but not all of the union employees of an employer under a non-union plan? Would I then have to test coverage including all union employees?

I would appreciate any information from people who may have encountered this situation. As a side question -- is this a common scenario?

thanks to any and all.

Sheila

A 403(b) plan provides for salary deferral, after-tax voluntary, and matching contributions. In a 401(k), the after-tax and match are subject to the ACP test. Are after tax also subject to the ACP in a 403(b)? Since salary deferrals in a 403(b) are not subject to the ACP test, I thought there might be a way to not test the after-tax voluntary.

Hello group, I've got an employer with 20-25 ees working in Iraq on 1 yr assignments. These ees work in secure base and are mostly doing IT work, so there's no signifcant risk.

Nonetheless, standard carriers are not willing to write the group life/ad&d business. I received a quote from a Lloyd's of London affiliate, but they were wanting $15K per person annually for a $100K AD&D policy. That's a bit steep.

Any other suggestions?

Thanks!

Since preparers of 5500's & 5330's may now be subject to tax return preparer penalties, does anyone have any thoughts about potential preparer liability for understating the amount of late 401(k) deposits? For instance, if the preparer is not counting deposits late that were remitted within 20 days of the payroll date, but based on guidance we know that generally deposits should be remitted within 7 days or sooner, is their potential preparer liability?

Company has a nonqualified DB plan. Company is thinking of converting to a nonqualified DC plan by treating the lump sum equivalent as of 12/31/2008 as the opening balance for the DC plan. Distribution elections will be solicited and will be effective 1/1/2009. No one sees any problem with this under transition guidance (in some way, conversion is similar to changing the investment options).

However, the company asked whether they can solicit elections on whether the participant wishes to have their plan moved from the DB to the DC? As an alternative, the company wants to know whether they can mandate this only for those currently under a specified age. I can't figure out any way to accelerate distributions to 2008, but something about either option bothers me.

Any thoughts?

I am with an on-line TPA and we are reviewing our security policies and practises. I am interested in identifying a source of information that provides industry standards or best practices regarding things such as: how to best keep personal private information (SSN's, ...) private, what types of standard account verification practices are used for call center personnel to identify/verify callers, ...

I appreciate any assistance you can provide.

We have begun offering retired employees the option to continue the with the same group health insurance they had as active employees under a pre-65 retiree health insurance plan. Can this be reported as one plan on the 5500 or does it have to be identified as two separate plans? If so, how do we identify the retiree plan? Thanks for any guidance.

I have a client who is a partnership with a small wrinkle, one of the partners only takes W-2 income, no K-1. The other 4 partners do take K-1.

Is the one partner (who owns 30% of the partnership by the way), considered to be NOT Self Employed as he has no earned income to be reported?

Thanks for any guidance!

A participant who was zero percent vested in an employer match terminated and was paid out of a 401(k) plan. The match portion was forfeited. He has since rehired in the same plan year. Can he have his match restated?

I received a note form John Hancock reminding me that one of my plans has 16 Participants who have never filled out enrollment forms. Obviously they are not deferring, they are just getting the non elective contributions.

They have not chosen investments so they are in the default investment. They have not chosen beneficiaries so the document will control that

Some of these people have been given enrollment packets several times and they never fill them out.

Is there any legal requirement for how often we need to remind them to enroll?

If no legal requirement, what do other firms do as a standard kind of practice?

I understand that there is a "grace period" when you can ignore the merger for coverage.

Would that also apply for the definition of Highly Compensated and Key Employees?

Thanks for any opinions

I have a now-liquidated terminated DB plan that reverted about $40,000 to the employer. A final SFAS 87/88/158 report is now being requested of me and I am looking for some guidance on reflecting the revesion in the SFAS work.

Anyone know of any links here or on the web that might be of help? Or have any quickie comments?

Thanks.

Is it permissable to use a modified compensation definition for this test? Can I reduce compensation for 125 & 401(k) deferrals?

My client, the plan sponsor, misunderstood the plan audit requirements and did not obtain an audit. The DOL caught them.

We sent a statement of reasonable cause taking some of the blame and laying some on the TPA for failing to inform us that we had gone over the 120 participant limit.

Now the DOL has rejected our statement and demands the $75k. (Let me add that we have still not filed the completed Form 5500 because the auditor cannot get the records it needs to finish the audit. My client cannot find them and the former TPAs are not particularly responsive. Penalties continue to accrue.)

My question is this: Is there any point in appealing this decision to the Office of Administrative Law Judges?

I have no experience with this process.

I understand the plan sponsor's obligation to know the rules and the reporting requirements, but I am very sympathetic to the argument that the TPA, which knows the rules and how many participants the plan has, should do a better job of alerting its clients when the audit requirement is first triggered. I know that in the boilerplate sent to clients, notice on the audit is provided, but that seems woefully inadequate to me, given the penalties that accrue from the failure to file the audit.

Any help would be greatly appreciated.