a db plan which is aggregated with a 401(k) PS Plan for 410(b) and 401(a) testing doesn't have to pass the combined gateway right? Only if the plan was cb in design would a plan have to pass the combined gateway? therefore, since db plan is traditional, we just have to pass the gateway in the ps plan right?

is anyone aware of whether this requirement can be waived in the event of the insolvency of the plan sponsor?

On 2/27/06, a participant in ABC Corp's 401(k) plan executed a beneficiary designation form naming his four adult children from a previous marrage as his beneficiaries. On 2/28/06, Company A sent him a confirmation of the beneficiary designation showing his children as the beneficiaries. His current wife writes on the confirmation "I consent to the above" and signs and dates the form. The participant dies on 1/30/08. Clearly, this was not a valid waiver, and the plan administrator, citing the invalid spousal consent, has indicated the account balance belongs to the widow, not the children. However, the widow does not want the assets, wishing to honor her husband's designation. (I know, this is a rare event, but it happens sometimes!) Anyway, she doesn't need the money.

Question: Is there a way to validate the beneficiary designation? The widow is willing to sign an affidavit to the effect that she did consent and waived her rights to the plan assets. Any ideas will be appreciated. Thanks.

Suppose a calender year corporation wants to establish a DB plan that has a June 30 plan year end.

They want a short first year to run 1-1-2008 to 6-30-2008. Thereafter, the plan year starts July 1. Beginning of year valuation.

Since their fiscal year is calendar year, can they deduct the January 1, 2008 (half-year prorated) funding requirements AND their July 1, 2008 funding requirement on their 2008 tax return? (let's assume all contributions are made during 2008 to cover the funding requirements)

Employer pays 100% of the cost of single employee health coverage. It is acquiring a division with some employees who are paid by commission and would like to pay only 50% of the cost of single coverage for the commissioned employees. Employees pay their portion via a 125 plan, and all employees are eligible for the 125 plan.

§1.125-7 of the proposed regulations states that "employer contribuitions" cannot discriminate in favor of Highly Compensated Participants (HCPs), but also requires only that "similarly situated" employees be given the same benefit availability and elections. §1.125-7(e)(2) offers up geographic differences and family vs single coverage as examples of "similarly situated" employees.

HCPs represent 13% of the current population (excluding the commissioned employees). HCPs represent 12% of the commission-paid workforce (about the same as the overall population).

Could payroll classification (e.g. status as a commissioned employee) be a basis for deeming participants to be "similarly situated" such that it would be acceptable for the employer to pay a different percentage of the cost for commissioned employees as opposed to other employees, so long as the HCPs and NHCPs within each group of "similarly situated" employees receive the same employer contributions? Would there be a requirement that those deemed to be similarly situated not have vastly different HCP percentages? (Similar to the eligiblity test.)

Thanks in advance for any thoughts.

As a correction under VCP: Say you missed making twenty years of minimum distributions and you were going to make a single lump sum payment, with interest (to make the ppt. whole) to bring the plan forward. So your total back distributions are $20k, and you have interest of $7k for a total payment of $27k.

Is the $7k portion of the distribution rollable or does it inherit the charactaristics of the 401(a)(9) distribution?

Plan Sponser wants to establish a new 403b plan...

In designing the distribution options... Does the option to payout as annuity HAVE TO be an option or could the plan simply offer Lump Sum and Partial withdrawals only? If an annuity does need to be offered as a choice, does there HAVE TO be a J&S Annuity?

Thanks

Rev Proc 2008-6, Section 6.05, states that all changes made to the most recently approved version of the plan must be redlined or highlighted. Failure to do so will result in the return of the application. This is effective for Cycle C plans that file a 5300.

It will be hard enough doing this when our firm has maintained the document over the years, but redlining all changes to a takeover plan will be extremely burdensome.

Are there any rumblings out there that this might be reversed? How are others handling this?

And I wonder why my hair has turned gray since I've been in the pension area.

Calendar Year Corbel standardized prototype Profit Sharing Plan that uses annual valuation on 12/31:

sponsor wants to amend plan to add a safe harbor 401(k) provision effective June 1, 2008

Sponsor also wants to move the rank and file participant's current Profit Sharing account balances from pooled account, which consists of four investment companies, to participant directed accounts using Ohio National's product. He wants to keep his, and his wife's account blances in one of the exhisting investment accounts.

My question is...if the plan document says we use a valuation date of 12/31, and the assets don't get transferred to the directed accounts until sometime in May...how is it done if the asset value is either more or less than it was on 12/31?

I just did the trust accounting from January 2008 though March 2008, and there was a $17,000 loss. How the heck do we allocate 12/31 balances into a new investment for the participants when there isn't enough money in the trust to do so?

Can this even be done this way? I mean, wouldn't it be discriminatory to let the owner employee keep his money in a brokerage account while everyone else has to move their money out? Wouldn't we have to offer a brokerage account to the participants too?

Any guidance on this would be so appreciated.

Thank you.

Employer has sales people and other employees who on occasion receive non-cash awards for good performance, or sometimes at random. For example, a paid trip to Hawaii for the top performer that year. Employer would prefer not to have to withhold 401(k) deferrals on these non-cash awards, which can be of significant value.

However, if the employer excludes them from the definition of compensation, it appears that the plan definition would not meet a safe harbor definition under §415.

If the definition of compensation excludes non-cash awards and prizes, would the definition have to be tested for discrimination? If so, how would that be done?

Thanks in advance for any thoughts on this.

Our custodian holds assets for a plan in which we are TPA. We have decided to terminate the relationship. how do we transfer the assets of the plan if the plan sponsor will not take affirmative action and hire someone else?

I cannot quite figure out why the various % ranges are mentioned in h(2)(i) when "... less than 90% .." would have sufficed? Also, why was "at least 70% but less than 80%" range left out?

What am I missing?

Plan is Safe Harbor 401(k) Plan that only does Safe Harbor Contributions. When computed, Plan does have Top Heavy Ratio of over 60%. Since only Safe Harbor Contributions are used, Top Heavy would not normally apply. However, a person terminates and forfeits profit sharing monies that need to be reallocated under profit sharing allocation formula. (They did use profit sharing allocations in prior years.) This forfeiture reallocation would provide everyone employed on last day with (equally) a little under 1% of pay. Does the employer need to kick in monies necessary to give everyone 3% under profit sharing, since Keys are getting over 3% from Deferrals and Safe Harbor Match? (Not all people are deferring so Matching can't alone satisfy the Minimum.)

Okay. Maybe this is a stupid question, but I've never come across this. DRO does not have correct Plan Name. It has ABC Retirement Savings Plan and the name of Plan is ABC 401k Plan. I know what plan they are referring to because it is the only Plan that participant is in (there is no Plan called Retirement Savings Plan). Do I have to reject because of this? I've looked and I can't find anything other than the Plan has to be identified.

Also, DRO only has circuit judge signature, but no circuit clerk stamps and signatures that are normally on the forms that we receive or any other court "stamps." Any comments on that? The circuit clerk stamps normally state that the records are on file with their office.

Have a client who was to do Safe Harbor non-elective contribution for 12/31/2006. Form 5500 filed for 2006 included this contribution. Turns out client never made the contribution. What are the appropriate steps to fix this? I assume they should make the contribution immediately and will not be able to claim the deduction on their 2006 tax return. Do they need to make up for lost interest? Should we amend 5500?

Hi, I have a client with a 2002 restatement and 9 amendments. They are a Cycle E filer. It has been suggested that we do a Plan composite and have the client sign the composite as a "restatement"? Will this cause any issues? Cycle E filing issues?

I assume that we can file the 2002 Plan (w/FDL), the 2008 "restatement, the 2011 restatement and all amendment from 2002. However, would the IRS consider this 2 restatements? I assume that the 2008 restatement was really an Amendment? An I wrong?

Begining with Cycle C, all submission must include a redline copy showing all changes. I wonder if this would cause additional issues since we would have to provide possibly 2 redlines (2002 to 2008 and 2008 to 2011).

Any thoughts would be appreciated!

Plan begins 1-1-03

one participant age 45,nra 55

bnft formula is 10% of fas accrued over yopart

at 50,his CURRENT 3 yr avg salary is 4k/mo.

bnft formula is changed and new participant enters plan.

new formula is :100% of accrued bnft @1-1-08,plus 2% times all yop.

Q: if his FINAL avg salary at 55 is 8k/month,is his accrued bnft at 1-1-08

50%of 8k?

:

I am preparing the 5307 application for an EGTRRA determination letter for a plan I restated last week. The original effective date of the plan is 5/1/97, the first plan year ending 4/30/98. We applied for received a GUST II letter in 2002. Due to the small employer exception, we did not pay a user fee to the IRS.

In re-reading EGTRRA sec 620, it would appear that we may qualify once again for the exemption from the user fee if our EGTRRA application is made before the end of the RAP that begins before the end of the end of the 5th year of the plan. The plan's 5th year ended on 4/30/2003. Thus, if the EGTRRA RAP began on or before 4/30/2003, we'd be exempt once again from the user fee.

I am assuming that the EGTRRA RAP began 1/1/2002, as that is the date some of the EGTRRA provisions took effect. Does anyone know of an IRS pronouncement that specifies the beginning date of the EGTRRA RAP?

Doc A set up PS plan in 1990, took $50k loan in 1999, repaid on schedule for about a year and a half. Doc A's PS Plan not funded since 1999.

Doc B comes along with his own PA. All employees now employed with Third PA. Doc A only employee of original PA. Doc B only employee of Doc B PA. I have notes in file that Doc A was advised by me and CPA that all employees should be covered by original plan or similar plan. Both Docs agree no new plan, no further contributions will ever be made.

Plan is audited. Loan issue is caught. Doc A repays loan with penalties and interest.

Auditor now wants census on Third PA. CPA says auditor is not entitled to that information. Is CPA right?

Thanks in advance for your help on this.

Monica