Hypothetical situation; looking over those 4972 issues, those taxes on nondeductible contributions to qualified employer plans, I was wondering if accrued salaries can allow one to avoid paying a 4972 charge?

The situation is this; the compensation listed on the 941 quarterly return records for the 415 limitation year only amount to a figure that cannot accomodate the contribution made (i.e. the compensation is not four fold or more of the contribution). Does accrued salary help, even if it was not actually paid?

Hypothetical situation: Is is still a brother-sister controlled group if the same people own both companies, with substantially similar ownership shares in both cases, but there are no common employees in the two companies?

We have a missing participant and an invalid social security number. The participant was apparently in the country illegally. Although "illegal", he was entitled to participate and accrue a benefit. I don't see any alternative other than to treat the participant as a missing participant. That doesn't do much good when you don't have a valid SSN. So do we just maintain the account indefinitely? How would we ever be able to make a distribution without a SSN? I believe all of the distribution options available to a DC plan on termination would require a SSN (e.g., rollover IRA, state unclaimed property etc...).

What do we do?

We paid a lump sum from our DB plan to a new 2007 retiree via a direct rollover to the participant's IRA. Do we still have to send the participant a 1099-R?

We have a 1-man plan (owner is the only employee). Are we required to provide the PPA quarterly benefit statement / notice to him, or is there an exception since it is a one-participant plan?

Thanks for any input!

I have a potential prospect (yes, potential prospect, not potential client) that I've just been made aware of through a referral source. The potential prospect is referring to a good portion of his staff as temporary leased employees.

Anybody have a good place to look at that clearly helps them understand the difference between the two?

I guess a question I could ask is -- "Do new employees go to the Agency first or to them first and then sent to the Agency?"

Thanks. I know I should know the answer.

Christopher

A company sposors a Plan and two other related companies have adopted the Plan for the benefit of their eligible employees.

If none of the companies are considered a "Control Group", can I ADP / ACP test each company seperately?

If two of the companies are considered a "Control Group", do I need to ADP / ACP test these companies together?

Thank you!

I've seen discussions about the changes to Schedule C for more detailed reporting of all fees (income) by providers but am unclear if these changes will be incorporated into the 5500 for plan years starting in 2008 or 2009. Does anyone have that answer for sure? Thanks

We are following the correction method allowed in EPCRS for the exclusion of an eligible employee. What is not addressed in EPCRS is whether you include the excluded employee in the ADP test. My basic question is –

1. Do you take the eligible employee out of the test completely?

2. Put the participant in the test with no contributions (before you calulate the NHCE ADP).?

Any thoughts would be greatly appreciated. My guess is that the answer is in a previous post but I was unable to locate one.

We are correcting some missed minimum distributions for a DB plan and sending in the VCP. The instructions indicate to make missed payments with an additional payment for "loss of use" of the money. Has anyone seen guidance for DB plans on what rate to use in this situation? Is it the plan stated actuarial equivalence, the trust asset rate, or maybe some other "reasonable" fixed income index? Is anyone familiar with an internal IRS document that may shed some light?

Thank you for any input!

If I have a failed ADP Test and I rechacterize an excess contribution as a catch-up deferral do I forfeit the related Match?

Sal Tripodi's ERISA outline seems to indicate that forfeiture is not "required." Who makes that call? I am using a Corbel Volume Submitter and the definition of Excess Contributions does not mention this. The document does state that Matching contrbution that relate to excess contributions shall be forfeited.

Any insight would be greatly appreciated.

When small DB plans (1 person plans, or a person and spouse) are preparing to go through the termination process, is it necessary to file all of the standard termination forms (5310, 6088, etc.), or is it acceptable just to file the 5500 and mark that it is the final filing for the plan?

Way back in the day, we had the worksheets from Mercer-Meidinger to guide us in the preparation of the FAS 87/88 calculations. Anyone know of any updated worksheets reflecting the FAS 158 changes?

I am so confused: Partnership maintains a 401(k) plan. The partners make 401(k) contributions, receive a matching contribution, and a profit-sharing contribution. There are also non-partner employees in the plan. The non-partners make 401(k) deferrals, receive a matching contribution, and receive a profit sharing plan. It came to light that non-partners may be funding their own profit sharing contribution. In other words, nonpartner was told that he would make $50,000 a year in compensation. But that $2,500 would come out immediately and placed in his profit sharing contribution account. His compensation will then be $50,000-$2,500. And, from that he can elect to make 401(k) deferrals if he wished.

This has to be wrong, right?

Also, can this scenario work for partners: partner is told that he will make $100,000 per year, but that $X will come out and he will only see $100,000 - $X in his paychecks. ??

I am confused so any help would be greatly appreciated.

thank you!!

1. I have a client who had a divorce decree in 2004 and was awarded $301 in his retirement pay (no specific order to the U.S. govt was made)

2. Dude hasn't paid since then. So she wants to garnish his military pay (he retired from the Navy and had 4 TODs in Vietnam)

3. There is no QDRO needed, just the order with some requisite facts that the military pension division (DFAS) requires.

Q. Can this be done ex parte?

Q. Defendant's former counsel is no longer in the private sector - serve it just on defendant?

As far as the survivor annuity, I presume that the wife doesn't have a right to it any more, as likely the service member has named another survivor beneficiary.

Anyone with some knowledge of military pensions -- if you could provide some input, that would be really appreciated. Thank you.

We just discovered that several participant loans were processed from our 401(k) plan using prime rate. The Plan says prime plus 1%. Is this an operational error that could be filed with the IRS under the VCP? How do we fix past loans vs. currently outstanding loans?

We have a retirement plan that allows participants to take a maximum of two hardship withdrawals. With news of the ecnonomy getting worse, there is some pressure to amend the plan and allow for three hardship withdrawals. I haven't seen anything which says there is a limit to number of hardship withdrawals. Anyone care to weigh in?

Valuation results at 1/1/08:

Non-collectively bargained plan

COB =1.6M

FT = 7.9M

TNC = 0.6M

FT shortfall amortization=0.4M

AVA = 6.0M

AFTP = 55.3%

No annuity purchases last 2 years

No UCEB

No pending amendments to increase benefits

Plan doesn't pay lump sums

Can the sponsor simply elect to burn enough of the COB to raise AFTAP to 60% and avoid the freeze of accruals? Is that it? Plus paying the TNC + amortization.

Am I even close on this?

My understanding of the upper cap on the maximum deductible limit is the greater of:

Funding Target (representing the BOY accrued benefit valued using the 430 assumptions), plus

Target Normal Cost (representing amount of benefit accruing during the year using 430 assumptions), plus

the "Cushion Amount", equal to 50% of Funding Target plus amount of increase in Funding Target if calculated using projected, rather than current, average salary; all reduced by fair value of assets, and

the 430 minimum deductible contribution.

Am I correct that if I have a new plan in 2008 w/ no past service benefit, that the minimum and maximum would be identical (since cushion amount does not reference the benefit accruing during the year).

This seems a little anomolous to me. What if I had a benefit formula wherein I had a past service benefit equal to 1/10th of the 415 limit which immediately credits on effective date. So Funding Target equals 1/10th of limit, Target Normal Cost is $0. So in effect I could have a maximum deductible contribution equal to 150% of the Funding Target. Contrast this with a benefit that just provides 1/10th of 415 limit during 1st year. Now my maximum deductible is just the Target Normal Cost (which equals the Funding Target). Do I have this straight?

Have seen the recent 430 proposed regs released on 12/31/2007, but don't see anything out yet on 404 based on the IRS PPA website dealing with the 404 calc (other than RR 2007-67). Anyone else know of guidance on the max deductible contribution in the works?

My understanding of Roth IRA's is as follows:

1. A husband and wife can each contribute up to $4000 per year (for a total of $8000) to a Roth IRA.

2. The contributions (but not the earnings) can be withdrawn at any time for any reason without any penalty.

3. We have until April 15, 2008 to make contributions for 2007.

Is this accurate? Also:

4. Can a husband and wife have a joint account? If so can they combine the accounts that they started before they were married?

5. How complicated is it to withdraw the contributions? Is it possible to keep some of the contributions in a standard savings account at a bank to allow easy access? My husband and I would like to max out our contributions for 2007 but doing so will deplete all of our savings leaving us with nothing to fall back on in case of an emergency so we want to make sure we'd be able to get the money back out quickly and without paying a penatly if we needed it.

6. Can you contribute to both a 401(k) plan through your employer and a Roth IRA?

Thanks in advance for your help.