Interested in any feedback on Gary's calculators added at http://benefitslink.com/boards/index.php?s...mp;#entry153309

Has anyone ever filed a 5500 which discloses a funding deficiency without filing the 5330 and the 10% first tier tax at the same time (albeit to a different address)? If you have, what was the reponse of the IRS, and what was the timing of that response - that is:

- did the IRS ask for a 5330 and the 10% tax, or did they go right to the 100% tax?

- how quickly did the IRS respond after receiving the 5500?

- how much time did the IRS allow for you to respond?

- how long after the filing of a 5330 with the 10% tax before the IRS requested the second tier tax of 100% or proof that the funding deficiency was corrected?

I'm asking these questions because I have a client who works from project to project, and gets paid at the end of each project. This year he got caught short. I'm trying to buy him some time when he gets paid at the end of this year. Currently, my thinking is:

- file the 5500 on 10/15 without the 5330

- wait for the IRS to request the 5330 and the 10% tax (my concern is whether the IRS can skip the 10% tax and go straight to the 100% tax in this situation)

- file the 5330 with the 10% tax

- wait for the IRS to repsond with the next letter and hope that it arrives after 12/1/07 because the client will fund the plan by 12/31/07

Any thoughts or input would be most welcome.

Thank you.

There is a participant in a plan I am working on who has two separate allocation elections (one for a rollover balance and one for current deposits). The investment company directed the recordkeeper to change the lifestyle portfolios in all their plans. When the portfolios were changed, the recordkeeper re-balanced both the rollover account and the current account for the participant mentioned above. This was a problem because the participant had the rollover account invested entirely in cash. The transaction occurred during July and August leaving the participant with losses of close to $8,000 (at this point).

If the Investment Company or the recordkeeper restores the account, is there a problem with the $8,000 being deposited to the Plan.

Is there any Plan level reporting to be done regarding this (other than questions on annual reporting forms).

This is really scary stuff as far as I am concerned and I want to be sure we review all of the issues with the client.

Finally, I was curious about who might have the responsiblity for restoration; the RK or the investment company but when I asked this question under the recordkeeping topics, NOONE responded (although 84 members reviewed); I felt shunned. Was it intentional? Should I have not asked that question?

Well if anyone knows if the $8,000 deposit is a problem and whether other corective actions are necesary I really appreciate the help. If anyone knows who might be liable, the rk or the investment company, I appreciate the help but do not want to find myself in trouble for asking the wrong questions.

The Form 10 instructions say that plan under 500 lives that is not subject to a Notice to Participants for both the prior and current years is exempt from a Form 10 filing for a late quarterly.

The PBGC Notice cite is Section 4011 of ERISA which I believe is repealed effective 1/1/2007. It therefore appears to me that Form 10 is not required for late quarterlies for 2007 if a plan has less than 500 participants since there is no PBGC Notice requirement for 2007.

Agreed?

My ex-husband and I lived, married and divorced in California. We both now live in Australia (me for the past 10 years). The divorce was handled when we were both living in other countries and there was no official 'marital property agreement'. No argument about property or kids, and an unofficial trade-off for my retirement plans for his sale of the business. Ten years later I get notification that my ex is now going after my 3 plans with my employer in California. I receive in the mail (out of the blue) a copy of a "Notice of Appearance and Response of Employee Benefit Plan" from a QDRO consultants company employed by the employer, stating that the plans are incorrect but providing the correct way to apply. A copy has been sent to exhusbands attorney in California. This is my only asset and I am the sole carer for a disabled 20 year old son who will always live with me. I was counting on this for when I get too old to work, I am now 51. Is the plan now on notice and I cannot move it to Australia quick-smart? I am currently trying to get an attorney in California to help, but I would appreciate any advice from this forum. The plans were worth about 75,000 at the time of divorce and are now worth 140,000. Can he do this after 10 years? Can I move this to Australia? What can I tell the PA to allow me to move it? Help.

Can anyone direct me or advise me on this question?

I have a partnership with 2 partners - each owning 50% of the partnership although profits are not split in this manner. One partner of the partnership is the owner of a single member LLC with one employee at present - perhaps more in the future. Does the 401(k) plan of the partnership have to include any employees of the LLC? I can't seem to find a definitive answer because any reference to brother sister groups refer to corporations and I'm not sure that it applies to the partnership and/or the LLC.

Any guidance is greatly appreciated!

NQDC plan provides that executive is to be paid out in 3 annual installments starting shortly after 10/31/07. Plan also provides that company may accelerate payments and payout in lump sum. Company is actually going to payout executive in one lump sum payment prior to 1/1/08. Any need to comply with 409A?

I have a new client who was required to provide the 2006 PBGC Participant Notice, but whose previous service provider (insert large national firm here) neglected to tell them about the requirement. I spoke to the previous provider and they agreed that one should have been done. So, I have prepared the notice for the client and told them to issue it ASAP.

My question relates to the 2007 PBGC filing. As you know there is a question asking about the previous year's participant notice requirement. There are only 3 possible answers to the question. 1) Was not required to be issued, 2) Was issued on time and in accordance with all other applicable requirements, or 3) An explanation is provided here.

I plan on selecting Option 3 and providing an explanation, but I am wondering how the PBGC will react. I know there is a potential $1,100 per day fine, but I can't believe they would actually asses it. Has anyone ever selected Option 3? If so, how did the PBGC react?

A participant wants to terminate, get paid out her vested balance and the come back the following week as a part time employee. Quite obviously this participant wants access to her funds. While this does not seem like an option, review of the plan document does not specifically address such a situation. What is to prohibit such a distribution? She just shows up as a rehired participant with a distribution on the 2007 census.

I've been separated from my copies of SAS70 and SAS73. Don't remember how I got them in the first place.

Anyone have a link where I can get copies (free, of course).

The client failed to deposit non-elective contributions for the prior year by the their tax filing deadline of 09/15.

Can I rely on the 30-day period under 415© that it will not affect any non-discrimination issues for the current year?

Therefore, the timing of deposit for the prior-year contribution will only be a deduction issue.

Thank you.

What are the IRS reporting requirements for the following 2 plans:

Deferred Comp (from salary deferrals) - W-2 or 1099?

SERP - W-2 or 1099R?

Can an actuary or representative at the firm preparing the client's PBGC returns sign as the plan administrator?

The e filing allows for anyone to have the "permission" to serve and sign as plan administrator, so it seems to indicate that someone other than the actual plan administrator can sign the return as serving plan administrator.

Any thoughts on th is?

Thanks.

I have an ERISA 401(k) plan where all the employees have terminated employment and only the owner is left. Some of the terminated employees with account balances over $5,000 want to keep their money in the plan and the owner still wants to continue contributing.

Can an ERISA 401(k) plan still exist with only one employee who is the owner?

If not, must the plan be terminated?

If yes, can he still contribute? The plan has a discretionary match and profit shaing contribution, can the employer (himself) contribute those too?

Thanks.

Hello,

I am working on a 401(k) plan with approximately 50 accounts which are all individual annuities. Commissions are paid from each account; each person has a separate account number. Do I have to prepare a Schedule A for each person, or can I aggregate the totals on one form and list the account number as various.

Thanks for your help.

In Feb 2007 we issued a rollover distribution for a participant in a PS/401k plan after receiving her completed paperwork. The distribution included a 2006 Employer contribution which had not been funded yet.

Around Sept. 1 of this year, the corporation decided they would not be able to fund their 2006 Employer contribution. We amended all the reports. I contacted this participant to let her know she had received $400 too much in her rollover. Also I contacted the company this money was rolled over to and let them know what the situation was.

The participant called today and said she would not be returning the money from her IRA.

My question is how would the 1099-R be handled? Should there be a 1099-R for the eligible rollover amount using Code G. Would a second 1099-R be issued for the $400 as a taxable distribution to the participant?

I need to have my ducks in a row before I call the participant back. Thanks.

Employer A maintained a plan - number 001. Employer B maintained a plan - number 001.

Employers A acquires Employer B now a controlled group and both entities continue to maintain separate plans. What is the plan number for Employer B's plan? Still 001?

ESPP has two 6-month offering periods. Purchase date is last day of offering period.

If EE becomes eligible to participate in ESPP during the middle of the offering period, and we let him/her in, is there any potential violation of equal rights & privileges provision where the FMV of the stock is different on the first day of the offering period and the day that the mid-cycle entrant enters the plan?

We filed a 2006 5500EZ last year for what we thought was a 1 life owner-only plan. This year we discovered there was someone else in the plan in 2006 and that a 5500 should have been filed, not an EZ.

Is there any problem with just filing a 2006 5500 as an amended return? Willl there be any problems because the original was an EZ?

Thanks

We have a frozen DB plan. Employees in the plan prior to closure were allowed to stay in the plan. The present board is made up of 3 elected officials, 2 managers, 4 employees, 1 retiree and 1 member of the public. Over time, the number of active participants has shrunk (1600) and the number of retiree participants has grown (2600).

If you have a frozen plan have you modified the composition of your board to reflect the changing demographics of your participants? If so, how many retirees are on your Board of trustees?