A plan sponsor does not deposit several payrolls of employee deferrals in the 2005 plan year. The error is not found until the beginning of 2006. The Plan Sponsor corrects the late deferrals using the DOL online calculator and is also submitting the VFC forms outlining the correction and well as paying the excise tax on form 5330.

In addition, however, the plan called for safe harbor match contributions to be made on a payroll-by-payroll basis. The safe harbor match for the payrolls in which the deferrals were not deposited was also not deposited. It is my understanding that the safe harbor matching contributions are also late, as they were not deposited by the end of the quarter following the quarter they were allocated.

Do the late safe harbor matching contributions also consititute a prohibited transaction requiring the payment of excise taxes (ie, the match was supposed to be made as of a certain date and was not and therefore becomes a loan to the company)? If yes, does the late match amount get entered on Line 4d of Schedule H and also requires the completion of Schedule G?

Thanks for any guidance.

Is there a statute of limitations applicable to QDROs? I have a client that sponsors a DB plan (and has since the 1970s). In 1989, a participant and his spouse got divorced. The settlement agreement incorporates terms that qualify as a QDRO. The participant later remarried. About 4 years ago, the participant retired and elected a joint and 66-2/3% survivor annuity naming his second wife as the beneficiary. Last week my client received a letter from the participant's first wife along with a copy of the settlement agreement and QDRO dating back to 1989. The first wife now wants part of the participant's benefit.

This is a real mess because the terms of the QDRO anticipate using a separate interest approach, but now that the participant is in pay status, it is impossible to do that (or so it seems to me).

Roughly 16 years have passed between the date of the divorce and presentation of the QDRO to my client's plan. During that 16 years, the participant has remarried and retired. In fact, for the past 4 years the participant has been receiving payments from the plan. Does a QDRO ever become "stale"? Put differently, is there a statute of limitations that runs with respect to QDROs?

One of my colleagues says that this is akin to a claim for benefits and that such a claim is generally subject to state statutes of limitation relating to contract actions (i.e., 6 to 8 years probably). Another colleague tells me that so long as the state court that originally issued the order retained jurisdiction over the order, there really isn't any statute of limitations.

Thanks, in advance, for your thoughts.

We have a 401(k) PSP where each participant has their own earmarked account. One of the participants, who happens to be a plan trustee, wants to invest about 5% of his existing account in silver boullions. Is this a prohibited transaction?

The asset will be purchased with cash from his existing plan account, and the asset will be registered correctly under the name of the trust. The asset will be appraised annually, and will be held in a safe deposit box.

Any input would be greatly appreciated! Thanks ;-)

Plan sponsor business closed but owner wants to keep plan in existance. No new contributions to the plan. Is this allowed?

401(k) plan - no match just deferrals, implementing a negative election - 3%. Using top 20% and excluding "otherwise excludable" from ADP test. HCE's do not want to limit their deferrals, a match contribution is not an option and neither is a safe harbor 401k plan.

Anyone have any suggestions or a different 401k plan design that might work?

Thanks.

We have a 401(k) PSP where each participant has their own earmarked account. One of the participants, who happens to be a plan trustee, wants to invest about 5% of his account in silver boullions. Is this a prohibited transaction?

The asset will be purchased with cash from his existing plan account, and the asset will be registered correctly under the name of the trust. The asset will be appraised annually, and will be held in a safe deposit box.

Any input would be greatly appreciated! Thanks ;-)

Is it OK to take the distribution fee from the participants acocunt before paying them out or is that an expense the Plan should have to pay? Does anyone else do this?

Would coverage testing ever apply to forfeitures that are reallocated?

I know there are prohibited transactions for IRA's but are there any on a ROTH? I would like to purchase an ajoining lot for investment.

Thanks

If a small plan freeze is effective 7/1/05 with 204h notice handed out 6/15/05, how may this be reflected for an end of year 12/31/05 valuation? Must you use the proration method by running one val with frozen benefits and the other val run as if no freeze was made, and prorate the two costs? Are you allowed to just run the val with the frozen benefits? Are you allowed to just run the val as if no freeze was made.

Somebody referred me to rev ruling 77-2 but that starts off by saying...

Rev. Rul. 77-2

The purpose of this Revenue Ruling is to provide guidelines for determining the charges and credits to be made to the funding standard account to reflect changes in benefits that become effective after the valuation date.

....which implies to me that 77-2 only offers guidlines for changes effective AFTER the valuation date and not changes made BEFORE the vauation date.

As you may know, when a participant in a medical plan (including a health FSA) goes on a military leave, s/he has the right to continue coverage under USERRA for up to 24 months on a COBRA-like basis. Under COBRA, there is a special exception on the duration of COBRA coverage for health FSAs which satisfy certain rules, including that the health FSA meets a HIPAA exemption (which would usually be met if the FSA contains only employee salary reduction contributions) and depending on the balance in the FSA and the amount remaining to be contributed for the remainder of the year at the time of the qualifying event. The upshot of this exemption is that the health FSA is either not subject to COBRA continuation, only subject to COBRA continuation until the end of the calendar year of the qualifying event or also subject to COBRA for the calendar year following the calendar year of the qualifying event. I had hoped that the final USERRA regulations would provide more information on the duration of the continuation period as applied to health FSAs and whether the employer would tie that duration in to the IRS COBRA regulations. That being said, does anyone have any thoughts on how long health FSA coverage should be provided with respect to an employee going on military leave in order to comply with USERRA?

If you take a distribution from your IRA, and before the 60 days you deposit the funds back in, but the check bounces and you don't find out until after the 60 days are over, is there any way to correct it besides a private letter ruling?

Is anyone willing to share an example of their disclaimer that they may use on a proposal/illustration of plan designs to a prospect?

Does anyone have an opinion on whether a code value is used to denote use of a Volume Submitter Document under Line 8a of Form 5500?

A company had a simple IRA in 2004. They closed the simple IRA and started a safe harbor 401(k) plan in 2005. They owed a contribution to the simple IRA for the 2004 year but instead of depositing the funds into the simple IRA they sent the money into the 401(k) plan and earmarked it as a safe harbor contribuiton.

We determined at a later date - 2006 when doing compliance testing on the plan that the funds should have gone to the simple IRA and not the safe harbor 401(k) plan. The simple IRA is closed and will no longer accept the deposit.

What options does the client have if any to do with the funds? Can they keep it in the 401(k) plan?

Instead of paying premiums directly to the carrier, the sponsor of a 412i plan makes contributions to an investment account held in the name of the plan, from which he then disburses the premium payments. The deposits are made periodically in varying amounts, and then the appropriate premium amount is disbursed when due. The insurance guy who set this up says the account is -o- at the end of the year, so it's OK. I don't see how. Anyone agree?

For anyone out there who has implemented autoenrollment , do you have any recommedations?

Pros? Cons? Lesson learned?

What was your avergae time to roll out? thanks

I know this is a Relius Admin message board...

Has anyone submitted an electronic filing (EFAST)? via modem...

The connection type that Relius Gov't forms only offeres is thru a Virtual Private Network (VPN) and the IRS is not accepting it this way until next year.

I cannot get Relius Govt Forms to recognize the previous setup I had for dialing into EFAST.

Any users with a successful submission?

Jim

I have a client that wants to sponsor a multiple employer plan that allows each adopting employer to select various plan design options. I am having trouble finding a document vendor that sells this type of volume submitter/IDP document. Does anyone know of a vendor that sells this?

Hi! I'm working for a small Pension Company and would like to know what the average pay is? I have 4-5 years of experience. I just completed PA-1, Pa-2 and will be taking PA-3 this month. I plan to get my QKA designation so I'll be taking DC-1 and DC-2 as well. I'm having second thoughts about staying in this field because of the pay and feel that there is no room for advancement. Does anyone feel the same way? Any suggestions or feedback would be appreciated.