Can anyone confirm whether we can use current 5500 forms (e.g., 2004) for past years delinquent filings (e.g., 2000) and just hand-correct the year (i.e., cross-out "2004" and write in "2000"). I've had someone tell me the IRS will accept this method, which would be great, but would appreciate it if anyone else has either had experience or at least heard that this approach will work.

2 separate questions here for the price of 1, but both are pretty straightforward. If an employer wants to terminate a target benefit plan and they are not planning on filing with the IRS for a determination letter, what is the timing on the notices to terminate (must distribute notice within 15, 30, 45 days)? Question #2 same as above, except it is a money purchase plan.

Thanks

I have a Maryland Bankers Association Bulletin that refers to Chapter 444, House Bill 147 of the 2005 Session of the Maryland General Assembly, which requires payouts of eligible rollover distributions from qualified retirement plans to withhold Maryland tax whenever federal tax is withheld....effective 7/1/05. I have found this Bill on the internet, and this is indeed what it seems to say.

However, I contacted John Hancock (formerly Manulife) where we have many Plans that are participant directed, and they claim that their compliance area says mandatory Maryland State withholding is not yet effective, and they will not be changing their distribution forms until it is effective.

Does anyone know whether this is effective 7/1/05?

Rather than amend the plan document to set a HCE Deferral Limit for catch-up contribution purposes, can it be done by a corporate resolution? Everything I read in the regs indicates that any limitation on deferrals by HCE's must be spelled out in the plan document.

What options are available to a M/P sponsor that failed to adopt 401(a)(9) Model Amendment by 12/31/03. Amendment has since been adopted. Go in under EPCRS as a "group" submission? What if there are fewer than 20 employers that adopted the M/P plan.

i dont see any reason why not but thought i would put this out there. approximately 10% of the participants did not receive top heavy mins for two plan years. dollar amounts are relatively small - 11,000 and 15,000 for each year respectively. i would like to self correct rather than use vcp. any thoughts.

Self correction (under Rev. Proc. 2003-44) is available only for Operational Failures. Operational failures are Qualification Failures arising solely from the failure to follow plan provisions. 403(b) plans are not subject to the requirement of a definite written program (although ERISA requires a written plan document for some 403(b) plans--this requirement is not applicable in this particular situation).

In the case of a qualified plan, it is generally easy to locate the "plan provisions" and also to determine whether or not a situation involves a "qualification failure". In the case of a 403(b) plan, or at least the one I have in mind, it seems much less clear. In my case, there is an SPD, no formal plan document, and the custodial agreement. The SPD says X, but the client has been doing Y. The custodial agreement is silent on the matter. The 403(b) plan can do X or Y without jeopardizing its "qualified status", i.e., without violating Section 403(b).

I am not sure what to do. Are the "plan provisions" referred to in the IRS self correction provisions contained in the SPD, the custodial agreement, the combined SPD/custodial agreement? Since the SPD is technically a summary of the plan, it makes logical sense that the SPD is not the plan. Also, since doing X or Y does not jeopardize the 403(b) plan's qualified status, is this truly a Qualification Failure?

Any thoughts would be helpful as I try to figure out what to do next. Thanks, in advance, for any help.

I'm attempting to complete the 2004 Schedule B for one of our clients, and I'm not sure what (if anything) I should show in the Accumulated Reconciliation Account (ARA).

The 2003 Schedule B reported the following:

line 9e = 100,000 (add'l interest charge on late quarterlies for the 2003 plan year)

line 9q(1) = 8,000,000 (ARA due to add'l funding charges)

line 9q(2) = 50,000 (ARA due to add'l interest charges)

line 9q(4) = $8,050,000 (total ARA)

The plan had an ERISA full funding credit of $4,000,000 for the 2004 plan year.

I think the balance in the ARA (line 9q(4) of 2003 Schedule B) gets eliminated because of the full fuding credit. Is that correct?

What do I do with line 9e from the 2003 Schedule B? Does this get reported on line 9q(2) of the 2004 Schedule B?

What should I report on lines 9q(1) and 9q(2) on the 2004 Schedule B?

PLEASE HELP!

How do you handle a terminated participant's forfeiture from the annuity? Usually there is a surrender charge, if the annuity is surrendered in the first "so-many" years, specified by the insurance company.

I have a 401(k) plan that provides for hardship distributions. They have a participant who wants a distribution which does not meet the safe harbor events test (i.e. it is not for payment of medical, educational expenses, payment of residence or to prevent foreclosure).

If they make the distribution and it is discovered that it does not meet the facts and circumstances test (for example, if the plan was audited) , what are the consequences?

A safe harbor plan is amended to include an early retirement window; wrt (a)(4) testing , is there anything that prohibits you from defining 2 component plans : (1)one that is safe harbor, includes participants not eligible for the window, and by design wouldn't require general testing and (2) another that includes only those eligible for the window and assuming the window is not safe harbor would require a general test ????

Also, the plan as amended for the window would have to pass coverage or 410(b) I assume ?? a component plan breakout wouldn't be available for coverage testing would it ??

I know this has been discussed before, but here goes.

Client thinks he's got an opportunity to buy some real estate on the cheap. Wants to buy it with plan money. Dad is Trustee and Son a participant. Wants to know if Plan can buy half and Son can buy half. Purchase would be from an unrelated third party.

Next comes the fun stuff. Dad has close to $2mm. If all goes well, he flips the property in a few years. Down the road, he's turned what could be a capital gain if bought outside the Plan, to ordinary income when RMDs begin. RMDs should put him in a pretty high bracket.

Son, buying outside the Plan, would be taxed at capital gains rate.

I've input Q's for males and females into a spreadsheet that calculates annuity purchase rates. My problem is that the males don't match up with the only printout of a table (6%) I have from an independent source.

Anyone willing to post a few monthly APRs from other sources? Something like:

Male, 5%, age 55

Female, 6.5%, age 60

In case you missed the header, I'm looking for 94 GAR sex distinct APRs.

Just a few will tell me if I'm on track or off base.

If I can verify my spreadsheet works, I'll make it available online.

Hello,

I understand that any Real Estate that my Roth IRA purchases can not be in my name or any family members.

But what if I sell a property to a 3rd party and then instruct my Roth IRA to purchase it from that third party, is this OK?

Are there any regulations that say how much you have to pay for the property? I mean, if the property is worth $500K and my Roth buys it for say $50K is that OK?

Does the property need to be out of my name for a specific period of time or just until is recorded in an other persons name?

How long does your Roth have to own the property? Can you instruct your Roth to sell the property one week after the transaction is complete? Can the prpperty be fliped in escrow?

Thank you,

FOR SOMEONE WHO HAS NO KNOWLEDGE OF HOW TO GO ABOUT BUYING A ROTH IRA, I'M TRYING TO FIND OUT WHERE AND HOW TO GO ABOUT DOING IT. I HAVE NO IDEA WHERE TO START EXCEPT BY JUST ASKING QUESTIONS. I AM LOOKING FOR ANSWERS THAT DON'T COME OFF CONFUSING YOU MORE THAN GIVING YOU AN ANSWER. ALL HELP AND INPUT WILL BE GREATLY APPRECIATED

Under ERISA 407, it states that a plan cannot acquire employer securities if immediately after the acquisition, the value of the shares exceeds 10% of plan assets. My question is:

if no further shares are purchased, yet the value of the shares in future years goes up beyond 10% of total plan assets, does the plan have to sell off shares to get back down to 10%? I don't believe it has to but others say yes.

When I searched the message board archives I found a discussion on this topic that dated back to 2003 and 2002. There was some talk about a comment made by the IRS at an ASPA conference (2002 conference) that indicated the contr. receivable should NOT be removed from participant account balances when determining top heavy status. This position, however, appeared to be contrary to the Regulations at 416.

I was wondering if there is any more recent discussion on the matter. Are most administrators removing the receivable from the end of year balance when determining if a plan is top heavy or are you leaving it in the balance?

I know that this issue only pertains to plans not subject to minimum funding (412) or to first year of a plan.

DB plan has received a domestic relations order assigning a portion of pension benefits to the ex-wife that was enter by the court in 1978. It clearly identifies the plan and does a pretty good job of specifying the amount assigned to the ex-wife. Insufficient for us to determine how and when to pay.

Myunderstanding (which I hope you will confirm or correct) is that a plan may treat a pre-REA order as a QDRO and pay benefits to the ex-wife (alternate payee). In this is correct, we plan to go back to the parties and tell them that the 1978 order doesn't provide the plan enough information to pay benefit, and then ask them to get an order that would constitute a QDRO.

This seems deceptively straightforward. Am I missing something?

Thanks.

I am making a case to present to upper management requesting to switch our recordkeeping software from TSM to Relius. Any testimonials that can be shared for those who have experience with TSM would be appreciated.

Thanks.

Has anyone considered or determined the method of passing drug rebates from pharmancy benefit managers to plan participants? I would appreciate any help you could provide on this topic.