The insurance company sent a certification as an attachment to schedule A. Has anyone ever included an attachedment with the schedule A?

Someone in my office asked me about this document this morning and I wasn't familiar with it so I told them I would try to locate it. I'm not even sure who produced it. All that they can remember is it being called "27 Reasons to Use Current Year Testing." Does this sound familiar to anyone?

Thanks,

Tim

my client has a ps plan-he is 100% owner. his two sons are in school to become dentists and also working at the practice. they just became age 21 in and are eligible to participate in the plan. they are considered hce's because of attribution and are completely throwing off my testing (super integrated plan). i don't necessarily want to do an election not to participate because one or both may come to work at father's practice once they graduate. what to do?

thanks for any help...

Do I include the o/s loan balance in Line 2e when a participant terminates, takes a distribution and does not pay the loan balance off?

Also, is interest paid on participant loans included as part of the gains on 2c?

Thanks

Much was swept into s. 1637 Tuesday, except any provisions directly impacting COLI. My highlights or lowlights of the proposed JOBS Act added provisions pertaining to deferred comp plans include the following: [nitpicking welcome]

-- Deferred compensation elections must be made in the year before services are first performed, though the proposed bill retains the 30 day grace period provided for new plan participants & their subsequent service.

-- If "financial health of the employer" triggers are utilized in the rabbi trust a 10% penalty will be applied to those assets not fully subject to creditor risk as a result of the trigger.

-- Investment options in the deferred compensation plan must be "comparable" to those offered in the employer's qualified plan with the fewest number of investment options.

-- Accelerated payments are only allowable for reasons of severe financial hardship or change of control. One "second election" by a partiicpant is allowed to change a scheduled distribution date if made 12 months prior to the original payment date and the distribution is postponed for an additional five years

-- Change in control payments to corporate insiders are delayed for one year, and are treated as "excess parachute payments" subject to the limitations of Code Section 280G.

-- Current taxation is imposed on any exchange of options or other forms of compensation based in employer securities for the right to receive deferred compensation.

-- Generally, these new rules will be effective for deferrals made in taxable years after December 31, 2004.

-- Deferrals made prior to 1/01/2005 (and earnings thereon) would be eligible for grandfathering under the current DCP rules.

Tom

A plan uses balance forward accounting, end of plan year sole valuation date, no interest credit after valuation date, and provides for distribution of accounts as soon as administratively feasible following a one year break in service.

Accounting and other information necessary to complete the prior year valuation provided very late in the year resulting in filing of return at extended deadline. Valuation report, participant statements, and distribution packages sent shortly after 10/15 to plan sponsor for distribution.

People, particularly terminated participants move around and don't always leave their forwarding address with prior employers. Some participants are reluctant to pick up Certified mail not knowing there is money for them thinking it is a collection effort by a creditor. Mail time from the administrator to the client, more mail time from the client to the participant, Thanksgiving, then Christmas and it is year end again and another valuation date goes by, so the amount reported in the distribution package as of the prior valuation date is now incorrect and the participant has not completed all necessary election forms assuming the balance was in excess of $ 5,000. In previous years with constant market value increases, it usually meant the participants would be paid out on the prior year valuation and then the additional gain would be paid out the following year. That is until the market fell into full retreat. Asking a termianted participant who was paid out on the prior year balance to repay 20% to 50% of his distribution because he was paid after the next valuation date is a waste of time and effort. There is no discrimination in favor of HCE's and none of the effected participants are at NRA under the plan.

Since the plan distribution date provision reads: "Designated distribution. As soon as administratively practicable in the first plan year after participant incurs a one year break in service following the Participant's Separation from Service" does it seem reasonable the Regulators would claim the Plan Sponsor/Trustee failed to timely distribute assets to participants who had terminated and has breached his Fiduciary duty? Where does one find guidance on exactly what in included in "as soon as administratively practicable"? The Regulators are claiming subsequent distributions were based on an incorrect valuation date.

The problem lies in that the initial distribution election forms were for 12/31/2001 and unfortunately for the terminees, there was a significant decline in the value of plan assets between 12/31/2001 and 12/31/2002.

The Catch 22 is the terminated participants who were not paid before 12/31/2001 and were paid on 12/31/2002 account balances are complaining and calling the Regulators. If this group was paid after 12/31/2002 using 12/31/2001 balances, active employees would be complaining and calling the Regulators.

I have a client that is a controlled group of companies. A new company will soon be added to the controlled group. Currently all companies are covered by one plan document with immediate entry. The plan is also cross-tested. They are wanting to exclude the new company from the plan. However, it looks like they may have a hard time passing 401(a)(4) non-discrim if they do so. I am thinking of suggesting they implement a year of service for plan entry just for the new company. Due to the expected turnover in this new company this would eliminate any testing issues.

I would appreciate any other comments or suggestions on plan design for this situation.

is there anyone out there that discloses asset based fees in the spd? i am referring to fees for admininstration, record keeping or even investment advisory fees.

I have a fully insured group health plan. The group health plan currently only receives summary health information, enrollment and disenrollment information. With this arrangement HIPAA Privacy rules exempt a group health plan from administration requirements.

If an employee comes to the plan administrator requesting help with a claims issue and the plan administrator receives protected health information, the group health plan will be subject to the administration requirements. Can the group health plan get out of these requirements by requesting the employee to sign an authorization form to use and disclose the employee's PHI to resolve the claims issue?

Thanks.

Did the DOL or IRS issue any type of relief for correcting delinquent loans that became delinquent due to administrative error? I have been told there may have been some type of guidance issued, or someone was thinking about issuing guidance, or they would prefer to torture us....Anyway, I can't find anything anywhere.

How do you handle loans that are in default because a payroll deduction was never started? Do you deem the loan, or allow a corrective action? Does it matter if the loan was issued prior to 1/1/04? Are you tired of all of my questions yet?

Thanks!

I have a client who has been having major financial difficulties for the past few years. As a result, they are consistently delinquent depositing the 401(k) contributions. (The client has sometimes been months late with the deposits.) When this first occurred in 2001 (under Voluntary Fiduciary Correction Program (VFC)), we calculated the lost earnings (using the greater of actual earnings and IRC 6621) and the penalty amount (under IRC 4975) for the client and completed Form 5330 for their signature. They made the deposit to the plan account for the lost earnings in 2002.

Then, in 2002, the client was again delinquent depositing the 401(k) contributions. We completed the valuation, Form 5500, and informed the client that they needed to make a similar correction (but exactly the same correction) to the plan for the delinquent deposits. Due to a billing dispute, the final correction work was never completed.

In February, 2003, they came back to us and brought their account (with us) up-to-date and asked us to complete the 2003 Valuation. We are in the process of completing the valuation and (surprise, surprise) they were delinquent depositing the 401(k) contributions for 2003.

Here are the first round of questions:

1) Since we used the VFC program in 2001, can we use it again in 2002? 2003?

2) If yes, what needs to be done? Is it as simple as the calculation the lost earnings (using the greater of actual earnings and IRC 6621) and the penalty amount (under IRC 4975) for the client with Form 5330? Is there anything else we are missing?

3) If not, what needs to be done to correct the problems above?

Any help would be greatly appreciated.

I have a client who has been having major financial difficulties for the past few years. As a result, they are consistently delinquent depositing the 401(k) contributions. (The client has sometimes been months late with the deposits.) When this first occurred in 2001 (under Voluntary Fiduciary Correction Program (VFC)), we calculated the lost earnings (using the greater of actual earnings and IRC 6621) and the penalty amount (under IRC 4975) for the client and completed Form 5330 for their signature. They made the deposit to the plan account for the lost earnings in 2002.

Then, in 2002, the client was again delinquent depositing the 401(k) contributions. We completed the valuation, Form 5500, and informed the client that they needed to make a similar correction (but exactly the same correction) to the plan for the delinquent deposits. Due to a billing dispute, the final correction work was never completed.

In February, 2003, they came back to us and brought their account (with us) up-to-date and asked us to complete the 2003 Valuation. We are in the process of completing the valuation and (surprise, surprise) they were delinquent depositing the 401(k) contributions for 2003.

Here are the first round of questions:

1) Since we used the VFC program in 2001, can we use it again in 2002? 2003?

2) If yes, what needs to be done? Is it as simple as the calculation the lost earnings (using the greater of actual earnings and IRC 6621) and the penalty amount (under IRC 4975) for the client with Form 5330? Is there anything else we are missing?

3) If not, what needs to be done to correct the problems above?

Any help would be greatly appreciated.

Client has been miscoding Box 7 of IRS Form 1099-R for certain annuity distributions from their DB plan for a seemingly random group of participants. Apparently, Code 4 (distribution on account of death) has been erroneously used for normal distributions (Code 7). The recipient's name on the form is the participant (rather than a beneficiary), and this has been going on for a number of years.

Other than the fact that the form is incorrect, what are the issues associated with using Code 4 when Code 7 should have been used (e.g., are there different state withholding rules for distributions on account of death)?

A DB plan participant dies. His former spouse claims she is entitled to 1/2 of his pension during the time they were married pursuant to her divorce decree (which does say she is entitled to 1/2 of his pension); however, neither a DRO nor the divorce decree (until now) was ever presented to the plan. Do we have to comply with the divorce decree?

What are the limits for contributions to a 457(b) Plan? I seem to remember it was $13k for this year. That would include deferrals, match and/or a discretionary contribution. (I guess it's sort of a 415 limit for 457 plans, but just at $13k)

If an IRA beneficiary fails to commence required minimum distributions for a few years, discovers the error, then takes the required minimum distributions into income for the current year, what is the likelihood of the IRS assessing the 50 percent penalty if taxpayer is audited and the error is discovered? Has anyone ever had the 50 percent penalty assessed?

Father owns 100% of company. Will be gifting shares to son-in-law. They may be starting another company. Daughter is not an employee.

If the ownership of the companies were structured that there would not be controlling interest -- either father owns 100% of company A and son-in-law owns 100% of company B; or each owns 50/50, is there control?

I know there isn't attribution to each other (no double attribution). But would the daughter end up indirectly owning 100% of each and therefore there is control?

* * * * * * * * * * * * * *

Never mind -- I forgot the one essential fact that makes this a non controlled situation. The daughter is not minority aged so the father's stock would not be attributable to her. So no control unless either the father or the son-in-law has controlling interest in both companies...

A profit sharing plan has a last day rule. An employee who was not employed on the last day was given an employer contribution. The plan uses new comparibility rules to allocate the contribution. Therefore, this was just additional money deposited to the plan unneccessarily. To correct can I leave the contribution in the plan assets and use it to reduce the employer contribution for the next plan year? I don't see any reference of how to correct in the plan doc.

I have posted on the 401K board... maybe some of you have seen my posts. I have been performing TPA work for way too long. I took over a family business and now need to grow. I am activly pursuing the QKA (simply going in order) to put some initials after my name so I am taken more seriously.

My Question: Suggestions where to gain new business... plans. I am soliciting local CPAs... financial advisors. I am presently a one man TPA firm administering 35 plans. My goal is to double (or more) my workload and move on from there. My niche is the small closely held corp.. SE individual. Any suggestions ??? any small plans people want to lighten their work load of?

(This board doesnt get too much action... But didnt want to take up the 401K board....)

Has anyone out there drafted a deemed IRA provision for a plan? If so, how did you address the 2003-13 guidance suggesting the Listings of Required Modifications for IRAs be added to the plan?

Following is a link where I address the issue in more depth.

http://benefitslink.com/boards/index.php?s...t=0entry93487