Has anyone had any experience in the last year or so with a voluntarily filed late 5500EZ? I have a prospective client whose MP/PSP Assets went over 100K 3 years back, but never filed. I have advised him to voluntarily file the late returns, but would also like to tell him what he may expect in regard to penalties.

I am trying to locate copies of Form 5500-C/R for 1993, 1994 and 1995. My Hyperprep software does not go back that far, and the IRS website only has the full Form 5500 for those years. Any suggestions would be appreciated.

Thanks

In reading USERRA and all the guidance I could find on the calculation of compensation to be used to determine the amount of contributions to which an employee is entitled under USERRA, it seems to me that the "theoretical" compensation must take into consideration increases that the employee would have received (i.e. annual performance review and salary increase) had he/she remained employed. Everything I read sort of hints at this, but doesn't come right out and say it.

I would like to get confirmation that this is correct or reassurance that this is something we don't have to worry about.

Thanks to all who respond.

My client has an attorney designed profit sharing plan. He is the only participant. Attorney says plan must be amended under IRS rules by 12-31-01. Cost will be about $2,000. I believe he can get around amending by switching to a P/S prototype plan such as a brokerage firm has in place. An IRS plan specialist says he can do this & he can even use the same plan number on the 5500 for this year & need not even mention the switch on the 5500 nor is it necessary to advise IRS by doing any special filings. Sounds like what I want accomplished but have I been given the correct information?

A plan changes lump sum interest rate from PBGC rate to 120% PBGC rate for distributions over 25,000.

Is there a deadline as to when this change can occur without having to be concerned over 411(d)(6) cutbacks?

Or another way of putting it. Is there a point in time when making this change would require anti cutback provisions applied to accrued benefits? i.e. where the accd ben must be based on 100% PBGC rate and not 120% PBGC rate. And where wearaway issue can apply.

A plan is 1.5% of avg pay less 2/3 soc sec annuity.

The Plan fails 401(l) as many individuals have a zero accrued benefit in the early years.

However, for 411(B) (minimum accrual) purposes can the offset be ignored?

If a plan does not adopt the model amendment to apply the 2001 proposed regulations in 2001, should a Required Minimum Distribution due by 4/1/02 be calculated under the rules prior to the 2001 regulations, or should the calculation use the 2001 proposed regulation rules?

Given how the IRS clarified this for distributions due 4/1/01, I would say that the 4/1/02 distribution should be calculated under the "old" rules if the model amendment is not adopted.

Agree? Disagree? Cite?

2 things I'm not clear on with ESOPs...

(1) Is the dividend deduction under 404(k) available to Non-leveraged ESOPs?

(2) Loan Amortization calls for 150 shares to be released at year end, but the actual contribution amount (based on compensation) compared to the present share price only calls for 140 shares to be allocated to participant accounts, what can be done with the unallocated shares? Conversely, if the share price falters and there is a shortfall of shares released from encumberance, does the employer need to contribute the additional shares required to allocate the contribution to participant accounts?

When would a participant in the following situation be required to start receiving Required Minimum Distriubtions?

Plan doucment defines Required Beginning Date as April 1 following age 70 1/2 for all participants.

Plan document will be amended by the end of the GUST remedial amendment period to leave the Required Beginning Date the same, but to state that participants reaching age 70 1/2 between 1/1/97 and 12/31/01 (or possibly 12/31/02) will be given the option to defer their distributions until termination of employment (in accordance with IRS guidance).

If a participant that turned age 70 1/2 in 2000 elected to defer distributions until termination of employment, and the participant terminates employment in 2004, would the participant be required to start distribution prior to 2004?

Under the 2001 proposed regulations, a plan document can specify that the Required Beginning Date is Age 70 1/2 for all employees. Under SBJPA, the Required Beginning Date had to be defined as the later of age 70 1/2 or termination of employment for non-5% owners. However, plans that were not amended for SPJBA could give participants the option to defer distributions.

So which takes precedence, the employee's option to defer under SBJPA, or the 2001 proposed regulations? Would a participant who had made the election to defer be required to start distributions as soon as the 2001 proposed regulations become effective (in 2002 unless the model amendment is adopted)?

Does anyone know where I can find a sample WHCRA notice for an spd?

Has anyone filed amendments to their ESOP plans to account for the changes made as a result of the EGTRRA? I am attempting to file these in-house versus using legal counsel to save on cost. Any suggestions would be greatly appreciated.

A couple of years ago my organization laid-off several employees (not enough for WARN), these employees were offered severance pay that was substanitaly more than our severance pay policy.

This year, we are again laying-off several employees, but want to only offer the terms that are stated in our severance policy.

Can we do this without being held liable? By the way our organization is in Texas.

can you put life insurance in a db plan with only a sole prop. or a one life corp?

What kind of document can you put a governmental plan on? We don't deal with 457/government plans and the agent keeps referring to 401(a) plans, which all of our k plans are as well. I have found some conflicting information that a gov't plan could have a 401(a) plan on a prototype and that they can't. Can one be placed on a volume submitter?

Any insight would be greatly appreciated.

Non-calendar year MPPP and PSP plans are terminating 12/31/01 which which will create a short plan year for each. Must the 415 limit for the final limitation year be pro-rated. I know that it must be prorated when a limitation year is changed and a short one is created, but I thought that the full 415 limit can be used in the final year.

Thanks.

Has it been confirmed that the IRS will allow sponsors to amend their plans for the new RMD regulations by the end of their remedial amendment period for GUST?

can a sole prop. or a one-life corp. have

life insurance in a defined benefit plan?

I would like to have a discussion about the pros and cons of life insurance in a plan. It seems most TPA's hate it why? What are the administrative hassles if any. Do you charge higher fees for plans with life insurance?

Are there good financial planning reasons to offer life insurance in a plan? What are they? Is there some reference book I can refer to?

Employee bumps another employee to prevent being laid off. As a result of the bump he loses $5 per hour. He has two out standing 401(k) loans, and now wants to stop having payroll deductions taken out to repay these loans. I know a loan will be deemed to be a distribution if not paid.

My questions are:

1. Can we allow him to stop making his payroll deductions to pay off these loans?

2. If we can and before the loan is defaulted, let’s say in 3 weeks he decides he wants to continue to make payments do we allow it? If we do does he have to make the back payments to catch up?

I say No, but who knows for sure.

I think this may have been discussed in the past, but I’m not sure.

Can segregated accounts exist within and be part of a ps/401(k) plan?