Does anyone know an internet site for the IRS audit guidelines for ee benefit plans?

THank you for your other answers CV.We are working with an organization that has two 403(B) plans, both are ERISA plans. One has employer match in

it, the other is employee dollars only. We have received conflicting

information regarding whether Schedule A still needs to be filed with

annual returns of these plans. They are preparing the 1997 returns, and

would appreciate any clarification you can offer.

Does anyone have any experience seeking a refund of PBGC premiums mistakenly paid by a governmental entity? I have a client who has paid premiums for years on a small DB plan. However, they received an IRS ruling some years ago that their plan was a governmental plan. I am wondering how difficult it is to get the PBGC to issue refunds. Any input is appreciated.

Does anyone see any problem with undertaking the following transaction: A small public instrumentality wants to discontinue its qualified db plan and begin to participate in large state retirement system. However, there are some older employees who may be better off staying in and accruing benefits under the existing small plan. The small entity wants to "partially terminate", cease benefit accruals and distribute benefits for most employees so that they can begin participating in the state plan. Some older workers will be offered an option to stay in the small plan and continue to accrue benefits. Since the small plan does not need to worry about the coverage or nondiscrimination rules, this seems to be "doable" even if the employees who stay in the plan are HCEs. Does anyone see why this won't work?

I need some guidance on the correct way to enter in rehires.

Date of Hire: first hire date or second?

Status: Rehire?

Status Date: Date of Rehire?

Termination Date: ??

Where does the first termination date go?

i recently retired and rolled my 401-k . it is all in mutual funds. i want to sell some stock and put some of my retirement $ with a venture capital group for some foriegn investment but not if this would be deemed a taxable event. can some help? thanks

Consider an individual that owns, let's say, 5 businesses, and earns about $200,000 from each business. Each business has several employees.

The 5 businesses are NOT in the same controlled group, because he owns 50% of each business, and there are no common owners among the businesses. An attorney has advised him to this fact.

Also, assume that the businesses are completely separate.

So, it appears that he can have multiple defined benefit plans (or multiple defined contribution plans) covering each business. And a separate 415 limit would apply for each business.

Therefore, he will be able to contribute either $150,000 (5 x $30,000) to defined contribution plans, or probably around $250,000 to five defined benefit plans.

Have I missed something?

I suspect that he has (either by design or by fortune) structured his ownership very favorably!

Again, have I missed something?

(By the way, he be be forwarned that ANY changes in the ownership could jeopardize this nice arrangement.)

When gathering documents for a takeover client, we discovered that their copy of the adoption agreement was not signed. So, we contacted the prior recordkeeper (an insurance company) and asked for a signed copy from their files of the most recent plan document. Well, when we receive the document, it is a more recent restatement date than the client's copy. This more recent document has been signed by one person who is both the trustee and an officer of the company.

The problem is that there are two drafting differences between the two documents.

1) the money purchase formula was changed to read 0% (.001%)

2) the forfeitures were changed from using them to reduce contributions to allocating them to participants

According to the client, they never initiated any changes to their document, and have no board resolutions authorizing any changes. They have had one plan year end since this restatement, and they contributed at the prior formula under the plan, and used forfeitures to reduce the employer contribution. We are completing the current plan year end now.

Do we have any options here? I feel that the change to a 0% formula is an obvious error in computer entry that was never intended. By continuing to make the money purchase contributions they are only benefiting the participants. This appears to be an obvious oversight in computer entry because the entry was defaulted to .001% by the system.

The change in use of forfeitures I have a problem with though. This change was actually to the benefit of the participants, so in my opinion must be followed regardless of the intent of the employer.

From the employer's perspective, these drafting errors are going to cost them thousands due to losing the forfeitures, and insist the officer did not understand or recognize the changes. Obviously, that argument will have no merit with the IRS.

Any suggestions? Does the lack of board approval account for anything? My initial recomendation would be to continue contributing under the plan as under the prior formula. Immediately adopt an amendment to correct the 0% contribution level. Do not use forfeitures to reduce, but rather allocate to participants for this year. Also, correct under APRCS to contribute the forfeitures used last year plus any earnings to last year's eligible participants. I guess I do not think it is necessary to go through CAP just to contunue the formula as it has been for years, just due to an input error. Actually, due to the lack of 204(h) notice, the change would be ineffective anyway. Does the remedial amendment period help me any? The restatement date was in the January of 1996.

Any other thoughts or suggestions? Thanks!

[This message has been edited by Dawn Hafner (edited 09-17-98).]

Would like to get your reaction/thoughts related to the following. Assume a DB plan in VCR. Several defects have resulted in "overpayments" and "underpayments" from the plan. These defects affect practically every participant in the plan (both HCEs and NHCEs.) We do not intend to collect the overpayments because we probably will not convince anyone to repay and it would be too much of a headache. Also, the plan is significantly overfunded and we (the employer) have proposed not to "repay" the overpayments to the plan because of the overfunding (BTW it appears the IRS is not going to challenge this).

Here's the issue: A sizable portion of the overpayments were made to individuals that were participants in a nonqualified supplemental pension plan (this plan made up benefits that could not be paid from the qualified DB plan because of 415 limits, comp limits, etc.) For example, a person's total benefit is 200K of which only 150K could be paid from the DB plan because of 415, comp. limits, etc.; the remainder of 50K would be paid from the nonqualified plan. However, the DB plan was actually paying the entire 200K. Hence our defect. A question has been raised as to whether the payment of 50K from the qualified plan is a prohibited transaction. The argument is that a PT involves the intentional OR inadvertent use or retention of plan assets by a party in interest. Also, it has been suggested that you could call this a loan from the plan to the employer because the plan has discharged an obligation (the $50K) of the employer. Thus, the PT excise taxes would be reduced because the amount involved would be the interest on the loan. But what is the interest rate? Based on a literal reading of PT laws/rules I can see where one might get to the conclusion that this is a PT. On the other hand I never dreamed that the PT rules were designed to capture these types of transactions. If so, then could you argue that every overpayment from any qualified plan is a PT? What is your opinion? Has anyone seen the IRS call this a PT?

Where do you find an administrator to start the planning process for a Cafeteria Plan/Employee Spending Account?

I'm interested in general pre-ERISA vesting restrictions. Particularly those in effect in 1968. For example, was 15 year cliff a permitted vesting schedule?

I'm looking for some references in Federal regulations that require special pricing of HMO's for employee contributions. Does such a thing really exist?

Peg

I'd like to know if there are some sites or reference books I can look in to get supporting surveys for 401(k) Plans. I have client with a top-paid participant who is upset that they changed from strictly Profit Sharing to 401(k) Profit Sharing. He would like supporting surveys of the # of companies who have 401(k) Plans versus Profit Sharing or Pension.

Thanks.

My question is on Association that provides benefits (Health,

>welfare and pension) to membership). What is there responsibilities to

>provide SPD's, fiduciary role to participants. The participants are

>employees of the member organizations, yet the association provides most

>of the plan services. What are the actual obligations of the association

>to the participants.

My question is on Association that provides benefits (Health,

>welfare and pension) to membership). What is there responsibilities to

>provide SPD's, fiduciary role to participants. The participants are

>employees of the member organizations, yet the association provides most

>of the plan services. What are the actual obligations of the association

>to the participants.

My question is on Association that provides benefits (Health,

>welfare and pension) to membership). What is there responsibilities to

>provide SPD's, fiduciary role to participants. The participants are

>employees of the member organizations, yet the association provides most

>of the plan services. What are the actual obligations of the association

>to the participants.

I have a small consulting and admin firm. I am running out of storage space because I am afraid to discard anything. What should I be saving and for how long? What about a terminated plan or a terminated client?

if it is first year of plan (no begining balance) you count everything.

you always count required contributions no matter when deposited.

deferrals made in Dec, not deposited until January

Match, if by formula rather than discretionary (dont include these)

if this was a money purchase rather than 401k, you would count the required contribution

I am working with a client with a 401(k) profit sharing Plan which is close to top heavy. A non-key employee just resigned. She has a significant account balance and if she takes a distribution, the plan will definitely be top heavy for 1999 based on a determination as of 12/31/98.

My question is this - can the client defer top heavy status if the terminating employee defers distributionand leaves her account balance in the Plan?

A Money Purchase Plan with individual directed accounts received an inelligible "deposit" into a participant's account. His Brokerage firm deposited a 403b earnings distribution into his MPP Plan account instead of his regular account with the same brokerage. Additionally, the MPP has been terminated and assets are being rolled out this year. How can this be corrected?