austin3515

You've got me convinced on this one: The most important sentence (in my opinion) from that DOL opinion for your current scenario is: "Moreover, the fiduciary must not rely upon and cannot be otherwise dependent upon the participation of the IRA in order for the fiduciary (or persons in which the fiduciary has an interest) to undertake or to continue his or her share of the investment." I'm sure the plan got in the mix as a source of capital to make the deal go through. I over simplified, the truth is the plan owns about 15%, and the rest is owned by the owners. But I think it's a reasonable assumption that the plan was involved to "top off" the investment.

I don't think so, it's just regular old ownership.

A pooled 401k Plan wants to make an investment in a limited partnership. Plan will purchase 50% of the LP from an unrelated party, and the owner of the Plan sponsor will purchase 50% of the LP from an unrelated party. Is this a prohibited transaction? I wouldn't think that simply being related to the other owners would create a PT. As an example, the Plan could by Microsoft stock and the owner could also by Microsoft stock without engaging in a PT (assuming the shares were acquired from unrelated parties).

Instructions to line 6 of the Form 5500: 2. Retired or separated participants receiving benefits (i.e., individuals who are retired or separated from employment covered by the plan and who are receiving benefits under the plan). This does not include any individual to whom an insurance company has made an irrevocable commitment to pay all the benefits to which the individual is entitled under the plan. Anyone see a problem with applying this to a defined contribution plan funded with insurance contracts exclusively (i.e., no Trust).

Instructions to line 6 of the Form 5500: 2. Retired or separated participants receiving benefits (i.e., individuals who are retired or separated from employment covered by the plan and who are receiving benefits under the plan). This does not include any individual to whom an insurance company has made an irrevocable commitment to pay all the benefits to which the individual is entitled under the plan. Anyone see a problem with applying this to a defined contribution plan funded with insurance contracts exclusively (i.e., no Trust).

Just call them and ask for the form I mentioned above (Principal Reduction Form). They told me about it.

You don';t need to grandfather anyone. The whole point of semi-annual entry dates is to comply with the 18 month rule you are referring to.

Thanks Tom! [Mine is actually a plan termination, so the two you mentioned that I hadn't wouldn't apply] So for covered comp, it's the same calculation to determine covered comp, you just multiply it by 8/12 (my plan year runs through August). Is that right?

What limits need to be prorated for a short plan year? I know the SSWB, 415, and Comp, but how about covered comp? Anything else?

I cannot say enough good things about Great West. They are the gold-standard.

I think I like this explanation very very much. Based on this I can see how you could argue that the amortization is still level.

1) "Do you also tell participants that a hardship withdrawal will be followed by a 6 month suspension of elective deferrals?" Yes, because it is required if you're using the safe harbor standard??? 2) Why doesn't the partial pre-payment violate the level amortization requirement? It doesn't sound level to me if they can make non-uniform payments on a "willy-nilly" basis?

I was surprised to learn that Great West has a "principal reduction form" for participant loans. the option reads as follows: "Principal Reduction Method - You can elect to send a partial prepayment to reduce the principal balance of your loan. To elect this option, mail this completed form and your payment made payable to Great-West Trust Company, LLC to the address indicated below. Consider submitting payment by certified check or bank money order. The payment received will be applied first to the current payment due and then to the outstanding principal balance." I believe this would violate the level amortization requirement of a participant loan. What do you say? We've always told participants partial payments are not allowed.

You're obviously very well versed here - is the answer "maybe" it is taxable in State A? I did not see in the list anything that would pull in a non-qualified deferred comp plan.

Participant works in State A where he accumulates $1,000,000 in a deferred comp plan. Participant retires and moves to a state with no income tax, and then closes his account 6 weeks later. Is this good tax advice, or will State A claim that it is due some income taxes because the money accrued in their state? Edit: The Participant moved BEFORE constructive receipt.

http://www.dol.gov/ebsa/regs/fab2013-2.html Fee disclosures due date extended to "18 months" for this year to allow plan sponsors to "reset" the filing deadline to coordinate with SH Notices, for example.

http://www.irs.gov/pub/irs-pdf/p4220.pdf While Your Application is Pending While an organization’s Form 1023 is waiting for approval from the IRS, the organization may operate as a tax-exempt organization. If an annual exempt organization return is due, the organization must file it, indicating that its application is pending. These returns are subject to public disclosure. If the organization has un-related business income of more than $1,000, it must also file a Form 990-T. See Publication 4221-PC or 4221-PF for more information. Although donors have no assurance that contributions are tax-deductible for federal income tax purposes until the application is approved, contributions made while an application is pending would qualify if the application is approved. However, if the application is disallowed, contributions would not qualify. Moreover, the organization would be liable for filing federal income tax returns unless its income is otherwise excluded from federal taxation. The EO website (www.irs.gov/eo) provides information about how to find out about the status of an application for tax-exempt status.

http://www.irs.gov/pub/irs-pdf/p557.pdf See page 6, Effective Date of Exemption (there was a link to this in the IRS Q&A sited above).

That;s awesome, but if anyone has the reg that would be perfect.

I can't seem to track down where it says "filing" is a requirement to be a 501c3? I didn't do an exhaustive search, because I figured you might know off the top of your head,.

That's good enough for me actually. If fling is the only requirement, they have done that. In other words, you are until they tell you your not. Sort of like submitting a 401k plan for a determination letter perhaps - you're a qualified plan unless they tell you aren't. The law says what it says, and it says "filing" is required to be a 501c3. I'm sure you still need to comply with all rules relative to a 501c3, of which a filing is only one of those requirements. I assume that this is to protect people from waiting and waiting and waiting for the IRS to respond.

But not yet approved by the IRS, although it is more or less "guaranteed" it will be approved. Can they start a 403b before the application is approved? [They receive state grants to provide services to the mentally disabled.] Any citations appreciated. I have it on good authority that this is doable, but that individual (an ERISA attorney) couldn't recall where he had obtained this response.

http://www.dol.gov/ebsa/faqs/faq-sch-C-supplement.html Question 13 is directly on point.

$100M plan gets back $50,000 in revenue sharing and it's put into an ERISA Recapture Account to play pan expenses. Auditor fee is $25,000. If the auditor fee is paid from this recapture account, is this indirect compensation? The implications of course are: -408b2 reporting requirements -Schedule C reporting (as indirect as opposed to direct). Any guidance or articles from the IRS or the "big" names (Reliusu, McKay, Reish, etc) would be great! Thanks,

Yes, mine is a DC Plan. Thanks!