austin3515

So you know how plan dopcuments have the area where the TPA can sign, authorizing uyse of the prototype? What does it mean if everyone but the TPA signed where they were supposed to. This was an occurence of the adoption agreement being emailed. Is it a problem? It says write in the language that we have that "Such acknowledgment is for administerial purposes only". Certainly it's not a compliance issue, correct?

Is there any reason that a sole proprietor can't use an evergreen deferral election? In other words indicate "I elect to make 401(k) contributions equal to the max allowed (including catch-ups) every single year until I change my election." I've just never did it that way because it generally comes up on a one-off basis. But now I'm in a position to use more of an evergreen election.

just got a projection the likes of which I have never seen. There are two allocaiton classes for the employees - those earning more than $65,000 and those earning less than $65,000. I know we're not bound by reasonable classification for anything, but it just seems so "obnoxious?" (probably synonomous with very very clever!) that I just had to ask...

just to make sure no one thinks I am suggesting that D's should not be reported. Nothing could be further from the truth. My situaiton again is that a filing was inadvertently missed and the question is "Was a filing REQUIRED in the first place." That is it. Yes, you're crazy if you don't report D's for all the reasons mentioned above.

Now we're talking

FROM THE REGS AS OF TODAY (§301.6057-1©(2)(ii)): c) Voluntary filing —(1) In general. The plan administrator of an employee retirement benefit plan described in paragraph (a)(3) of this section, or any other employee retirement benefit plan (including a governmental or church plan), may at its option, file on schedule SSA information relating to the deferred vested retirement benefit of any plan participant who separates at any time from service covered by the plan, including plan participants who separate from service in plan years beginning before 1976. (2) Deleting previously filed information. If, after information relating to the deferred vested retirement benefit of a plan participant is filed on schedule SSA, the plan participant— (i) Is paid some or all of the deferred vested retirement benefit under the plan, or (ii) Forfeits all of the deferred vested retirement benefit under the plan, the plan administrator may, at its option, file on schedule SSA (or such other form as may be provided for this purpose) the name and social security number of the participant with the notation that information previously filed relating to the participant's deferred vested retirement benefit should be deleted. I think this is why the SSA Instructiond do not say you are required to report them. I'm sorry but the section of the instructions I've noted above simply do not require it. Tom, I see you're point, but inference is not a requirement. And a plain english reading of the instrucitons appears consistent with the regulations.

I always report them too. This happens to be a plan that left us, we coded the plan as inactive, and we inadvertently missed a filing date for the ssa (it happens to be a fiscal year-end plan). It just so happens that ALL of the entries were D's. So we're trying to figure out if we have a problem or not. Tom, are you suggesting bullet point 3 overrides the section entitled "When to report a separate participant" and "When not report a separated participant"? Both of those sections in my opinion suggest that I would not be REQUIRED to report them. http://www.irs.gov/pub/irs-pdf/i8955ssa.pdf

Is it mandatory to report D's, or is still optional? The instructions do not seem to go out of there way to tell you not to report them. Any help is appreciated...

Great idea, but that's not generally how platforms work. Also, participants will continue to see the money in their statements under your scenario. It just stinks all the way around.

I would, but my client craves forfeiture dollars

What I don't like is not knowing with certainty how vested someone is, and then the possibility of doing a bunch of residual distributions.

I suppose I do see your point, but that doesn't mean I have to like it

We ran the test correctly - anyone eligible for the Plan.

I know what happened. The PRincipal person call center employee said "are you paid via a K-1? Yes? OK, then you have until April 15th." A tale as old as time... OR at least since they introduced s-corps...

As of 1/1/2012 company A has 100 eligible employees. On March 31, Company A lays off 21 eligible employees, or 21% of its work-force. Calendar year plan. The newish IRS standards suggest that we might not know if we have a partial termination until the end of the year. The Plan has a liberal eligiblity and if they hire even 2 or 3 people the %age drops below 20%, where there is a rebuttable presumption that there is NO partial termination. So how do I process distributions between now and the end of the Plan Year? What vesting do I use? I believe no matter which way I turn I have exposure, because I literally do not know what their vesting should be. And people who get laid off have a habit of wanting to take their money out of the Plan... Has anyone been in this situation before?

the EOB actually says to prorate. They say some argue you dont have to but it is labeled the "Agressive position." Apparently there was a Q&A in 2011 about this and the IRS reply was to prorate.

Authoritative guidance, thank you very much!!

Your INTERPRETATION is that there are three people. My question is, is that interpretation correct? Like I said, I like the interpretation. I'm just not convinced it is correct.

Big Co closes down small co it's wholly owned subsidiary on 4/30/12. The Plan (what's left of it) will be merged into Big Co's plan. Do I need to pro rate the comp limits?

DOL they had a rule On Expense Ratios Everyone, we thought it dumb Why expense ratios? A disclosure here, a disclosure there No one reads them cuz no one cares DOL they had a rule Its purpose no one knows

Unlike many other rules, I think this is one where you can call your client who recieved this letter, and when you tell them its because of a failure to report mutual fund expense ratios (or a subset thereof), their response will be "Are you kidding me???? That; is ridiculous!!" I mean it's nothing like the burning embarassment of forgetting to attach an extension and getting that letter (in the old days!). Derrin, you should post here more often Any chance you could record us a song on schedule C disclosures? Probably already have one though don't you? Can you send us link on youtube?

(2) Leased employee For purposes of paragraph (1), the term “leased employee” means any person [Person 1] who is not an employee of the recipient [person 2] and who provides services to the recipient if— http://' target="_blank">(A) such services are provided pursuant to an agreement between the recipient [person 2] and any other person [person 3] (in this subsection referred to as the “leasing organization”), I reallly really like the argument, a LOT that a third person could be implied. Here is my counter-argument though: The AGREEMENT is between two people - the recipient and ANY other person. Is the 1099 contractor NOT anoither person?? The word "any" has zero limitations, which one must presume was the intention. The words "other than the leased employee himself" would have been required to prevent my intepretation. Perhaps your counter to my counter (if I may) would be "yes, but Congress could have said "an agreement with any person" (leaving out the word other), in which case everyone would agree with me, I'm sure. They included the word "other." So why add this extra word? My counter to your counter to my counter would be, couldn't it just as easily be stating an obvious truth, which is that one cannot enter into an agreeement with ones self? And finally, if it really is this complex, shouldn't small employers just ere on the side of recognizing service if the primary direction and control objective is satisfied?

(A) such services are provided pursuant to an agreement between the recipient and any other person (in this subsection referred to as the "leasing organization"), Based on my reading, a leasing organization can be "any other person" - they are just "referred to as" a leasing organization. (2) Leased employee For purposes of paragraph (1), the term "leased employee" means any person who is not an employee of the recipient and who provides services to the recipient if— (A) such services are provided pursuant to an agreement between the recipient and any other person (in this subsection referred to as the "leasing organization"), (B) such person has performed such services for the recipient (or for the recipient and related persons) on a substantially full-time basis for a period of at least 1 year, and <A name=n_2_C> © such services are performed under primary direction or control by the recipient. If you look at just the bolded and focus on those words, I don't see how a 1099 contractor is exonerated from leased employee status. And here is the paragraph I was referring to regarding recongnizing eligiblity and vesting service: "In the case of a person who is an employee of the recipient (whether by reason of this subsection or otherwise), for purposes of the requirements listed in paragraph (3), years of service for the recipient shall be determined by taking into account any period for which such employee would have been a leased employee but for the requirements of paragraph (2)(B)." [2B being "substantially full-time for at least a year"] So these are the complete rules that I know of. How is my 1099 contractor who worked on-site on a project for the empoyer NOT considered a leased employee (except for 2B)? Let's assume that this 1099 contractor provided similar services for other clients, and based on that fact the employer in its judgment correctly concluded that this guy was not a true employee.

What is the difference between an indepenent contractor and a leased employee? Client called and said that an ee who was formerly a 1099 contractor is now a full-time employee. We're debating whether or not we need to recognize service for eligibilty and vesting under the leased employees rule the way we would, say if the employee first worked for a temp agency. How do we REALLY know the difference between a leased employee and a 1099-contractor? I think if: 1) The 1099 employee worked on a "project" for the recipient, they would have been under the primary direction and conrol of the recipient, and they would have been working pursuant to an agreement (i.e., you work and I'll pay). The third requirement (substantially full0time for at least a year) is expressly ignored for purposes of recognizing service. So in this situation, I WOULD recognize service. 2) Now if the employee happened to mow the lawn for the company on the weekends and happens to get hired in some other capacity then clearly, he would be a new hire with no service. Maybe I'm over-complicating this, and if so, please tell me.

I can appreciate that there are some very astute pension people on this site who probably have more expertise than I with respect to large plan 5500 issues (less than 10% of our plans fall into that category), but I had never heard anyone mention this (admittedly I did not study the volumes of new info coming out on these--shame on me). I have never heard from the open architecture providers that we work with that this type of disclosure was necessary, and they have provided us with extensive information on schedule C reporting. Now part of my carelesness in this area comes down to the fact that the vast majority of our audited plans receive a "Schedule C Report" so we're talking about a super small slice of our business for which even have to delve into this level of detail. I wouldn't be surprised if most TPA's are in the same situaiton as me (perhaps they wouldn't be as honest as me, but I'm an undercover agent, so it doesn't make a difference to me!). So while I admire those that were on top of this requirement, I think I am very good company when I say I was completely caught off guard by this! And here is the next scary question for Derrin - what about plans that offer self directed brokerage accounts? Fidelity might be getting more than $1,000 or whatever it is if people in the self directed accounts really like Fidelity funds... Shouldn't we be looking through the brokerage window?