austin3515

How about if the employer makes the loan, as is the case here... I didn;t think that would be relevant, but now that you put it that way... It's coming up in a VCP submission as part of the correction, which is why the employer is even willing to do it. I'll spare the gory details...

I wouldn't have thougth so either, but one of the best ERISA attorneys I know, says their concerned that it could be viewed that way, since the outcome is people obtaining bridge loans for the sole purpose of circumventing the 5 year requirements. They were of the opinion that provided "X" amount of time elapses it should be OK, wherein X is a sliding scale, the larger the value, the less likely it is that there could be the appearance of a refinancing. But I am inclined to agree with you both, that it wouldn't be a refinancing...

Loan balance of $20,000. Original date of loan is 2 years ago. Loan is repaid on Monday, so the loan balance is zero. A new loan is taken 1 week later for $20,000 and a new 5 year term is granted, Discuss

I think a case could be made for embezzlement, and that's a crime, isn't it? I suppose there are no good semaritin laws forcing you to report them, but then again, I think you should pay someone $350 an hour to advise you on that (assuming they're worth it!)

Plus if it was on a platform and the money was posted as 401k, I'd suggest you'd have a pretty hard time suggesting it was anything but 401k. And Sieve's point is also a good one, which I think he was suggesting that if on payroll reports the money says it's 401k from the draw, you'd have a similar issue. Be careful since the participants may have already accrued a right to the THM, and any "funny stuff" will be a cut-back (or worse!).

When running testing using net comp, if the owner has K-1 income of say $250,000 AFTER all employer/payroll tax deductions, are other people reducing the comp by the $16,500 in deferrals to test consistently? I'm not sure there is any basis for doing it this way, it just seems like the right thing to do...

Any chance the additional $3,000 was deposited in the following plan year? You could add profit sharing for that next plan year...

From 1.401(a)(4)-11(g) (2) Scope of corrective amendments. For purposes of satisfying the minimum coverage requirements of section 410(b), the nondiscriminatory amount requirement of §1.401(a)(4)–1(b)(2), or the nondiscriminatory plan amendment requirement of §1.401(a)(4)–1(b)(4), a corrective amendment may retroactively increase accruals or allocations for employees who benefited under the plan during the plan year being corrected, or may grant accruals or allocations to individuals who did not benefit under the plan during the plan year being corrected. In addition, for purposes of satisfying the nondiscriminatory current availability requirement of §1.401(a)(4)–4(b) for benefits, rights, or features, a corrective amendment may make a benefit, right, or feature available to employees to whom it was previously not available. A corrective amendment may not, however, correct for a failure to incorporate the pre-termination restrictions of §1.401(a)(4)–5(b). No where does it list top-heavy. Believe me, I love the idea, because it would apply to a plan that I am working on right now, but what is the rationale for triggering -11(g) merely becasue the plan is top heavy. And are you suggesting that I can amend the Plan under 11(g) to, for example, increase allocations to all employees working in the Mail Room, just enough to bring the Plan below 60%?

From the DOL;s FAQ's The signer of the 5500 certifies "(1) that the service provider has been authorized in writing by the plan administrator/plan sponsor to electronically submit the return/report; " To me, that means the organization, not the individual. I woudl assume that depending on the size of the organization, a dew designated "senior" people should do the signing.

We took over a plan, and here's what they do (and have been doing for several years, and allegedly passed audits): -Each employee gets $500 to spend on health insurance benefits, -If people opt out, or if they have lower insurance premiums, the $500 (or the remainder of the $500) is deposited to their account as profit sharing. We're thinking no CODA b/c the employee never has the option to receive it. Let's assume they were on a volume submitter document, each in their own group, and therefore no restrictions on the number of allocation groups. My biggest problem with this is that it seems to fail the requirement that a plan have a definitely determinable allocation method, since the allocation includes these other varaibles (i.e., the insruance premiums and the amount of this stipend). Do you think a favorable determination letter would ever be granted for a document that includes this allocation method specfically?

Bad name for the subject... I though about changing it earlier on, but there were already several posts. I used it because that's what we were all asking for on the asppa petition, but you're right, there is no credential sharing allowed.

Found it in today's benefitslink newsletter... http://www.relius.net/News/TechnicalUpdates.aspx?ID=514

Can you put the link out here for where this blurb came from?

Amen to that, Mike Preston! About the other instances of your signature being out there, the distribution is profoundly limited when comparing it to wide open distribution over the interent, accessible to billiosn of people, including the crooks..

Restructuring is a testing option similiar in nature to testin otherwise excludables differently, so yes it's just "on paper" and exclusively for testing. You "pretend" you have two separate plans, and test both plans for coverage accordingly.

Case in point: a) Owner is 25, and 10 employees are each age 50, so X-Testing does NOT work. b) Plan is integrated at 80% of the taxable wage base, and the owner makes 100K and the 10 ees makes 50K. c) 8 of the 10 are eligible for the PS, but 2 are eligible for just the safe harbor. Question: Does rate group testing pass? The answer is "No" becaue when you impute disparity on this Plan it doesn't give the owner any benefit since he made less than the TWB, yet he is getting a higher rate of contributions. Yet, because we can restructure these plans into two design based safe harbors, no general testing is needed, and this common plan design is not "doomed."

I just think a) this "manual" filing mehtod is legitimately the only conceivable option for some plan sponsors, and b) it should not be availalbe only at the risk of identiy theft, which as we all know is a huge national problem. We haven't officially decided what we are going to do but if we do tell them they must sign, it will have very very strong language suggesting that identity theft is a very very possible outcome from this.

I disagree... Here's what you do: -Restructure the plans into two plans - people who get just the safe harbor (SH Plan) and people who get both (Both Plan). -Treat those people covered by the SH Plan as not benefitting in the Both Plan. If the Both Plan still satisfies coverage, you're OK. -Same thing applies to the SH Plan, but of course there are generally not any HCE's in this plan. Both plans are design based safe harbors and exempt from general testing. Preserving this status is cited as one of the primary reasons for restructuring in the first place. And since many plans now have the 3% SHNEC plus PS with allocation conditions, this is a pretty important thing to be aware of.

I thought it was page 46, but yes I was referring to the actuary stuff on initialing. I'm applying the same logic to the plan administrator signature as the DOL has already applied to the actuary signature. In other words, they've already set the precedent that for security purposes, actuaries are allowed to NOT sign the returns, and instead initial it. I spoke with a forensic accountant who gave me a list of things a crook could do with my signature if he had the opportunity: -Apply for a loan -Sign checks (say, if an employee the businedss checkbook on a table) -Obtain power of attorney Based on that conversdation, I would definitely NOT recommend anyone advise their clients sign their actual signature. And if the DOL ever really gave a client a hard-time about this, I think a perfectly reasonable response is to site security concerns.

We say the testing passed and just keep it simple. Most of our clients wouldn't understand even if they read the year-end letter. If I'm at a meeting, or talking about plan design, or otherwsie involved in a converation on the subject, it would come up. But in my report I just say it passed. This is what I have heard referred to as the KISS policy - Keep It Simple, Stupid

I believe it has to do with trust law, and something about having to have a "corpus" to be anything. So with no money, there's no trust. Maybe a state law thing?

Spousal consent is tied to the automatic cash out thresshold, barring some sort of language to the contrary which you probably will not see in a prototype document.

Page 46 of the 5500 instrutions for this little gem... In my opinion, I would be more than comfortable telling a client to intial as opposed to signing based on that reference.

I'm soliciting a friend of mine forensic accountant for an assessment of just how big of a trainwreck this is... I'll let you know what he says, but if anyone has any inside scoop on how criminals could use this, I would appreciate it... I also thought of just telling clients to hand write their name in all capital letters, or at least just in print.

I completely agree with you...