austin3515

Okay, same situation as above, except now the contributions were deposited well after the date they were due. Say a year. I used to believe that there was a clear prohibited transaction here but now I'm not so sure. According to the ERISA Outline book, and a couple of other summaries of court cases I've read, employer contributions to a plan are not plan assets unitl contributed - even if the Plan is subject to the minimum funding requirements of IRC 412. See link to an EBIA article that talks about a case regarding this matter: http://www.ebia.com/weekly/articles/2002/E...815Cadegan.html Therefore, if delinquent employer contributions are not plan assets, there cannot be a prohibited transaction because a prohibited extension of credit must include plan assets! I know, I know, the DOL would not agree, but is it a defensible position? I tend to agree with the thread above saying don't report a PT unless its clearly a PT. By the way, the delinquency was purely an administrative oversight, and management intedns to correct with earnings.

See IRS REvenue Procedure 2002-47. The self correction methodolgy is to make a QNEC on their behalf in an amount equal to the ADP of all other NHCE's, and also a matching contribution in an amount equal to the ACP of NHCE's. See the procedure for the specifics, but that's generally how it works.

Scenario a) two participants inadvertently did not receive an allocation of the employer's profit sharing contribution, and it is now well past the extended due date of the employer's tax return. I used to think this was a deemed loan to the Plan. Now I'm reading that employer contributions are not plan assets until contributed. Rather, the Plan document is enforceable as a contract, so the employer can be forced to contribute, but the foregone contributions are not plan assets. If the foregone contribution is not a plan asset, then no prohibitted transaction can exist, right? Therefore, in this scenario the excluded participants would definitely get the foregone contribution plus earnings, but there would not be a prohibitted transaction. Am I right on this? Scenario b) Same as above, except the entire profit sharing contribution was remitted three months after the extended due date of the employer's tax return. Prohibitted transaction? Based on above I'd say no... There appears to be no guidance whatever on this published! Please provide references if possible!!

It was made after year end... Can you clarify the implications?

Thank you!

I have a money purchase plan which requires that all forfeitures available be used to offset the required employer contribution. This was not done, and the contribution has been funded fully for the previous year. The Plan does not contemplate this situation. My gut tells me that we need to dispose of forfeitures annually, but I can't find that in writing... Can anyone provide more info on this situation?

Then why are they described under limited reporting for the 5500 instructions??? I wish they would right those darn things in English! Can you clarify? I would REALLY appreciate it! Thanks!

SIMPLE IRA's and SEP's

Am I correct in assuming that plans funded by IRA's would never be subject to an audit requirement and thefore are not affected by the Small Plan audit rules?

That's my impression as well, and I have ocnfirmed that with the DOL. I actually read the article you're talking about and had the same question!

Thanks! That leter had a reference to the exact phrase I was looking for. 2520-103-5, paragraph d1 indicates that a person authorized to sign the certification byt the trustee is acceptable.

In the auditors defense, I'm sure he/she picked that up due to the fact that we are told all the time (as auditors) that if a Plan is self trusteed they (the custodian) cannot provide a certification. As the previous respondent indicated that is categorically untrue. I'm not certain why the auditor cares either, if they do in fact have a certified statement from a custodian... If your in the New Engalnd area, respond - I'd be happy to have my firm do the limited scope audit...

I swear I heard a very high authority at the DOL say that a "duly authorized agent" of a bank, trust or insurance company could issue a certification that could be relied upon for the audit. I have recently obtained such a certification from a pretty major investment firm, where the investment company certfied as "agent for the trust company." From reviewing the regs, I cannot find any mention of a duly authorized agent. Anyone dealt with this before?