goldtpa

effen No I did not and do not expect to hear him say that he will let the PBGC fail. Someone told me that he said something to the affect that he will not allow companies to file a distress termination due to market losses. I was trying to find a link of where he said that. Obviously he wont let the PBGC fail. This is certainly one way to prevent the PBGC from failing. However look at all of the companies that paid PBGC premiums over the years. Now all of a sudden they may not be able to file a distress termination? That's like buying life insurance from Buzz Buzzard's Low Life Insurance Company only to find out that the policy doesn't pay benefits.

Did anyone hear that Pres. Obama said that he will not let the PBGC go belly up? Supposedly he said that his method of protecting them was not to allow businesses to do a distress termination if the reason for the distress termination was due solely from the market losses from '08. Did anyone else hear this?? If so can you point me to a link? Thanks.

Have a client that adopted an individual plan. He does not want to submit for the cycle as business is down. All of his documents are up to date. Under the 5yr cycle, does he have to submit for a LOD? Is there are penalty if he does not submit for a LOD?

The bill states that ... "Under the provision, no minimum distribution is required for calendar year 2009 from individual retirement plans and employer-provided qualified retirement plans that are defined contribution plans (within the meaning of section 414(i))."

have a client that had all of the pension money with madoff. Small business, no ee's. The two owners were the only participants. their BOY assets were 1 mill. EOY assets are 0. Should I carry the mill as a receivable? Or should I carry it as a lesser value.

Everyone on the board should come up with an idea on how to provide relief and send it to congress and the papers, assuming that the papers are still in business. For one, I think that they should have allowed lump sum distributions of up to 10k despite AFTAP being under 60%. Anyone have any other ideas?

going thru the posts from 2004. just seems that people have been talking about PBGC bailout since airlines went under. Now that automakers are asking for a bailout, we have come full circle again. At what point will the PBGC need a bailout? How high can the PBGC's deficit grow to before its needs a federal handout? Can the PBGC handle GM's underfunded plan?

Thanks for the info.

Client's current TPA claims that the 2006 ADP test failed. They returned money to the HCEs. In review of the test, it appears that some of the NHCEs over 50 had part of their contributions randomly classified as a catch up. In one case the NHCE had a $5,000 deferral with $2,000 of the 5,000 classified as a catch up. The TPA did not use the entire 5,000 in the ADP test, only 3,000 was used for testing. If after re-doing the test the proper way the plan passes, is it the trustees duty to recover the ADP distributions plus interest? Would the interest calculation be the same as if the contributions were late? What about the taxes the HCE had to pay on the money? Thanks

Have a new client with a $1 million life insurance policy in the DB Plan. However the max Death Benefit is about 200,000. How do you calculate the excise tax on the 5330? Is the excise tax calculated on the premium amount that represents the excess death benefit? Normally the excess contribution is not dedeuctible. However if the client pays the premium from the assets of the plan, do they still lose the tax deduction?

I was able to get a copy of the old plan. The MPP says that forfeitures are to be used to reduce contributions. Does this mean that the forfeitures from the MPP are to reduce the contributions of the PSP?

Have a client that merged a mp into a 401k PS plan. The MP vesting schedule is being maintained under the 401(k) PS plan. I need to allocate some unvested MP money. The 401(k) PS says to pay expenses first. How do you allocate the remaining forfeitures? The only thing I found was an EP Determination Bulletin which references Rev Rul 2002-42 and cautions that before the MP Plan is merged, the plan should be amended to allocate forfeitures under a specific formula. That was apparently not not done and I do not have the old MP Doc. Current plan doc says that forfeitures should be used to pay expenses then allocated to ee's. Remaining NEC's should be allocated on the basis of comp. How do I allocate the remianing forfeitures? Do I allocate on the basis of comp or allocate to only those employees with a MP balance?

If a DB plan is covered by the PBGC, then the combined limit will not be applicable starting in 2008. It seems to me that the only people who would love to have a db and a dc would be self employed people, Doctors, etc. However they would not be covered by the PBGC. Do you think that they could voluntarily submit premiums to the PBGC in order to fully fund both?

In reviewing 2006-27 its states, "The correction methods described in section 6.07(2) (b) and © and section 6.07(3) are not available if the maximum period for repayment of the loan pursuant to § 72(p)(2)(B) has expired." Since this loan is more than 5 years old, I beleive the only option is to self correct. Distribute the 1099s in 2006 for the outstanding balance and see what happens. I do agree that the prior TPA should pony up, however client would have to chase them down. That could take awhile.

The prior TPA, which shares the same name as a 401(k) discrimination test, never deemed the loan as being taxable. Why I don't know. Now I am trying to fix it. If the loan was less than 5 years old, we could re-amortize the loan over the remaining period. However since the loan is much older and the former TPA never did anything, what do you do to fix it? 1. Do you go to a correction program and if so which one (VCP or VFCP) 2. EE should get a 1009-R. How much should it be for? 3. Is the employer responsible for any portion of the taxes.

EE took out 3K loan in 1999, never made any payments. The TPA was a payroll company. They never distributed the loan as a deemed distribution. Do you go to the DOL's VFCP or IRS' VCP? Assume that she borrowed 3k and was supposed to make weekly repayments totaling 1,000 per yr for 4 years. Also assume that the total outstanding loan balance as of today, using the original interest rate is 6k. VFCP states that an acceptable restituition would be to restore the plan, participants, and beneficiaries to the condition they would have been in had the breach not occurred. VCP will allow the plan sponsor to treat the loan as taxable in the year of correction, rather than when the violation of section 72(p) first occurred Do you... 1. go to VFCP and give ee a 1099-R for 6K and have the er add 2k to ee's account, essentially making ee whole. 2. Go to VCP and giver her a 1099-R for 6K in 2006, rather than give her a 1099-R for the year in which the violation of section 72(p) first occurred? 3. Skip it all and just give ee a 1099-R for 6k and call it a day. Thanks for the help.

Thanks for all of the advice.

I do not think that there were any actives. I think all participants were in pay status or entitled to future benefits. I thought that this company may want to go to PBGC anyway as its a public company.

Frozen plan purchases irrevocable commitments from an insurance company to provide for all benefits under the plan. They never formally terminated the plan with the PBGC or the IRS. No notices were sent out. Since the PBGC guarantee obligation has ended, do you still have to go through the termination process? I suspect that you would still have to and notify the employees. Thus, what would be the penalties for doing the paperwork after the fact.

What remedies are avaialble if the independent qualified public accountant's report is not attached to the 5500? Is the DFVC an option? Thanks

WDK- You make a very good point. Never thought of that. Thanks.

I am sorry that you think that this idea is childish. Everyone deserves to get paid for the work they do. I am merely pursuing all avenues in order to get what is rightfully mine. We do get personal guarantees from all new clients. However some of the older ones, don't have agreements. A CPA suggested this method, apparently he has used this before. I would think that he has used it to some success, otherwise why give me the suggestion? If I thought I could sue, I would have. The client is operating a shell company with no money. Do you work for free? I doubt it.

I hate to bring up this old thread however I have the same problem. I prepared forms for the client and they never paid. Client shut down its business, however has not formally closed the business. A CPA informed me that I can write a letter to the IRS asking that they reject the 5500 as filed since the forms were obtained on a fraudulent basis. Thus the forms would now be considered late and they would have to pay late fees. Has anyone ever written such a letter so I don't have to reinvent the wheel?

I just wanted to alert everyone to situation here in our office. We prepared a Safe harbor 401(k) for a client. The clients attorney made some changes to our volume submitter plan and it was submitted to the IRS as an ind doc. The IRS has said that all non-safe-harbor language must come out. For example the IRS agent wants us to remove all of the language that relates to the ADP/ACP test, as a SH 401(k) is not required to be tested. The IRS said that they do not want employers defaulting to the testing if they dont follow the SH matching. We called our doc provider and they said that they were told by the IRS Volume Submitter agents that this was not true. They said that they are going to fight this and I thought every should be aware. this would cause a real admin problem for people who in a particular year, don't follow the SH rules.

wsp you win the prize. The spd only refers to a match, without giving the formula. The question now is whether the failure to follow the doc is a prohibited transaction. The reasoning is that some employees got less of a match than they were supposed to get under the plan. Therefore the employer technically had use of the money that should have belonged to some of the employees. Plus the employees now have lost the use of that money over the last few years, thus a PT. What do you guys thinks? Thanks by the way for all of your input. That's what I love about this board.