Lori H

SIMPLE IRA making match each payroll all of a sudden stopped match in March. What penalties would they face if they waited until the end of the year to make up the missing match? I'm thinking none. They could just make up the match owed.

How about all the time preparers and clients have had to spend getting acquainted with the new efile? Web Client was not even available until late March, when in the past mail in forms were generally available by late Feb.

She owns. He works. I know family aggregation applies for controlled groups, but what about in the case of RMD's?

By stacked, do you mean "enhanced"?

They have at least 6 employees who worked over 1000 hours in 2009. They may have periods were they don't work but are never officially terminated ( i am not sure what counts as "officially" terminated). So if they were eligible and didn't sign up for the plan, they would still get a profit sharing. I'm thinking a New Comparability would be the best and only option for them. The document could not exclude certain employees from participating other than leased, non residents, union or temporary employees?

A 15 employee floor husband/wife contractor is looking to install a plan. Most of their employees are hispanic and only work when work is available. They are not necessarily terminated. He wants to set up a plan and doubts they will participate, but is there a way they can be excluded for plan purposes and still satisfy minimum coverage requirements? They were considering a Safe Harbor 401(k).

thanks

In the past a statement could be attached to the 5500 stating that the audit would be sent in later. Now with efile I don't believe they allow this. Any suggestions? This is for an ESOP

relius web client has been a NIGHTMARE.

Thank you kindly, GMK. Have a great day

A "separate" valuation may not be needed. An updated opinion from the appraiser, stating that the purchase price is not less than fair market value as of the purchase date, would be sufficient. There would likely be an added cost for such an update. If the company's financial situation and the state of the capital markets are such that value is declining, the use of the most recent year-end valuation should be OK, but the opinion update would still be required. If value is rising, the appraiser would have to determine an updated fair market value for the purchase price. If a higher value is used, there is an issue as to whether the distributees are entitled to receive the increased value. In either case, it is preferable for such a transaction to occur as soon as possible after the year-end valuation. For these reasons, it's much better for the company not to purchase the shares from the ESOP. The company is wanting to buy the shares from the plan. They have a participant with a large balance who was taking installments, but is now wanting all her money due to the fact the last valuation(12/31) was lower. Is there a section of the code that references the need for a an updated opinion? Thanks much! It would seem that if the plan distributed the shares to the participants and then the company bought the shares, you would have to go back several years and determine the participants basis in the plan. That would be an additional cost as some of that information is ancient history and would most likely be in storage somewhere. What if the plan's records did not go back that far? There would be no way to determine a participants basis.

the plan sponsor sent them the checks, the participants did not cash them. Can they be removed from the plan as for 5500, participation summary and all plan purposes? I am thinking yes. This is an ESOP.

a plan wrote checks to 8 participants who did NOT cash them. The largest amount was $387.92 and there were 5 checks that were for less than $2 The plan can remove them for plan purposes, yes?

ok, so they terminated 300 years ago, never paid, but will be considered an eligible participant for Line 6 purposes.

I know Line 6 on 5500 pretty much dictates when the plan is eligible for Large plan status and an audit. Line 6 is based on the number of ELIGIBLE participants at the beginning of the plan year. If a participant was eligible and terminated during the plan year, they would be included in Line 6. My question is, if a participant separated from service prior to the beginning of the plan year, but had not been paid out, would they be included in Line 6?

This participant is now deceased. Is the beneficiary(wife) subject to a tax? I believe the difference between the face amount(52,800) and the CSV (appx 35,000) is NOT subject to income tax. but only if the premiums were paid with pre tax dollars and if PS-58 costs were reported annually. Is this sound?

Hi, A lone participant has passed away and the wife is wrapping up the affairs of the plan. a life policy was in the plan with a Face amount of $55,000 and a CSV of appx $35,000 at the last plan year end. What will be her tax implications on that policy, if any and how will that policy be reflected as a distribution? Will the CSV at the time of death be used for 5500 purposes or the Face amount?

A state govt entity makes periodic contributions to its plan (no-coda). Distributions are paid in house and the plan reimburses the corporation. The corp then reduces its contribution by that amount, so for example if they were due to make a $20,000 contribution, but paid $5000 in distributions, they only would deposit $15,000. Is this allowed? They are pooled accounts.

In 2005, a 12 participant PSP hired a new adviser, released its TPA and started a 403(b) plan, which all but 3 participants account values were transferred into the new 403(b). A resolution to terminate was never prepared nor was a black out notice or notice to interested parties prepared. Additionally, 5500's were not prepared from 2005 on, nor was their plan document updated. I know the 5500's can fairly easily be resolved by using a DFVC, but what about the "false" termination issues? Could they retroactively terminate the plan and file under EPCRS? When they were transferring money to the new 403b back in 2005, they noted it was a "change in plan provider" as a reason for the distribution on the participant forms, not plan termination. It seems the new adviser dropped the ball big time, when establishing the new plan and the plan sponsor as well.

Was listing it as "Corporate Debt and Equity" each year, when actually it was a receivable. However, since it is appx 6 years late, what recourse is there. It's practically impossible to go back and revise.

It's better to avoid having the company buy shares directly from the ESOP. In order for the PT exemption under ERISA section 408(e) to be satisfied, the purchase price must be no less than the fair market value of the shares on the purchase date. In a closely held company, determining compliance with the fmv requirement on an up-to-date basis can be a problem. On the other hand, when shares are distributed to participants by the ESOP and then the company buys the shares from the distributees, the purchase price may be determined as of the prior year end. so if the company bought the shares from the plan, they would have to do a separate valuation, which would be an added cost to the plan?

thanks for the replies, two last questions 1) is the basis on a stock distribution the cumulative amount allocated as a contribution or is it the current price of stock? For example, if i was a participant in the plan for 3 years and received an allocation(contribution/forfeitures) in year one of $2,000 as well as years two and 3, my basis would be $6000. my balance is $8000. The $6000 would be taxed at ordinary rate and the NUA would be $2000 and taxed at long term rates. This would be rather difficult for a participant in the plan 20 years plus. 2) if the participant took a distribution in shares, this could not be rolled over into an IRA? Would the proceeds from the purchase of the shares outside the plan be an eligible rollover distribution?

This plan only has like $20K in cash and some of the participants have account balances of $200K and up that they will have to pay in the near future. Can the company buy additional shares from the plan at one time to plan for these future pay outs? It is about a 2 and a half hour process each time they have to go into their mainframe to change the stock list.

Thanks for your reply. Can you elaborate on the difference between the second and third option? By redeeming do you mean they buy back from the plan as opposed to buying from the terminated participant in your third option? By redeeming they don't technically make a contribution, they just fund the plan with the necessary amount to purchase the shares, am I thinking right? Also, you mention with options 1 and 2 allocation of the shares in current year would be required. I understand that with just a regular contribution to the plan, but in Option 2, if the company was to buy the shares outside the plan from terminated participants would this not just retire the shares? Meaning the plan has less shares of stock?

1) have the company buy the shares from the plan, thereby reducing the number of shares? 2) leverage the ESOP? The plan did not make a contribution for calendar year 2009. Suggestions?