WDIK

A couple of good prior discussions: http://benefitslink.com/boards/index.php?showtopic=17954 http://benefitslink.com/boards/index.php?showtopic=23926

Have you reviewed a copy of the broker's prototype? They are typically quite basic. If it doesn't allow for the desired plan design, you have a rationale for advising your client to adopt the volume submitter and investigate other investment alternatives.

Pages 12 and 13 of the instructions to Form 5500 provide a nice quick reference chart that indicates which schedules are applicable under various circumstances. Be sure and reference the footnotes that relate to unfunded and fully insured welfare plans.

The penalty was assessed under IRC Section 6651. The penalty is a percentage of the tax on the return multiplied by the number of months late. (I believe there is a cap on the number of months that are counted.) Of course the penalties may be removed or reduced if there is reasonable cause.

My guess is "Minimum Municipal Obligation".

Page 15 of the 2003 instructions indicates the following under the heading of "Signature", subheading "Trusts.": The return must be signed and dated by the individual fiduciary, or by the authorized officer of the trust receiving or having custody or control and management of the income of the trust. If two or more individuals act jointly as fiduciaries, any one of them may sign.

Just to make sure I wasn't spreading falsehoods due to a faulty memory, I reviewed the three most recent late filings (most recent late???) of Form 5330. In each instance a letter was received assessing penalties and interest. Also, in each instance it was related to Section 4971 tax (failure to meet minimum funding standard). Perhaps it is the type of tax that makes a difference. Perhaps I'm the target of some diabolical conspiracy. By the way, it's not paranoia if someone really is out to get you.

This has not been the case in my experience. Nearly all, if not all, of our clients who have filed Form 5330 late have received letters assessing penalties and interest.

CFR 2510.3-3(b) & ©

Is 411(a)(10) relating to changes in the vesting schedule applicable?

In my view, the most important aspect of the Jack and Jill example was already pointed out by Blinky in the second paragraph of his most recent post. The example is looking at deducting $50,000, but since that exceeds the individual annual additions limit for Jack, Jill must receive an allocation and will be benefiting. I suspect, however, that Lori meant the discussion to be more general.

Since there appears to be a difference of opinion, here is the reference given by both posters. To each his own interpretation. Q-4: What is the amount of a quarterly installment? A-4: In general, each quarterly installment is equal to the applicable percentage of the Required Annual Payment ("RAP"). Additional adjustments may be required in the case of a plan with an unpredictable contingent event liability. The RAP for any plan year is the lesser of 90% of the amount required to be contributed to the plan under section 412 for the current plan year (adjusted to the beginning of the plan year) or 100% of the amount required to be contributed to the plan for the preceding plan year. If the preceding plan year was not a twelve-month plan year, the RAP for the plan year is 90% of the amount required to be contributed under section 412 for the current plan year (See Example 3, Q&A-10). The amount required to be contributed to the plan for a plan year ("minimum funding requirement") is the amount necessary to avoid a funding deficiency as of the end of that plan year. This amount is generally determined by reference to the Schedule B filed for the applicable plan year. If the amount required to be contributed is restricted by the full funding limitation of section 412©(7), such limitation is the minimum funding requirement for such plan year. Contributions made for the preceding year are disregarded in determining 100% of the preceding year's minimum funding requirement and contributions made for the current year are disregarded in determining 90% of the current year's minimum funding requirement. An example of the calculation of the amount of a quarterly installment is provided in Q&A-10.

Table Manager I think that this is the updated link.

SoCalActuary: I'm guessing there was a typographical error in your post as you seem to be saying that the alternate payee already gave consent and would still have to give consent. Of course I may be guilty of a typographical reading of your post.

JDuns, A couple of points regarding your post: 1) SSA Pub. No. 16-004 (ICN 361752) dated April 2004 actually indicates that employers should not use the ITIN for reporting earnings on the Form W-2 for someone who was hired or worked in error. (See page 12) The publication does go on to say that employer's should enter all zeros in the Social Security number field of Form W-2. 2) This publication does not specifically indicate that this approach also applies to Form 1099-R and retirement plan distributions.

In addition to the prohibited transaction rules, you should also note that debt-financed property within a qualified retirement plan trust can generate unrelated business income which is taxable.

Thanks for setting me straight. I kept picturing two plans, each adopted by one of the related employers. Can I blame this on a long week to save face?

The deferral limit under 402(g) is an individual limit, so I think the ramifications of the excess deferrals are the same whether the two employers are related or unrelated.

http://benefitslink.com/boards/index.php?s...opic=23094&st=0

1. Reallocate to participants - This option increase the total amount allocated to participants, employer contributions plus forfeitures. 2. Reduce Employer funding - This option still allocates contributions plus forfeitures. The employer merely puts in less company money than would have been contributed if forfeitures were not used. As to your question regarding discrimination a few posts ago, I did not indicate that the allocation would result in discrimination. My emphasis was on the language that forfeiture are allocated to remaining participants, not forfeiting participants.

I would argue that if the forfeitures reduce employer contributions, and the contributions are allocated among participants, the forfeitures are being allocated as part of the employer contribution.

You might want to refer to the section entitled "Information That Must Be Provided" at this site.

...and document your position and actions for the possibility of a convenient case of temporary amnesia.

Section 1.401-4(a)(1)(iii) of the Income Tax Regulations provides that funds in a profit-sharing plan arising from forfeitures on termination of service must not be allocated to the remaining participants in such a manner as will effect the prohibited discrimination. My interpretation of this regulation would prohibit applying forfeitures to a prior year's contribution in at least some instances. For example, if the plan allocates forfeitures immediatly upon termination or distribution, under a prior year allocation scenario, it would be possible for a portion of participant's 2004 forfeiture to apply toward that participant's 2003 contribution allocation.

If I read tman265's post correctly, it is referring to using forefeitures to fund the contribution for a prior year. This does not make sense to me.