K-t-F

What if the safe harbor is a 3% 100% vested non-elective contribution... that satisfies the TH requirement and the employer can add a discretionary contribution as well and be safe... correct?

Thank you... I looked in the wrong place... I appreciate your link

Plan sponsor is paying out terminated EEs. Broker is going to generate 2 checks for each EE being paid lump sum.... one is vested balance, other is withholding. The client is telling me that his regular bank will not receive the tax deposit. What are his options for making the tax deposit? (this financial institution will not make the deposit for him) Can it be mailed to the IRS with a coupon?

Well... If you are at Fenway Park hating the Yanks is a given (go Sox!)

huh... I apologize if I committed a faux pas... should I not discuss fees? I dont see how any price fixing could come from it. As for filing a 5310 for this client, I did give him the option and told him that I have simply filed a final 5500 for other clients.. but felt it was my obligation to tell him. I have never had any problems not filing form 5310.. but now that I have said it I am sure I will.

What do people charge to terminate a plan (basic PS plan with 10 participants) ? and, does anyone ever Not file form 5310... simply file a final 5500? Client is balking at my fee... maybe he should drop the cost of a root canal from $750 to $200, talk about a racket!

Ok Blinky... then I will tell the owners they have that option (rolling the $ into the other plan) if they dont want to roll the $ into IRAs. Honestly, I am not going to worry about it too much since once the plan is terminated it is out of my hands. Of course I am assuming that if they roll the $ into the other plan they have to offer it to the other participants in the terminating plan... cant discriminate now can we.

I am not going to instruct the participants to roll into IRAs... simply informing them that they can take the $ and run (less withholding) or roll into some other retirement vehicle and not pay taxes. What was meant by the $ going into the DB plan is... doesnt the addition of additional outside $ affect the balance of the trust as a whole and therefore the added $ will skew the calculations and reduce the expected contribution.. as if the assets had a large unrealized gain? or will the $ simply be part of the plan and need to be accounted for separatly?

Thank you... I will tell the client to liquidate and roll into IRAs. DB plan (if it is a DB plan) will be better off without the added $ I am gathering since it will possibly reduce the amount that can be contributed. On the other hand, if they are finding it difficult to fund the DB plan then adding the PS rollover will help them... correct?

An old PS plan that has had no contributions for years is going to terminate. The client has another plan (I think DB plan). Does he have to offer the participants the option to roll their $ into the remaining plan if they want?

When designing a plan, do many of you use a match formula more often than others? Recommend one over another? (I realize there are certain variables that dictate what a plan's formula should or could be) Have you found certain formulas (besides SH formulas) are better with regards to passing non discrimination testing? Finally, what is a good source for plan design? Thanks!

I was asked to and did speak in front of a NAPFA (National Association of Personal Financial Advisors) group in Boston (well, outside Boston)... I have solicited literally hundreds of CPAs in and around me. I think I am going around it right.. not too pushy.. make the connections and wait. I read a post somewhere on here where someone asked how many plans should an administrator handle... I was frankly surprised to read that many handle 100+... even alot more. I simply want to grow my business and be a little more comfortable

I have posted on the 401K board... maybe some of you have seen my posts. I have been performing TPA work for way too long. I took over a family business and now need to grow. I am activly pursuing the QKA (simply going in order) to put some initials after my name so I am taken more seriously. My Question: Suggestions where to gain new business... plans. I am soliciting local CPAs... financial advisors. I am presently a one man TPA firm administering 35 plans. My goal is to double (or more) my workload and move on from there. My niche is the small closely held corp.. SE individual. Any suggestions ??? any small plans people want to lighten their work load of? (This board doesnt get too much action... But didnt want to take up the 401K board....)

I read these boards daily to learn... I am amazed that the truly knowledgable posters know where to look... down to the "rev proc 2003-44 (Self Correction) part III section 6.02c" as Mr. Poje referrs... Now that I am persuing pensions more activly I find these boards invaluable. Just posting a "thank you" to all for taking the time to help and assist others who are less knowledgable!!

This financial advisor was trying make the start-up cost minimal. His proposed arrangement would be that once the assets reached a certain level the fee would top out at the fee schedule a TPA would normally charge. In that case the TPA isnt makeing tons of $$ on assets in a fat plan with barely any participants. Thank you for your input!

One more question... Thank you all for your patience. Financial advisor has asked if TPA fees could be based on the amount of assets... a percentage. As assets grow so would the admin fee. When asked why he asks he told me that he was told by an attorney that the SEC would label fees generated in that way to be considered "illegal commissions". I am not savvy with regards to SEC rules but don't see the fees to be commissions at all. I told him that as long as he disclosed his fee schedule I didn't see a problem... but that I would ask a panel of experts. Any thoughts ?

I agree...

I have established a few of these "Solo" plans. Up till now the possibility of rank and file EEs becoming eligible has never been an issue. It was spelled out to the sponsor that if an employee was hired that they would indeed be eligible to participate in the plan IF they met the requirements in the document. Typically the sponsor would make the eligibility requirements pretty lax... Here is the question: If you have set up a plan to have immediate 100% vesting and 0 years of service requirement... can it be amended to a TH vesting (2/20) and one year/1000 hour service when you see on the horizon that there are going to be other EEs who may be eligible to participate? is that discrimination?

huh.... well then.. I guess I may have been filing 5500s when I could have been filing EZs... not that I did anything wrong.. just a little more work.

You are right and I know that a "SOLO" is simply a marketing term and in fact it is a full fledged qualified plan. That said I have one question... To be eligible to file an EZ , can you have other EEs besides the owner partner spouse combinations? I believe the answer to be no. And if I am correct then the "Solo" plan that has EEs other than the employer who simply are not eligible to participate due to age and service requirements, that plan needs to file a 5500... correct? The < $100,000 "no need to file" exception is only for owner only plans that are eligible to file the EZ (not plans with no eligible EEs besides the owner)... correct?

Ok.. here are the EZ requirements: Who May File Form 5500-EZ You may file Form 5500-EZ instead of Form 5500 if you meet all of the following conditions: 1. The plan is a one-participant plan. This means either: a. The plan only covers you (or you and your spouse) and you (or you and your spouse) own the entire business. (The business may be incorporated or unincorporated); or b. The plan only covers one or more partners (or partner(s) and spouse(s)) in a business partnership. 2. The plan meets the minimum coverage requirements of section 410(b) without being combined with any other plan you may have that covers other employees of your business. See the instructions for line 14c for more information. 3. The plan does not provide benefits for anyone except you, or you and your spouse, or one or more partners and their spouses. 4. The plan does not cover a business that is a member of: a. An affiliated service group, b. A controlled group of corporations, or c. A group of businesses under common control. 5. The plan does not cover individuals of a business that uses leased employees. The BOLD points may be the financial advisor's leg on which he is standing. If the part time ineligible EEs do not participate (do not meet the eligibility requirements and therefore do not enter the plan) can the employer then establish a Solo K?

I have a financial advisor who is of the understanding that a client can have a Solo K plan as long as the rank and file EEs are not eligible to participate (don't work the required 1000 hours). I told him that if he has EEs that are paid on a W-2 then they must be considered and therefore a solo plan can not be used. Bottom line... if a Solo K can file an EZ then it can be a Solo K... Agree? if not, then it is a traditional 401K plan subject to ADP/ACP testing. If someone can spell it out better I would appreciate it.. I think that simply someone confirming my statement will be enough. Thanks!

I recently purchased a small book of business (about 15 or so plans) and inherited the Datair system with the plans. So far I like the system and the forms (5500) system that piggybacks the admin system. Relius is ( I think) more pricy than the Datair system. I dont have that much experience with either. I am only responding since noone has who uses the Datair system. So far the service with Datair has been excellent. I say that because I did not go through any formal training and when I have a question (no matter how simple) thay respond in a snap!

Is that the standard procedure.. if a plan sponsor fails to enroll an eligible EE the plan sponsor is then liable for the missed deferral and match (the missed EE will receive the average of each) even if the EE decides once enrolled not to defer?

To the participant that was overlooked? In essence the company is going to make the deferral for the participant and match it as well?