could be me maybe not

Maybe it's ok if you are "adding" a second formula? That is, if it is a "special contribution to special people"? http://benefitslink.com/boards/index.php?showtopic=27291 Purple monkey dishwasher

Isn't this year's "actuarial error" (if that is what it is) simply going to reduce next year's minimum and maximum deductible contribution (assuming a spread gain method)? So what is all the fuss about?

Good luck with that. I ran into a similar situation years ago. We were called in by an employee union rep to consult with a municipality about "switching" from an existing DB to a DC. One look at the DB actuarial report showed it to be maybe 35% funded. We said the current plan's status should be considered in light of future negotiations. The messenger took a figurative bullet and got sent off into the sunset real quick. That was simply not the union's problem. Underfunding was simply a debt for past contracted service already negotiated, agreed to, and provided. When that debt was paid was not the union's concern. That, in their minds, had nothing to do with future service. Actually, looking back at it, I find that thinking hard to fault.

"They should also be able to file their own 1040" Well, I complete my own 1040. But if I had complicated stuff I would pay for help. I think the same should hold true with a 5500. Simple filings should be self-doable. More complicated issues you need to pay for expertise. "Sad part is many plan sponsors who do their own 5500s get in trouble with IRS and DOL." But why should we let these agencies, that work for us, abuse good honest effort? Who was appointed God and set penalties at $1,200/day?. Who was the General Secretary of that junta? Why should taxpayers stand for that abuse?

It is fine as far as I know. I had a client who did a raffle in a similar situation. Nobody raised any flags then.

Then I would submit that the auditor is either being difficult or is very ill-informed. They want to do what is not required, but only part of it? And they want someone else to sign off on responsibility for assets when in fact nobody has undertaken such responsibility. Kind of like going to the moon and insisting that the man in the moon autograph your moon rocks. It ain't gonna happen. Seems a bit odd to me. I'd agree with you LVan

Why is an audit needed for a 403(b) plan?

"Come calling" is fine. But, no harm, no foul. They should be treated with courteousy and certainly not fined for making a good faith effort. And I am referring to the 5500 filing itself; not necessarily the administration. That to me is different. The DOL radicals have been clear on fiduciary responsibility and the need to hire experts in such area where necessary expertise is lacking. Read the paperwork notice stuff where the hours of study are itemized for 5500 completion. A snap.

A colleague has a client (my client also-different plan) that filed 1096, 1099 and 945 forms for about $5,000 in taxes in 2003 (or 2002 I'm not sure off hand). The (top shelf) software printed the plan name over the TIN so part of it was unreadable. Nobody noticed. A few months ago, the IRS' computer issues notice. After literally multiple dozens of hours later involving at least 7 people (it was not clear at first whether it was one plan or the other, whether it was a corporate or plan issue, etc), the IRS accepted the explanation of the error. The taxes had been paid timely. Only the form was partly unreadable due to the software error. All set. Except that the client called last week (I took the call and saw the IRS notice) and said the IRS was now charging a $12,000 penalty unless the unpaid taxes were paid within 2 weeks. For the same exact issue! Deja vu all over again. Imagine risking this type of dialoge with the IRS computers (and English as a foreign language "experts") for dozens or more clients with no tax liability? Not me, Harry. But otherwise your points are well taken.

Methinks it (FEDERAL taxes) is voluntary if not an eligible rollover distribution (subject to state rules). If that is not correct, I'd welcome correction. I think it is correct. Again I ask why Ashlea withheld FEDERAL taxes.

Do you disagree PiP?

WADR, I have a philosophical problem with those urging the need for a professional preparer. Shouldn't a taxpayer/plan sponsor be able to fill out a 5500 for a small plan? Is there anything in the instructions that says that a filer is expected to pay for professional help? The DOL used to (and perhaps still does) treat third parties like trash. They were persona non grata. Now they are an integral part of the EFAST process? Objection on libertarian grounds.

merlin, I think you are reading the Q&A's conclusion incorrectly. They are saying that it would be a violation to amend the formula. They are saying that instead you could ADD a plan or ADD contributions pursuant to 11-(g). They are cautioning against tinkering with the existing plan except as under 11-(g). kjohnson's comments are perfectly valid; but somebody needs to be there to defend against a potential challenge - years later. Not the safest course unless legal counsel is engaged long term. It is form versus substance but you need to be careful to maintain the proper form. This is something that you also need to be careful about with 11-(g) amendments.

Not all qualified plan assets are held in a trust. A plan with all assets invested exclusively with an insurance company need not necessarily have a trust. But if assets are CDs and stocks, why is it with an insurance company?. Or is it? You say all assets are with a brokerage house and a bank. Then yes, you need a trust. Specific questions 1 No. 2. Sounds like trust but we cannot be certain. Do NOT answer general assets. If the plan has insurance, or if some assets are invested in insurance, then trust and insurance is the likely answer. 3. You only need one Schedule P. Either can sign. 4. Probably not. 5. Correct it.

Hah. That Blinky fish is always getting himself in donkey doo doo by cutting corners. Bet he doesn't even file Schedule P. Bet he doesn't even file Schedule B for 401(k) plans. There might have been a massive contribution. Hah.

Ashlea, why did you withhold federal income taxes on a MRD in the first place?

1. Happy New Year, Mr. Burns. For perhaps the first time, I agree with you (about the rollover). 2. Ashlea, it is readily apparent that you do not grasp the "uncomplicated" issues. "Salary", for example, may be totally irrelevant to the matter. The source of the rollover is very relevant. Whether or not this is a "business" is also relevant. It is also perhaps foolish that this be a 401(k) plan as opposed to another type. Are you aware that there are other types? The deferral limit would be combined with the employer's 401(k) plan is there is one. This is called the 402(g) limit. If not, again, where is the rollover coming from? 3. It appears that Demo was being diplomatic, not challenging your integrity. A full time employee doing day trading (for other people presumably) and setting up a company to do this, and setting up a k plan just to get at rollover money is completely ludicrous. On the surface of course. Skepticism is warranted, IMHO. 4. Feel free to invite the "other rep" to participate. Perhaps he'll/she'll understand our questions.

And it is a good and important point. My comments were intended to opine on the absurdity of it.

Thanks quinn. Still took me a minute. Duh. Pension humor. Nothing like it. Actually, WDIK, kudos to you. Now I'll finish my day by singing Tom P's pension songs. Lock me up then. Stevena, both sets of figures seem high, yours more so. I do not doubt that you are worth your pay in a particular niche. Finding it is the key. Exploitation of the worker is the basis of our economic system after all. And automation may do you ill, not well, until you gain more experience and broader knowledge. I just think that 5 years with a QKA asking for starting pay in the 70s is asking to be shown the door real quick by most employers. I sincerely hope I'm wrong. ASPA sold a pay survey a few years ago. I meant to buy it. Never did. Never saw it. Can anybody quote from it?

Comments such as those by Paul Schultz paraphrased by penman should be dismissed out of hand because the majority of errors or unethical digressions are likely to be done by those not in attendance at such sermons.

I'm interested in this discussion, but am not getting the jokes. I have no doubt it is me. stevena, the figures you are discussing sound quite high to me, although I don't know what market figures are. But your comments about "fund company people" are right on target. Anybody able to give a range of market db administrator salaries?

pax, I think that is a (small) minority opinion, and not one shared by the IRS' talking heads.

I question the translation of the language in which the IRS tele-"specialist" was speaking! Aren't most of them students of the program "English as a seventieth language?"

I think that it cannot be done period.

GBurns, have you experienced a lot of DOL investigations of qualified plans? Helpful link. use that mrliao.