Kevin C

If this is a calendar year plan, I'd be concerned about whether you could really provide a compliant SH notice to eligible employees a reasonable period of time before the beginning of the plan year. The new match would need to be reflected in the SH notice.

PPA amendments are required by the end of the 2009 plan year. Heart and WRERA amendments are due later, I think by the end of the 2010 and 2011 plan years respectively. If the Heart and/or WRERA provisions are included in the PPA amendment, the PPA deadline would apply. Our document provider has a separate Heart & Wrera amendment that is available now.

http://www.relius.net/News/TechnicalUpdates.aspx?ID=484 About 2/3 of the way down, it says: If you don't see a version number, I would look for some of the PPA provisions, like rollovers for non-spouse beneficiaries, hardships for primary beneficiary or the extension of the distribution notice period to 180 days.

I read Rev. Proc. 2007-44, Section 17.04 as saying you should restate by 1/31. But the wording could be clearer if they intended it to be required even if Form 8905 is timely executed. If it was my plan, I would restate by 1/31.

It depends on what the plan document says. They are not required to allow non-5% owners to delay RMD's while still employed. You said she elected to receive her initial RMD. Did that election say anything about whether future payments could be suspended if still employed? It may also depend on how the participant's distribution is being paid. Did the participant elect to receive installment or annuity payments starting in 2004?

Your prototype document most likely allows amendments at the document sponsor level. If you adopt at the sponsor level and your interim amendments will be identical for each plan, you won't need the employer's signature on the amendments, unless the employer elects an optional provision in the amendment. Our current document provider took that approach. There is a note at the end of each interim amendment saying the employer doesn't need to sign unless an optional provision is selected. Corbel might have adopted some or all of the interim amendments as document sponsor. If they did, there should be a similar note at the end of the interim amendments.

How about correcting it as an "overpayment" under Rev. Proc. 2008-50?

That would be part of the amendment to remove the SH. In our VS and prototype documents, when you amend to not be SH, it also removes the previous selections in the remainder of the SH section of the adoption agreement.

This topic was discussed at length this time last year. My opinion is that if you amend a calendar year plan by 12/31/2009 to remove the safe harbor effective 1/1/2010, then your plan is not safe harbor for 2010, even if they already sent out a 2010 SH notice. The 30 day advanced notice requirement for stopping the SH contribution is part of the rules for mid-year reduction or cessation of the SH contribution, so it would not apply. The affected participants should be notified of the change asap. Otherwise, you will probably have an employee relations mess on your hands.

Sieve, Treas. Reg. 1.414©-2©(2)(iv) is one piece of the determination of whether or not a brother-sister group exists. All it says is that for a sole proprietorship, the owner of the sole proprietorship has a controlling interest in that sole proprietorship. One of such persons refers to the five or fewer persons ... from 1.414©-2©(1). Under common control is defined in In your example, unless A's percentage of X & Y is at least 80%, there is no group of businesses under common control that includes X, Y & Z. Look at example 4 in the regulations again. Your new example is basically the same as the relationship between A & W or A & Z in example 4.

Sieve, The reg you cited defines "effective control" for purposes of determining if while taking into account only identical ownership of the various entities, the same 5 or fewer persons are in effective control of each organization. It says the owner of the sole proprietorship is in effective control of the sole proprietorship. It also says more than 50% for a partnership in (iii), so 50% is not sufficient to have effective control. The only person with an interest in each of X, Y and Z is A. A owns 50% of X & Y and 100% of Z. X,Y & Z don't have at least 80% common ownership for (i), nor do they have more than 50% common ownership considering only identical ownership for (ii). Look at The situation between A and GHI in example 4 is basically the same as the situation between X & Z in your example. Notice they do not say A and GHI are part of a brother-sisted group together. **Edit: Sorry, the table didn't line up. Check the example in the regs.**

Sieve, I see X & Y as under common control. But I'm not seeing Z as part of it with the information you've given. Can you elaborate on how you get there?

How about an anonymous (John Doe) non-amender VCP filing? You can go all the way back to ERISA for a non-amender filing, so you can go back to the establishment of the plan.

The timing of the amendment can also cause it to be discriminatory. Under 1.401(a)(4)-5(a)(1) any change in the benefits, rights or features under the plan is considered to be a plan amendment. I don't think it is much of a reach to say that when the employer securities ceased being effectively available as a plan investment option, it was a change in B, R or F under the plan. Here is a B,R or F timing discussion from Rev. Rul 2004-10:

There is no requirement to do this, but the plan could provide for it. What does the plan say?

To me, Q&A 9 that Everett quoted clearly says you can't require the entire distribution to be rolled over. I wouldn't be surprised if you could get a determination letter with the provision your client wants. Disappointed, yes, but not surprised. One of our clients recently hired a law firm to write a document for them. The new document has a provision where the employer decides each year what total amount of in-service distributions, if any, will be paid. If the distributions requested for the year are more than the amount the employer decides to pay, everyone's requested in-service distribution is reduced proportionally. I pointed out that 1.411(d)-4, Q&A 4 prohibits employer discretion being used to deny a distribution the participant would otherwise be entitled to receive. The attorney's response was that they do it all the time and always get determination letters.

Depending on the plan document language, you may also need a written loan program listing the plan's rules for loans.

It sounds like shared employees to me, too. We had a client with a similar situation, except that their employees received paychecks and W-2's directly from each doctor. The plan really wasn't that messy. The Plan counted all the hours worked, but only the compensation paid by the doctor sponsoring the plan.

Look at section 6.05 of Rev. Proc 2008-50:

Can you provide more information? What kind of plan? Defined contribution or defined benefit? Is the participant's vested benefit worth more than $5,000? Are the attorney's fees more or less than the value of vested benefits? What kind of Court? Do the plan provisions require the participant to receive a distribution now? Is the participant eligible to receive a distribution now?

You will want to read the recent guidance on Rollovers as Business Startups. What you are describing sounds somewhat close to the situations discussed in the guidance. http://www.irs.gov/pub/irs-tege/rollover_guidelines.pdf From page 6:

If they didn't file on time, we recommend DFVC. Outside of DFVC, I thought they were doing penalties of $25 per day, but the DOL website says $50. We usually have a client or two each year that files on time, but gets a letter saying they didn't file. So far, they have been satisfied with a newly signed copy of the filing and the client stating when the filing was mailed. Although sometimes it takes a letter or two to straighten it out.

In the last year, we got one in about 7 months and another in about 10 months. We are also waiting on a letter on the termination of an ESOP that is 18 months and counting. That one was about 14 months before we heard from the IRS and 2 months since the agent told us the letter would be issued "shortly". For an estimate, I agree with rcline46. Tell them probably a year.

How about 1.401(a)-20, Q&A 3? Assuming the plan has no annuity option, the full vested accrued benefit must be payable to the surviving spouse, unless the spouse properly consents to naming another beneficiary. I'm guessing there was no such spousal consent, since you didn't mention one. The plan provisions should also reflect these rules.