RayJJohnsonJr

I would like to thank everyone for their input. Thanks to your help, we found the authority in the document to Cash him out, so that's what we did. Thanks again all, Rene

I'm not sure what you mean by "plan has an annuity option." Do you mean at NRA the participant can elect a life annuity, or J&S, or 10 year certain annuty? If so, then, yes, the plan does have an annuity option. Also, I don't see how the money could be moved to an IRA without the participants signature? Thank you all for your input.

We're terminating a 401(k), everyone has been paid out except 1 guy with about $2,000 in the plan. We've talked to the guy, sent him election forms on numerous occassions, and had the business owner call him, but he won't budge. The Plan Document does not include provisions for force outs. We want to file a Final 5500 but cannot until we get this huy paid out. What can we do? Thank You!

Thanks y'all. I'll tell his to take his RMD and move the old 401(k) to his current 401(k) this year. Thanks again!

An employee (non-owner) turned 70 1/2 this year. Since he is still working, he does not have to take an RMD. However, he has a 410(k) account at a former employer. If he transfers his former employer 401(k) to his current employer 401(k) account can he avoid a RMD from the former employer 401(k) account this year? Next year? Thank you!

Thanks everybody, I see I'm barking up the wrong tree.

Thanks y'all. OK, what's a BRF? Is there any additional match that could be made without causing problems

OK, why can't you do this? A young business owner makes max comp $245,00, deferred the max, $16,500, has 10 employees, who deferred between 5% and 12% of pay, and the plan used the Safe Harbor match($1 per $1 to 3% and 50 cents per $1 to 5% of pay). So, if the plan allows an end of year discretionary match, why doesn't the employer decide to match deferrals greater than 5% of pay up to 7% of pay (since the SHM matched up to 5% of pay) with a $5.24 per dollar match. That way the business owner gets $49,000 total ($16,500 def, $9,800 shm and $22,700 non-vested match). The cost to the employer is that 2 employees contributed more than 5% of pay and wind up getting $8,786 total.

An employer fell behind in depositing employee deferrals into their 401(k) accounts. This was due to some employee turnover in the employer's accounting department and the problem has just now been recognized. The question is: What interest rate should the employer add to the employee deferrals due to the fact that are being made late? Thank you, Rene

I would like to thank everyone who replied, and apologize. For some reason, I stopped getting email notices when someone replied to my post, I don't know why. I figured no one was interested. To Mike Preston: Thank you, but an out-of-work actuary contacted me by email and handled the IRS negotiation with me. It looks like we can amend The Plan to a regular 412 DB since inception and avoid any loss of tax deductions for the client. The Plan was fully funded with Annuities, no life insurance. Why the IRS picked on this Plan is a mystery, but once they get hold of a 412(i) they seem to always reach the same conclussion: amend to regular 412 DB or unwind The Plan. The 1st things they always attack are, 1) The 1st year premium was not paid during the 1st year of employee participation, 2) The premiums were not level, 3) The Annuity monthly income at NRA does not equal the employee's Plan benefit at NRA.....Therefore, Plan is disqualified for 412(i). Thanks again, Rene

THANK YOU! Belgarath. I missed that? Rene

Hi, I am searching for the help of an enrolled actuary. I have contacted several for help, but none were willing to assist. The IRS wants a 412(i) Plan that I installed and administer either unwound or retroactively converted to a regular 412 DB Plan. It is a 1 participant Plan with 4 contribution years (2003 through 2006). What we are trying to find out first is the amount of contributions that would be disallowed (if any) when calculated as a regular DB by an actuary. Attached are the facts of the plan including Salary and Benefit History as well as Contribution and Earnings History. Of course, I am willing to pay for services rendered. Thank you, in advance, for your assistance. Rene J. Neyrey, CLU, ChFC [Edited to remove participant name from attachment] Historical_Factsheet.pdf

Gary, Was this 412(i) unwind resolved and if so, how? I am having the exact same situation right now, Thank you

Thank you, Larry, Rene

Spouse A is a physician, is in private practice which has a safe harbor 401(k). Spouse B is a physician, is in private practice, and has a cash balance plan. Spouse A and B jointly own a third business, 50/50, a healthclub, which is covered by Spouse A's safe harbor 401(k). Is there a controlled group issue with regard to the health club? Is it required to have a cah balance plan equal to Spouse B's plan?

I'm looking for an imaginative solution. In the 401(k) we manage (Acme Widgets) there are 2 owners, their sposes, and 2 unrelated employees. All employees defer into the 401(k) since inception in 2006. Here's the problem: one of the spouses made $8,333 deferrals in both 2007 and 2008. She also made deferrals into a 401(k) Plan ata bank she also works at if $15,000 in 2007 and 2008. We just fouk this out. She is under age 50. Can anyone think of a corrective action that has the least adverse consequence? Thanks to anyone who can come up with a good solution.

Thank you both for your input and helping me clear this up. What I still have trouble understanding is, if the DC contribution limit is $49,000 up to 100% of pay, when does thw 100% apply? Does it apply to a 1 employee corporation if the sole employee participant has a $50,000 W-2? When does the 25% of covered payroll apply and when does the 100% of pay apply? Thanks again.

Thank you, Mr Powers. If the attorney had incorporated rather than being self-employed, could his company have made a $49,000 Profit Sharing contribution, assuming a W-2 greter than $49,000? Also, could the attorney have put in a Defined Benefit Plan for 2009 and obtained a larger contribution(assuming DB limits are followed)? Thank you again, Rene

Hi, The attorney is a partner in a large national law firm owning a partnership percentage of about .25%(1/4th of 1%). He also does outside consulting work in the education field earing about $125,000 in schedule C net profit. At the law firm, he deferred $22000 into the law firms 401(k) plan. It is my contention the he can also contibute up to $49,000 into a Profit sharing Plan established by his consulting practice. Am I wrong? Thanks, my time is running out 4/15.

Yes, all assets have been distributed.

The employer terminated their 401(k) as of 12/31/09 and implemented a Simple beginning 1/1/10. Do they need to restate the 401(k)? Thanks, Rene

Here goes: 10 years ago a broker convinced a corproration and an executive to this. The corp bought a $600,000 life ins. policy on the executive and paid the premium by deducting it from the executives bonus pay. The corp. is the policy owner, and the executives wife is the beneficiary. No deferred comp agreement was ever written. No split-dollar agreement was ever written. The executive dies and his wife gets the $600,000 from the ins. co. How is this to be taxed is the question. Thanks, Rene

OK, here's where we are now: The IRS Actuary says(maybe conceding that DC to DB conversions are allowable): if you did a DC to DB conversion of $500,000, which created a new DB benefit, and the DB is a 412(i), the transfer flunks the 412(i)(2) requirement of level premiums. I think that is an inexperienced, uneducated position. But what code or regulation prooves that it does not violate the 412(i)(2) level premium requirement(other than common sense)? Thanks Everybody, Rene

The CPA asks me" If Ms X has 2 full time employers who offer 401(k) plans, can she contribute the max to both plans since the employers are unrelated. Stupid me thought I knew the answer to be YES since practically every other kind of contribution(PS,MP, DB) would be a YES. Of course I was dead wrong. This went on in both 2007 and 2008. ANY IDEAS WOULD BE APPRECIATED! Sincerley, Imbarrased

I formally apologize for reposting it. I am sorry I had not previously seen it. I guess my question is, if it's true, can enough people read it? Is anyone taking action? People are being steamnrolled. Is he wrong or is this not an outrage?