Bird

No I don't believe so. 404a5 tells participants what they are being charged; 408b2 tells fiduciaries what covered service providers are making. There's a difference.

The 2013 instructions for line 7 still say : Yeah but that is because they have clarified what goes into 6a and 6b. Maybe I shouldn't have bolded the comment; that has been superseded.

Ultimately...it seems not to be a big deal. OK, so if we assume the government continues to subsidize admin costs, folks can save on some fees. But (while I'm very fee-conscious and recognize that small differences in fees can add up), you're probably not talking about a lot of dollars for small savers. And if you read the comments, you see that it's just an opening for crazies on both sides to vent their misdirected nuttiness. This country is collectively f-ing stupid.

I don't like it. Ultimately, someone has to sign documents, and it seems to me you'd have to prove that the person who was signing actually had that authority, every time something had to be signed. Dealing with investment companies is hard enough without giving them an excuse to cause a hassle.

Correct, asap 12-17 noted that the IRS had an FAQ that the instructions were to be updated; whether that happened with the 2012 form or 2013 was the first year I don't know: FAQ 4 ‐ What are the planned changes to plan year (PY) 2012 form and instructions? The PY 2012 form date will change to 2012. Beyond that there are no substantive changes to the form. The PY 2012 instructions will be clarified in a couple of places. Most notably, the instructions will be clarified to state that lines 6 and 7 will only deal with Code A participants; therefore, line 7 does not have to equal the total number of participants in Part III.

I'm not sure that it's a dual eligibility issue but it might be. I always considered this to be under the "pattern of amendments" clause in 401(a)(4) somewhere (I think) and it smells pretty bad. Even thought it is something that's done all at once, you are effectively amending the plan. I don't let people do it in these circumstances.

For that line, we use whatever fees show directly on a statement, be it flat fees or some kind of advisory fee that is taken from the account. If they are incorporated in mutual fund fees and don't show on a statement, we don't show them.

You are correct; there (absolutely positively) no last-day requirements allowed in SEPs. Ask the advisor and/or CPA to prove it.

No doubt about that; this is not a one-man plan.

I would think that even though there is a controlled group, the differing eligibilities would allow for the SEP contribution, if she is using a prototype, which I think is the norm (and could be re-adopted now anyway).

But if she was in business before Jan 1 2013 she can use an eligibility requirement calling for service in one (or more) prior years, and count all of her compensation, with no one else being eligible. Don't let a bad question give you a bad answer.

fwiw...all the talk about the regs was a distraction. It all boiled down to the document, and in particular, the definition of "Employer" contribution, and while deferrals are technically employer contributions, they're not for this purpose.

IMO (and I don't think there's any doubt), the employer must make the contributions. The plan itself has the conditions for receiving/not receiving contributions, and I am sure there's nothing in the plan that says "...unless the employee waives the right to such contributions."

Sounds like the individual and/or broker messed up. Direct rollovers are usually initiated by the receiving IRA, which leaves no doubt about the nature of the transaction. If the receiving account is not an IRA, well...it's not an IRA. I don't know how the distributing custodian could be at fault.

I dunno, I think I could make a case that she loaned the plan money, so it should pay her back. It's a PT and I'd make her pay the excise tax to teach her a lesson but I don't think there's anything wrong with the approach.

We looked at this pretty carefully for the annual asap on recurring deadlines and concluded that the deadline is the 15th, period.

Participants can just leave their SIMPLE IRA accounts where they are after the plan is terminated. If they choose to move the money - anywhere except to another SIMPLE IRA account - within two years, they are subject to the penalty.

We do the same thing; I don't think there's any harm in telling you it is Colonial Surety. The bonds are a decent deal if you get the 5 year prepaid ones. Being able to do it for them (clients) is excellent. We do get a "finders fee" (I think that's what they call it, which we don't care about but I suppose it helps cover the time on the paperwork). Be forewarned that they crap up the process and try to trick you/clients into buying fiduciary liability insurance; you have to say "no" several times. "You want fries wit dat?"

And for my plans, the fiduciary is asking me for help interpreting. I don't think it's all that difficult actually; the conservative answer in this context is that amounts withheld from pay become plan assets no later than 7 business days, so I believe you could use that date with no trouble. Personally, I'd be comfortable using the withholding date, because...well, who's going to give a crap about it? The point of the rule is to make people wait a little bit, apparently (although I'm not sure what this accomplishes), and if they wait 27 days vs 31 or whatever, and no one objects either way, then go for it. It's not like the IRS or DOL are going to be checking the loan dates.

My notes say that it is taken off the top; that is, before the deduction for 1/2 of SE taxes.

I think in theory what you propose is ok, but the "just" part is easier said than done. Getting the custodian to return SIMPLE money as anything other than a regular distribution is...challenging.

You can set up a SH 401(k) as late as Oct 1. I think what we usually do is make the plan effective retroactive to Jan 1, and the 401(k) part effective Oct 1.

Thanks Kevin for continuing to beat the drum. I don't have as big a problem with the IRS' position as I do with Sungard, ASPPA et al continuing to circularly reinforce a rather draconian position.

In my book his compensation is 140,146. Sounds like he is non-key.

Well, you have to deduct half of the self-employment taxes no matter what, so if you haven't done that, then you're under $150,000 after you do. Now, if someone is a little over $150K after the SE tax deduction, then you do still have to subtract the contribution to get plan compensation, so I guess it depends on whether they are getting a regular contribution if they are key, and if so, then it would make them non-key, but does it matter at that point, since they did in fact get a contribution (presumably 3% or more). If they aren't getting a contribution if they are key, then I think that's the end of it; they are key.