Bird

I don't have a problem with excluding by name, and would greatly prefer that to an irrevocable waiver.

I think if they are pre-87 after-tax contributions they can come out first, otherwise basis is recovered ratably. Hoping someone else can confirm.

Yes, probably having each sole prop adopt the existing plan would be best.

I agree that it's probably best to allow former employees the same benefits right and features as everyone else, however, I think that Reg. 1.401(a)(4)-10© would allow such a restriction as long as it did not discriminate in favor of former HCEs. © Nondiscrimination in availability of benefits, rights, or features. A plan satisfies section 401(a)(4) with respect to the availability of benefits, rights, and features provided to former employees if any change in the availability of any benefit, right, or feature to any former employee is applied in a manner that, under all of the relevant facts and circumstances, does not discriminate significantly in favor of former HCEs. For purposes of demonstrating that a plan satisfies section 401(a)(4) with respect to the availability of loans provided to former employees, an employer may treat former employees who are parties in interest within the meaning of section 3(14) of the Employee Retirement Income Security Act of 1974 as employees

Spousal consent is not required.

We give numbers too. I have a vague recollection that the annuity options can be described without numbers, but figured it was easier to keep doing what we've been doing. Certainly a lot of plans don't give the numbers.

Yes he can defer to the 403(b). He would have to request the excess deferral to be returned, presumably from the 401(k) plan, and show it as 2010 income on the tax return. It would be best to request the money sooner rather than later so the 401(k) doesn't refund it as an excess contribution and thereby cause a disconnect between his 1040 and the 1099s.

It also might be that they are reducing the benefit to 54% instead of giving you the full 100% that the QDRO appears to grant you. Quite a few missing pieces. If they didn't tell you how they came up with $205.15, ask them. Ultimately you're going to need more support from your attorney, and/or maybe an actuary, but feel free to post more info here so we can help point you in the right direction.

The problem is that these arrangements are very seldom legitimate. Only in rare circumstances should someone be paid both as an employee (W-2) and an independent contractor (1099), and that's when they are performing wholly different functions. That doesn't sound like the case here. The commissions should probably be reported as wages, implying that it might be appropriate to add X+Y for plan purposes, but since the employee is probably paying self-employment taxes on Y, Y isn't really the right number to use, but what is? Although the IRS would likely deem Y to be wages, I'd honestly be uncomfortable using X+Y for plan purposes because it's an awkward way to fix the real problem of misreported wages.

You're just trying to get the employee in before the 90 day eligibility period? If an NHCE I think I would do an amendment to waive it for that employee only and not worry about messing with prior service.

I asked an accountant about it and she looked at me like I had two heads (when I said the instructions seemed to say it did not go on 12 or 13). It seems there's no doubt that's where it goes; I just don't understand what the instructions seem to be getting at.

Good question. Our vendor has a special area for adding special provisions that are supposedly not "modifications" - not interested in debating the validity of that here as I understand they could be "modifications" and they are always minor and I am comfortable with them - so we feel they are still "volume submitter" plans and therefore "pre-approved" plans, whether we get a DL or not.

...but you can add a match not subject to testing as long as it doesn't match deferrals in excess of 6% of comp and doesn't exceed 4% of comp, and I believe that can't have an hours or service condition.

Interesting. That is what the instructions say, but my return includes deferrals in compensation (line 12 or 13), and I have to think that's the logical and right way to do it.

Yes. "For a short plan year, file a return by the last day of the 7th month following the end of the short plan year. Modify the heading of the form to show the beginning and ending dates of your short plan year and check box A(4) for a short plan year. If this is also the first or final return, check the appropriate box (box A(1) or A(3))." I mean, it doesn't say "use the 2008 Form" but it was too late then anyway (these are the 2009 instructions - it does go on to talk about short year 2008 filing which were sort of a special case due to the new form transition).

Yes

Dave, my thoughts are with you.

I just had one of those calls. It is helpful to share this info so at least we can sound like we're two steps ahead when we get the calls; thanks.

We just got one for 2009. I guess they are moving upward and onwards in their efforts to annoy us.

You can't terminate a k plan and start a new one within 12 months. You're letting the investment tail wag the dog - it sounds like what they really want is to have a managed account; I doubt whether they care if it is in an IRA or a 401(k). You probably need a new plan document that allows for the investments they want; it's a continuation of the same "plan" just with different investments.

I think that if the plan had all of the RMD language and did not reference the Code and Regs then you shouldn't have to amend it. But most plans seem to at least partially reference the Code and/or Regs and I would not be comfortable without a clarifying amendment.

Participants and (ex)spouses seem to think that "someone else" can determine "benefits earned between ab/cd/efgh and ij/kl/mnop." Sometimes it's more art than science and sometimes it is impossible. That's not really the Plan Administrator's job. Sometimes the PA will have records to go back and do that extra work, and sometimes not. Long story short; keep trying to get the records, failing that, I think you'll have to reach an agreement on a proper amount based on best estimates.

4 (death) The rollover should be 4G. It won't change anything, but that's what they want.

I think you put the gross amount in Box 1 and the taxable amount in Box 2a, assuming it's all paid in cash. I believe the taxable portion is eligible for rollover so taxes should be/should have been withheld. If that portion was rolled over then you need 2 1099s. I think Sieve is right that you further reduce the taxable amount by accumulated PS-58s.

I remember that PLR and remember discussing it...whether my conclusions are consistent, I don't know. But I think they are citing the 5-year rule to explain why it does NOT apply, since the surviving spouse had already taken several distributions, and they mention that the 5-year rule "generally" applies to distributions where there is no designated beneficiary. As for my logic, it is explicitly stated that non-spouse beneficiaries may not use the 5 year rule in the distributing plan and then switch to the life expectancy rule in the receiving plan; that is, the election carries over - Notice 2007-7. The fact that they spelled this out for non-spouse beneficiaries may imply that it is ok for spousal beneficiaries, I don't know.