Lori Friedman

I wonder if the every-two-months payroll is even legal. Many (most?) states have labor regulations that address paydate frequency. For example, state law might require an employer to issue paychecks no less often than bi-weekly or semi-monthly, or perhaps monthly. If you think about it, these laws exist for a good reason -- an employer shouldn't be allowed to "sit on" earned compensation for an unduly long period

If the current value of plan assets is less than 70% of the current liability under the plan, the percentage must be disclosed in the SAR [ERISA Sec. 104(b)(3)]. I could use some technical guidance: 1. Is the percentage reported as "Additional Information", or is it disclosed in another section of the SAR? 2. The DOL regulations don't seem to prescribe any language for this disclosure. Can anyone suggest how the disclosure might be worded?

Someone was unaware that DOL will no longer accept a Schedule SSA attachment. That person created an Excel spreadsheet to report several hundred Schedule SSA individuals. For obvious reasons, I don't want to enter the data manually. I believe it's possible to import data into Relius from an Excel spreadsheet. If I'm correct, does anyone know how to do the import? I can't find any instructions in the Relius user guide.

I'm intrigued by your comment, because that hasn't been our experience at all. We never attach a Line 4i statement to Schedule H -- we simply attach the audit report, which includes the statement -- and none of our clients have received a DOL letter. Your own experience has been very different.

Does anyone actually use Relius' input form for reportable assets? I've found that the input form is difficult and cumbersome to use. Also, the investment list is a part of the financial statements, not a separate and distinct attachment to Schedule H.

A very helpful person at IRS telephone assistance just answered my question. He said that a plan never begins operating with 0 participants. Plan operations commence when it has participants. If a new plan's initial group of participants happens to be fewer than 100, file a Schedule I. Otherwise, file a Schedule H.

A new plan has 620 participants at the end of its initial year. Can the plan file a Schedule I, instead of a Schedule H? We determine a "small plan" by the number of participants at the beginning of the year. For a new plan, of course, the opening count is 0. Can I use Schedule I, or would that be cheating?

Could be. I don't know the personal and intimidate details of this marriage, and I certainly won't be asking.

Wrong. The sole proprietor wasn't asking for bottom-line income and deduction reasons. He had a subjective purpose -- he wanted to maximize the contribution to his own SEP account while denying a contribution to his wife.

A sole proprietor employs his wife. She's the business's only employee. The sole proprietor recently adopted a SEP, and he wants to make a contribution for himself, but not for his wife. I've never heard or read about any family exception to SEP participation. But, the FUTA exception for a family employee keeps popping up in my head, so I thought I'd post this issue just to be sure. Could someone confirm that there are no special SEP rules for a family member, and that the owner's wife is covered by the same rules that affect any employee?

Unfortunately, it's not unusual for the IRS to contradict its own published instructions. Form 8868 extends the time to file an exempt organization's Form 990. For quite a while, the IRS didn't require a signature for the initial (3-month) extension, even though the form's applicable section had a signature line and the instructions said to sign/date. Eventually, the form and its instructions were revised to comply with IRS policy. I believe that the IRS doesn't want signatures for automatic extensions. When you file Form 5558 to extend a Form 5500, the 2-1/2 month extension is now automatic. The IRS no longer approves the extension and returns a copy of the form.

I've been researching this one for about an hour, and I believe that WDIK's correct. Schedule C, Line 2(d) isn't asking whether the named service provider is a party-in-interest. Instead, the line discloses any relationship between the service provider and the (1) plan sponsor or (2) another party-in-interest.

My careless typo. Sorry about that. I meant to say: Form 5500, Schedule C, Line 2(d) -- "Relationship to employer, employee organization, or person known to be a party-in-interest".

I'm having an interesting discussion with an ERISA attorney, and anyone's thoughts or input would be appreciated. The attorney believes that Schedule C, Line 2, Box (b) can never be answered "None". She argues that the ERISA definition of a "party-in-interest" includes a "person providing services to the plan". If an individual or company is being listed as a Schedule C service provider, the entity is, by definition, a "person known to be a party in interest". This is the first time that I've ever encountered this interpretation. I've worked with countless Schedule C filers that, on advice of and review by legal counsel, answered "None" if the service provider isn't a plan fiduciary. What's your take on this?

Is it just me, or do these things look really creepy?

You don't mention which benefits will be provided by the plans. If you're talking about health/medical benefits, you shouldn't run into any problems if 100% of the benefits are provided through health insurance policies. Self-insurance benefits, however, are subject to nondiscrimination rules and might be included in the highly-compensated employees' gross taxable income.

Yes! You've jogged my memory! D is from Alvin and the Chipmunks.

For me, it's always been the shoe phone.

Very interesting, Blinkmeister. All these years, I've laboriously crossed out the wrong year, and typed in the appropriate year, on every single page of the return. What you're saying is that it's ok to enter the dates of the final, short plan year in Form 5500, Part I and simply leave the other pages as they are?

But, it's a real pain in the neck to do this manually...on every page of the entire return. Is there any way to get Relius to cross out the "2005" and type in "2006" automatically?

Ditto on Kirk's comments. I work with dozens of multiemployer plans. Some of these plans have hundreds of thousands of participants, but I've never encountered any plan with an in-house ERISA attorney. Each plan retains the services of outside counsel specializing in ERISA. If the plan's really fortunate, it gets to work with someone of Kirk's calibre.

What's your organization's exempt status? Is it exempt under I.R.C. Sec. 501©(3)? Yes, any exempt organization can sponsor a 401(k) plan, but only a 501©(3) organization can offer a 403(b) arrangement.

Yes. Actually, I've never encountered a 457(f) arrangement that covers more than one individual. Each key employee usually has his/her own agreement with the employer. Also, keep in mind that 457(f) arrangements aren't always planned and intentional; they're sometimes created accidently, when someone has a "clever" deferred compensation idea and isn't aware of the consequences.

Why is a 403(b) plan being audited?

It seems to me that the line between "mental health" and "physical health" has become very blurred and indistinct during recent decades. So many "mental" conditions have been linked to physical causes and can be treated with modern psychopharmacology.