Santo Gold

Both a PS and an MP Plan had an early retirement feature of age 55 and 5 YOP. The plans were merged a few years ago and I believe the merged plan showed an Early retirement age of 59-1/2. Is that permissible? Is the 55 and 5 a protected benefit or can we eliminate that? I don't think it should have been eliminated, at least not for the current participants in the plan as of the date of the merger.

If no action is taken the rest of this year, does the $500/$1,500 plan start-up employer credit go away as of 1/1/2011? Thanks

We prepared our final 5500 before noon today, but had 10 plans combination hadn't signed or registered to sign yet. We spent a lot of time with follow ups this afternoon and at 5:18, the final plan was signed and accepted. A little surprised as I expected at least one "you mean we had to sign the form as well as register" to slip by.

Thanks Tom. Try to keep those hours worked reasonable next week OK?

PS Plan with a 7/31/10 PYE. The plan has a 1000 hours requirement but no last day requirement. SS integration used for PS allocations. Q1: Can the 7/31/10 plan year be amended after 7/31/10 to allow for new comp? There would be 2 rate groups, one for owners (all HCE) and one group for everyone else. If permissible after PYE, what is the deadline to make the amendment (is it 2-1/2 months after PYE?) Q2: If it is too late to amend the 7/31/10 PYE. could we amend the 7/31/2011 PYE now (10/2010) before anyone has 1000 hours worked in the current plan year? Q3: Performing a 180, could we amend the 7/31/10 to pro-rata now (after 7/31/10)? doing so would only "hurt" the HCEs since it would take a greater overall PS contribution for them to achieve what they would have received if SS int was used? Thanks for any comments.

Company A acquires company B in October of 2010. Company A has a 401k plan, company B a SIMPLE IRA plan. Company A permits company B to continue with the SIMPLE plan until 12/31/10 at which time it will be terminated. All employees will be eligible for company A's plan in 2011. Questions 1) Can company A make the required SIMPLE matching contribution on the 2010 obligation in 2011 or do they have to make it in 2010? 2) Are the company B employees prohibited from rolling over their SIMPLE plan assets into the new 401k if they have not been in the SIMPLE plan for more than 2 years?

A large plan (100+ participants) needs an audit and gets the bill from the accountant. Can these costs be passed onto the participants and deducted directly from their accounts? Thanks

What if this wasn't the case that a deferral request was made but not implemented? That is, what if you had participants who were never given the opportunity to make 401k contributions, and yet the ADP is 0% because no one else in the plan contributed? Would the remedy be $0.00? Thanks

I have several plans with the same circumstances. I think you file with 0 participants and $0 assets. I would file since despite the FAB, the instructions do not list the above conditions as a reason not to file.

Are participants assets in a SEP or SIMPLE shielded from claims from creditors? A participant in one of these plans (he's not sure which one he is in) has some major credit card problems and was told by the collection agency that they could go after his SEP/SIMPLE. Thanks

Who would be more of an expert on the process involved in disclamining the plan benefit: an accountant or an attorney? Also, the plan document does not mention disclaiming. Does this have to be allowed in the document or is it something that can be done without being explicitly addressed in teh document? Thanks

This is probably something for an attorney to work out, but I would appreciate any thoughts or ideas. A 401(k) plan participant passed away. She named her 3 sisters as beneficiaries in the plan. However, she also had a will, which stated that all of her assets are to go to the children of her 3 sisters. Question #1: Does the will supercede the beneficiary form? Who gets the 401k account, the 3 sisters or their children? After the participant's death, the 3 sisters want to waive their benefit. Their intention is to have their children receive the 401(k) assets. Question #2: Can the sisters waive their benefits in the 401(k) Plan? Question #3: If they can waive, does 401(k) balance get distributed pursuant to the will (the children)? If not, where does it go to? Thanks

Can anyone help clarify what is meant in FAB 2009-02 that states: The contract or custodial account is legally enforceable against the insurer or custodian by the participant alone, without any employer involvement I'm hung up on the "legally enforceable" part. Does this mean that the conditions and terms of the account are between the participant and the insurer and that the particpants does not need or require employer involvement in regard to any ongoing or future transactions in the account? If the employer has to sign off as the Plan Administrator for loans and distributions, would that not meet this condition? Thanks

403(b) plan had allowed for both EE and ER contributions. In 2007, the plan was frozen. No new participants entered and now new contributions can be deposited. I have the asset information for 2009. As of 1/1/09 125 participants had balances. As of 12/31/09 117 had balances. Per Field Assistance Bulletin 2009‐02, individual contracts or custodial accounts that meet all of the following requirements do not have to be reported as plan assets (or in the participant count) on Form 5500: 1 The contract or custodial account was issued to a current or former employee prior to January 1, 2009; 2 The employer has no obligation to make any contributions (including salary deferrals) to the contract or custodial account after December 31, 2008; 3 The contract or custodial account is legally enforceable against the insurer or custodian by the participant alone, without any employer involvement; and 4 The employee is fully vested in the entire contract or custodial account. Items 1 and 2 are obviously met. #4 is true also. #3 I am almost certain of. So, if all 125 contracts met this exemption, then I have zero participants to report on the 5500. Would you agree? Also, if that is true, would I still file a 5500, showing zeroes or would I not have to file a 5500? Thanks

Can a sole proprietor obtain an extension on his tax return (normally due 4/15) that both extends when the form is due and when he has to fund a prior years employer contribution? If so, how late can that be extended? Thanks

Sole Prop.

A small doctor's office was recently sold to a large hosptial. The office has a 401(k) plan with new comp. The plan termination date was set as 3/31/2010 (calendar year plan). No one is receiving any compensation after that date. While the 3 employees all have W-2 comp. for 1/1 - 3/31, the doctor does not have a set salary. I believe he does take "draws" but normally it is later in the Spring when the claims/insurance goes through and he can be paid. The Plan is a non-elective safe harbor plan. He would like to try to do new comp. for the 2010 short plan year. But what would he use for comp? Do we just add up his draws? Can we use a good estimate based on either 2009 compensation or estimated on 2010? Can he not do this at all? Thanks for any help.

Is there an excise fee on missed employer contributions? I also just found out that now there were missing employee contributions too.

This is a SIMPLE IRA plan. I'm being told that the employer has either not made or deposited incorrect amounts into the SIMPLE plan for several years. The employee contributions seem to be fine, this is just for the employer contributions. Can the employer use an EPCRS program to correct or are those not available to SIMPLE IRAs? Is a 5330 needed, plus excise tax, plus lost earnings, needed as well? Thanks

This is a SIMPLE IRA plan. I'm being told that the employer has either not made or deposited incorrect amounts into the SIMPLE plan for several years. The employee contributions seem to be fine, this is just for the employer contributions. Can the employer use an EPCRS program to correct or are those not available to SIMPLE IRAs? Is a 5330 needed, plus excise tax, plus lost earnings, needed as well? Thanks

Since we have an IRS opinion letter saying that the form of the document is approved, does that mean "all is well"?

Unfortunately, what is shown is exactly what is in the document. I agree that I think it was intended to be used only for 1 individual, but that seems to have gotten lost over the years and now more than 1 person is being thrown into this group. I would advise that we use pro-rata in this group even if it doesn't say to do so. But I was just looking for opinions on whether anyone thought it is OK to give the folks in this group whatever you want since there is no allocation method shown. Just curious, does this violate the concept of "definitely determinable" benefits?

In defining the classification groups for our cross-tested plans, our document calls for group #1: "An allocation up to the maximum permissible amount under IRC §415". All other groups call for a pro-rata allocation among the individuals in each group. If there is more than 1 individual in group #1, would you interpret the allocation language to mean that you can basically give the individuals in group#1 any arbitrary amount? For example, we give the 415 max to one individual, $15,000 to a second individual, and $0 to the third individual. Granted, it all has to pass 410(b)/401(a)(4), but if it does, would this sound right to you? FWIW, Group #1 is always used just for HCEs. Thanks

Can allocation groups in a new comp plan be defined by name? For example: Group 1 = specific owner, Group 2 = specific owner, Group 4 = all other participants? Thanks

This sounds almost too simple, but I have to ask? If a Church plan accidently omits a few participants from sharing in the employer contribution, they have to go back and make those contributions, plus earnings, correct? Wasn't sure if there was a difference because this is a church plan (compared to a PS plan). Thanks