Leopurrd

Here is the situation: You currently have Schedule C income, sponsor a SEP plan and contribute 42000 for the year to it (sole proprietor - income substantiates contribution). Now, you form an LLC (still single member) and are advised by a bank that you can open a Solo(k) and contribute another 42000 to this plan. Is this correct? Referencing section 415, it limits the annual contribution to 42000 for all plans the "employer" sponsors during the year. Perhaps this is a situation of "who's the employer" where the LLC that is formed is considered a new employer, thus making the second maximum contribution possible? (I'm thinking no - just a change in entity, not employer). Your thoughts (and code references) are appreciated! *Note - the LLC and Sole Proprietorship offer the same services.

It's my understanding that the Schedule P sets the start date for the statute of limitations.....so no Schedule P, no statute of limitations - you may want to be sure that the prior administrator dotted all I's and crossed all T's!

You may want to visit www.403bwise.com. It's a very resourceful website if you are trying to find out more about 403b plans. In particular, the FAQ's are great for someone who is new to the 403b vs 401k arena. http://www.403bwise.com/faqs/index.html

You can find some answers using the search function - Here is one link that looked promising: http://benefitslink.com/boards/index.php?s...t=0entry97935 Vicki

Hi, Just a thought, but why don't you terminate the PS plan (All employees are 100% vested anyway due to partial term rules) and then start up a new 401k for the company as of 9/1? Then, the owners could roll their ps balances into the 401k AND could possibly max out in profit sharing since they would be the only ones eligible. you also wouldn't have a problem with coverage since only HCE's benefited. (However, you would have a top heavy issue if they hired any new employees.) I don't think starting a 401k right after terming a ps plan is an issue, only when you term one 401k plan and immediately start another, but i could be wrong. I'd like to have someone else on the board back me up here..... Also, one thing that worries me is your sentence about selling the "Assets" and all the employees went to work for the other company. I'd be sure you didnt have a controlled group issue before staring work on the plans, if you haven't considered this yet?? You want to act quickly on this though - safe harbors have to be in existence for at least 3 months of the year if its a first year/partial. Hope this helps! Vicki

No Name and Blinky, Thank you very much for your responses. It cleared up the questions. I read more info over the weekend and realized that I was clearly misunderstanding the situation (as I said, I'm not very familiar with DB plans!). Blinky, FYI, you are correct in your thinking. Thanks again! Vicki

Hello all, I've found this board to be very helpful in the past, so I'm hoping to try my luck again today. I'm relatively new to DB plans. I was asked to do some research regarding a small overpayment in a calendar year one participant DB for 2004 (approximately $500.00). The funding was made based on estimates from the actuary, but turned up lower than the expected at year end with actual information. I've read prior posts and came across one that referenced the full funding limitation and irc 4973 (if I remember correctly). From what I've read, IRC 4973 states an exception to the DB funding where the employer can elect not to include contributions except above the calculated full funding limitation. Would anyone be so kind as to help me with the following: 1. How to calculate the full funding limitation (hope this isnt asking too much) 2. Explanation of the exception/is my understanding correct? 3. How would this affect the corporate return for the client - I'm assuming if the contribution is limited to above the full funding that is all they can expense on their return? Thanks in advance, Vicki

As a side note, per our Form 5500 prep manual from Corbel, it states that on the Schedule A, you can list "Information Not Provided". Supposedly the DOL will be following up on the insurance companies not providing this information??? Vicki

I took both the DC 1 and DC 2 last Nov and passed easily, and I only have about 4 yrs exp in TPA work - like a prev. poster said it depends on how long you've been working in the field. You'll probably have a good idea on how comfortable you are once you get the study guides in. It IS possible, though. Good Luck! Vicki

Thanks for the replies - I was just curious because we had some issues with hardware upgrades on this - it's nice to know they've decided to wait on this Vicki

I'm thinking he means that you can't use their K-1 as income, it would have to be taken on a W-2 in order to include it in the plan..... Vicki

SJ, Why do you think the oracle upgrades will no longer be required? I don't remember seeing anything from Corbel on this? Vicki

you are correct. you could always switch to current year if adp would not fail that way? also, as an fyi - when using prior year you should never set up a disc match until the year they want to use it - this way the "new plan rule" (not sure of the actual name) can be used for the acp test and the hce's can get up to an average of 5%. Vicki

I agree with JQuazza. The employEE is fully responsible for the loan repayments, not the employER. However, I'm curious as to how the employer will handle the situation.....will they do as suggested with the taxes/penalties/etc??

We're at 9.1, service pack 3. No issues here. I am also curious about 10.0 - I know that there are some major hardware upgrades to be made at 10.1 so we've held off going to 10 at the moment..... Vicki

I'm preparing letters to locate missing participants in a terminated plan using the IRS Program for 49 individuals or fewer. I was not provided the last known address, but it asks for it on the program instructions. Does anyone know if this is a required component of your letter? It seems like a moot point to me since the address of record is incorrect..... Thanks! Vicki

kjohnson, Thank you very much for your reply! I believe the plan does NOT have any QJSA options, so we are good to go. You learn something new everyday! Thanks again, Vicki

Hi everyone, I was hoping that somewhere out there among all your expertise I would find an answer to this! I have a 401k plan that terminated late 2003. Client has yet to pay out a few people. The one in particular I am worried about is a participant - still local - with a balance over 5,000. Distribution packets including special tax notice have been mailed and never returned. The client knows the participant still lives there, they just won't respond. It is necessary to pay them out ASAP. All others are small balances that can be easily dealt with. Any suggestions or anyone else know about anything the IRS will NOT approve? Our approach is that the spousal consent over 5,000 was not made to hold up a plan termination and perhaps an IRA rollover would be acceptable under a plan audit, if that ever may happen? Thanks for any advice you can give. Vicki

Just a thought to pass along, When I attended Corbel's X-Test class last year, they mentioned that you could amend the plan to allow for the one person who was messing up testing to be in their own rate group (by name) - could you do this and lower her %? I wouldnt think that would be discrimination per se? I know it sounds weird, but according to Corbel if they have the appropriate fail-safe provisions in the doc it is allowed. HTH, Vicki

Just a follow up question to this post, if you don't mind.... We received a letter from a client due to late filing although a reasonable cause letter was sent. (obviously not accepted!). The first sentence on the IRS Notice stated something like "this is to follow up on correspondence previously sent to you by the DOL". Does anyone know if this is just part of their form letter, or did the DOL really send correspondence? WE followed up w/ the client and they said the DOL did not contact them in any way. We only question it due to the fact that you cannot file DFVC after being contacted by DOL...... Thanks! Vicki

WDIK, makes sense. Sorry about that! I guess what the issue is that bottom line, the employer wants to match on everything, but the deferral on the bonus. the original idea was to exclude bonus from comp, but that obviously won't help. And, I think that excluding only the deferral on the bonus may be discriminatory. Do you know of any way to get around this with a prototype doc? Thanks for your response.

Hi All, Long time lurker, first time poster! I have a client who wishes to exclude the bonus from their plan. For compensation purposes, I can do this because they are on a non-standardized prototype. But, they also want to exclude the deferrals on this bonus from their match calculation (they do a flat % of deferrals, no cap.) Is this allowed on a prototype document? I've tried Sal's books and found nothing; maybe I'm just a horrible researcher. My opinion is that they would not be allowed to exclude the deferral, but then again, you can exclude catch up from the match calculation...... Thanks for any help you can give! Vicki