Spencer

Thank you both!

I have a client who is changing from a Parntership to a Professional Service Corp. The owners will remain the same. Can I just amend their current 401k and 125 plan docs to show a change in the entity type? or should we terminate the current plans and start new ones? also, besides the owners being able to participate in the 125 now, what are the advantages (as far as these benefits are concerned) in switching from a partnership to a PSC? Thanks!!

Thanks, Andy. freeerisa.com did not have 2008 Form 5500 so we wil use option 2.

Client just received IRS notice stating they never received the Form 5500 for 2008. Client does not have signed copy in their files. They were not our client then and all HR personnel has changed. However, owner says he remembers signing form. I am not comfortable with client backdating signature. So is their only option DFVCP? any other thoughts? Thanks!

Thank you!

Client has 403(b) plan. Plan doc says defintion of comp includes deferrals. Payroll company deducted cafeteria plan deductions and then calcuated 401k deferrals on that compensation (comp less cafeteria plan deductions). To correct, employer needs calculate difference and make up deferrals plus lost earnings. And correct match as well. Right? Thanks!

mbozek, thanks. I advised against it and detailed why. But client is still really interested it. Aapparently, this guy with the "CEO Plan" has a answer for everything.

so it can be done, but is anybody in TPA industry recommending them? I can only find people who are selling ERSOPs pushing them.

I've gotten a question about ERSOPS. Client wants to do it through this plan http://www.theceoplan.com/ Any recent guidance? or thoughts on these?

Yes, the partners returns. I suspect you are right - checks are sitting on someone's desk, waiting for further info. CPA is anxious to resolve matter and wants to stop payment and re-issue checks.

Partnership issued checks for partner deferrals upon completion of the K-1s in early April. Financial institution still has not received checks. Checks were not mailed return receipt so there is no tracking. Tax returns have been filed, showing the deferrals. Can client stop payment and re-issue the checks to correct this? I know we may have an issue with DOL and the 7 day deposit rule (it is a small employer), but for now, client's concern is how to fix this as it pertains to IRS deductability. Thanks!

Ultimately, it is the employer's responsiility as plan sponsor, but I would certainly expect the vendor to correct their error, contact over-paid participants and attempt to re-capture and if that is unsuccessful, the vendor should make the plan whole. If vendor refuses, then the employer should make plan whole. And seek legal counsel.

Employer has a SEP, but has not made contributions to rank and file ees for a couple of years. He did contribute for himself. Can he use an EPCRS program to correct or are those not available to a SEP? Thanks!! EDIT: I just saw the same question below. I don't know exactly how many employees were missed or how many years this goes back. I will provide more info as I get it. Thanks.

I do not work with non-qualified plans, but client has asked if the executives who receive deferred comp under their NQDC plan can make 401k deferrals when the deferred comp is paid to them? Thanks!

You are correct, Tom. There is no discretionary PS and no additional match. Just deferrals and the SHNEC.

No, not cross tested. Actually, the plan doesn't even allow for a discretionary contribution. This document has an option to exclude HCEs from the SHNEC, but they didn't check that. They didn't exclude HCEs or Key EEs - it specifies "officers". It's just odd.

I am reviewing prior plan documents for a new client. Officers are excluded from the Safe Harbor Non-elective contributions. I can't figure out why. The client doesn't know why - just said it was originally setup this way. The plan is Top Heavy, but the SHNEC satisifies the TH min. Any thoughts? Thanks!

just in case anyone else has this issue, the problem was the security settings on the PDF of the accountant's opinion. There was no password required and the accountant assured me there was no security, but in reality one of the security settings had been enabled. The DOL rejects attachments with any form of security.

Published planbook with attachments (accountant's opinion and schedule of asset at YE). There were no validation warnings prior to submssion so I submitted to DOL. DOL returned an error message, "Filing Unprocessable". Which I understand is NOT considered filed. But I don't know how to correct. I have no idea why the filing was unprocessable. The Accountant's Opinion and Schedule of Assets were attached as Internal attachments. I can view with no problems. There is no security on the files. any ideas? Thanks!

yes, they changed. This is real pain the rear.

nevermind. thanks

try www.salary.com, use the title Pension Administrator.

I have this exact situation with a client that has over 200 ees. Financial instituion has advised them that if they reverse the contrbutions and submit a corrected deposit, there will be a prohibited transaction due to late deferral deposit. The error was made by the payroll company. Client is in the process of switching from weekly to bi-weekly pay periods. The error was for pay period ending 05/28 and the correction will be done this week. Any thoughts?

It was a bit frustrating having to prove I was right, but thanks to input from here and ASPPA members, I had no trouble convincing my boss, the client and the broker that this could not be done. Thank you all!

Now the financial advisor wants me to contact the financial instition to have the deferrals made in Jan and Feb 2009 reversed. Not reclassified, reversed. AND the Top Heavy was deposited by the client on 06/07/10. They want that reversed too. I have advised that this would be very obvious that the intent was to avoid the TH minimum. The plan was TH at the end of 2008. The owners (key ees) deferred in 2009. The participants did accrue the right to the TH minimum already. Anything we do to try to avoid the TH minimum would be unethical. Please help list the reasons this is wrong so I can convince both the client and the financial adivsor (and my boss) that we should have no part of this. reversion of assets no distributable event violation of anti-cutback rule not following the deferral elections breach of fiduciary duty