E as in ERISA

You can't roll cashouts less than $1000 nto an IRA because vendors won't accept them without a signature.

Oops! I agree that the 6621 rate, etc. is appropriate for the 5330.

Please clarify the question. Assume facts as follows: 401(k) deferrals of $10,000 that should have been deposited by 2/15 not deposited until 3/15. Rate of return for the month is 1%. Therefore, $10,000 plus $100 earnings should have been paid to plan. However, the additional $100 was not calculated and deposited until much later. The original $10,000 late deposit is not the amount reported on the 5330. It is the $100. (See the discussion of loans and the example on Pt IV of the Form 5330). So is the question whether earnings on the $100 is also reported?

I agree with R Butler. Read the 5330 instructions in regard to loans.

A permanent suspension (e.g., closing) is probably not a blackout. A temporary suspension is. So the mapping into the new fund could be. It depends on how soon participants can change out of the new investment.

That is also my understanding -- even if the receivable did not exist.

Possibly some form of "health savings account"? (Try googling that term on this web site). Requires that the employee be in a high deductible plan. The money could be withdrawn tax free later.... if used for medical expenses. And possibly withdrawn earlier if used for medical.

A standardized plan may have a last day requirement -- but it can only apply for those with less than 500 hours. The "generally" is a reference to the 500 hour exception. How about the language in the IRS' List of Required Modifications for Defined Contribution Plans: "25. Document Provision: Statement of Requirement: Profit-sharing plan -- definite allocation formula, Regs. §1.401-1(b)(1)(ii), §1.401(a)(26)-6(b)(7), §1.410(b)-6(f). Sample Plan Language: Employer contributions will be allocated to each participant who either completes more than 500 hours of service during the plan year or who is employed on the last day of the plan year in the ratio that such participant's compensation bears to the compensation of all participants. (Note to reviewer: A plan that utilizes elapsed time in lieu of counting hours of service may substitute the completion of either 91 consecutive calendar days or 3 consecutive calendar months for 500 hours of service in the above sample language.) (Note to reviewer: A nonstandardized plan may require, as an option on the adoption agreement, up to 1,000 hours of service.)"

See information on self-employed persons, sole proprietors, etc. in http://www.irs.gov/pub/irs-pdf/p560.pdf

My recollection is that the DOL expects there to be caps on the percentage/number of employees in a company that are considered to be within the "select group of management or highly compensated employees." If I recall correctly, it expects that a "select" group will not be more than about 15 percent of the employees or 50 (75?) total individuals. (If anyone has a better memory, please correct these). I don't know what purpose the number on the top hat filing is used for. But if DOL steps up enforcement on NQ like the IRS has, then it might be a good idea to make sure that you're not exposing a violation of these rules by reporting a large number.

If you don't believe me, go to http://www.americanbenefitscouncil.org and read the side-by-side prepared by Davis and Harman. They are a DC law firm that works closely with groups actively involved in influencing the legislation and regulations. See their section on “Grandfather Rules.”

ROFLOL. My information is very reliable.

How about 1.401-1 requires a plan to be a "definite, written program." If you start making contributions/allocations that are outside those definite written terms, then you have a qualification problem.

I assume that you're aware of Rev. Rul. 2004-13? http://www.benefitslink.com/IRS/revrul2004-13.pdf

I've heard that if a plan is going to be updated to provide for the automatic rollovers, then it would follow an EGTTRA timeline: good faith amendment in 2005 followed by final amendment by end of EGTRRA remedial amendment period. However, if plan is going to be updated to remove force outs, then that should occur prior to March 28.

This was the latest I was aware of http://wrg.wmmercer.com/content_print.asp?...046834&ext=.PDF

I believe that Treasury has indicated that retiree health related benefits would be included in the definition of deferred compensation....but only those that would be includable in income.

What about the title: "American Jobs Creation Act Will Require SIGNIFICANT ACTION On Deferred Compensation Plans By Year End" What does that mean? Since we have no guidance yet, these articles can only speculate on what the final rules will be. However, it is my understanding that Treasury is going around telling people that they don't have to do anything different than what they otherwise would have -- i.e., no action -- before year end. And that the new law doesn't prohibit continued usage of haircut provisions in pre 10-2004 plans in regard to deferrals that are already earned and vested prior to January 1. The first guidance is expected within 6 or 8 weeks. I'm assuming that commentators who haven't heard the first comment also haven't heard the second comment.

The Dorsey article indicates that significant action needs to be taken by the end of the year -- with the suggestion that amendments need to occur. And that is not correct either.

This is consistent with my understanding -- you can continue to operate under "old plan rules" with respect to "old money;" the new rules do not apply. I've specifically heard that haircuts can potentially be continued (but not added). But the IRS is taking enforcement action -- and your risk is whether the old plan rules comply with "old law" -- whether your haircut provisions would violate 451 constructive receipt rules.

If the plan is an ERISA 404© plan, it is required to provide the fee disclosures required under those regulations.

I've seen some take the position that the tax exempt needs to have a 990-T on extension. But I'm not aware that the IRS has ever taken a position (although I haven't had a reason to look at it the last few years).

You need to find out how the joint venture is going to be treated for general tax purposes. In many cases (e.g., where there is a dividing of the profits between the joint venturers), the JV will be treated as a separate taxable entity and then have to "check the box" on how it is going to be treated -- partnership, corporation, etc. Once the type of entity is determined for tax purposes, you then generally follow that for all purposes. So if the JV is treated as a corporation, then you follow the rules that would apply if Company A had a 65% interest in another corporation and the 35% owner wants you to transfer employees of the corporation wants you to transfer the balances without paperwork...

How clear is plan regarding timing of offset? Failure to follow plan terms re offset may be an operational violation. However, failure to try and collect loans can be a fiduciary violation and make loans prohibited transactions. See preamble to 200 proposed regulations: "The Department of Labor (DOL) has advised the IRS that, with respect to plans covered by Title I of the Employee Retirement Income Security Act of 1974 (88 Stat. 829) (ERISA), the administration of a participant loan program involves the management of plan assets. Therefore, fiduciary conduct undertaken in the administration of such a loan program must conform to the rules that govern transactions involving plan assets. In particular, a loan program must be administered in a prudent manner, solely in the interest of the participants and beneficiaries, and for the exclusive purpose of providing benefits to participants and beneficiaries. See, generally, ERISA sections 403, 404, and 406. In the view of DOL, it is questionable whether a participant loan program of a plan covered by Title I of ERISA that does not provide for timely repayment of loans (through payroll withholding or otherwise), regular and effective collection efforts following a default, and adequate security for the plan in the event of default would be in compliance with the rules applicable under Title I of ERISA to transactions involving plan assets. In the view of DOL, it is also questionable whether such a program would qualify for the relief provided under section 408(b)(1) of ERISA. See Preamble to 29 CFR 2550.408b-1, (54 FR 30520, 30521) (July 20, 1989)."

The regulations say: "Changes in length of blackout period. If, following the furnishing of a notice pursuant to this section, there is a change in the length of the blackout period ...the administrator shall furnish all affected participants and beneficiaries an updated notice explaining the reasons for the change and identifying all material changes in the information contained in the prior notice. Such notice shall be furnished to all affected participants and beneficiaries as soon as reasonably possible, unless such notice in advance of the termination of the blackout period is impracticable." The preamble indicates that even if you can't get the notice to everyone, you have an obligation to send it to those you can (e.g., electronic notice to employees).