John Feldt ERPA CPC QPA

Hmmmm. If the result you provide is truly correct, then with a contribution of $11,400, then the entire account should now have lost $12,255 and it's overall balance must be about -$855. Is the calculator an HP 128c with Reverse Polish Notation (RPN)? edit: typo!

Ignore the other $11,000 and it's earnings, it's not getting refunded. You're saying that the $400 excess amount, all by itself, has gone down by $430; the earnings/losses on just the $400 excess has turned it into -$30? ??? edit: for a typo

http://www.icmarc.org/xp/rc/about/news/200...330roth457.html I think the Bill still will need to be reconciled in conference committee before it can go up the hill.

It looks they they still apply. I just did a review and it did not appear to have an expiration date. Maybe hat size is better.

Not official code/regs, but under section III: http://library.findlaw.com/1996/Nov/1/127234.html Also, about the 7th or so paragraph down in this artcle: http://www.thefreelibrary.com/401(k)+plans...gain-a019224823 "Unfortunately, after the enactment of the Tax Reform Act of 1986, most associations and other private nonprofit organizations were precluded from offering 401(k) plans to employees. Only tax-exempt organizations that offered these plans before July 2, 1986, could continue to sponsor them. Now that's all changed. After a 10-year battle by ASAE and its partners in the nonprofit community, 401(k) plans are once again available to associations, other private nonprofit organizations, and their employees. Provisions in the Small Business Job Protection Act of 1996, enacted August 20, 1996, allow associations and other nonprofit organizations to offer 401(k) plans beginning generally on or after January 1, 1997."

Do those temporary regs still apply? If so, thanks!

True. You cannot have a 403(b) plan, but a 401(k) plan is good to go. This did change a while back. Before January 1, 1997, you would not have been able to adopt either a 401(k) plan nor a 403(b) plan, but after 1996, the doors were open for you for a 401(k). I think this was in the Small Business Job Protection Act of 1996.

All.

Here's how the IRS might answer: You define the 2 1/2 months by measuring it from the day the participant severs to a date that is 2 1/2 months later. I'm doubting that helped. This is only important for employees that terminate less than 2 1/2 months before the end of the plan year, because the regulations allow you to go to the later of the end of the plan year or 2 1/2 months after severance. I'd argue that a half month is 15 days: Terminates November 20, 2007: 2 1/2 months = February 4, 2008? Terminates December 20, 2007: 2 1/2 months = March 6, 2008? Perhaps if the final 1/2 month is entirely in February during a non-leap year, the IRS might argue that it's only 14 days. Only the oracle knows.

I agree that just having access to it is not enough. I said I would post the cite for the profile, but the Fiduciary Guidance Counsel member found it for us while I was out. The plan must provide the participant with a copy of the most recent prospectus under DOL Reg. §2550.404c-1(b)(2)(i)(B)(1)(viii). However, I believe that a copy of a “profile” would suffice in lieu of a prospectus unless the participant specifically requests the prospectus itself, per DOL Advisory Opinion 2003-11A. Just my opinion. Also, IMHO, just because the court need not defer to it, that does not mean the court can easily ignore it. Maybe someday we'll see if a court case is found that hinges on this item, and where the court decides to ignore DOL Advisory Opinion 2003-11A. edit: typo

The way the code or regulations are written, the adoption of a qualified plan invalidates the simple plan.

Basically, the 401(a)(31)(B) amendment (a.k.a. automatic rollover amendment, or mandatory distributon amendment) was generally required to be adopted at the end of 2005, or the due date of the company tax return including any extension that contained the plan year containing March 28, 2005 (something like that). However, if your plan did not have any language that forced out distributions, then you would not need such an amendment (we had a couple of DB plans that did not pay any small lump sums, for example). If that is not your situation and if the amendment has just now been executed (signed), then it is late, and you can file under EPCRS for a mere IRS fee of $375.

I've not found any, so I'll say no.

Is the hospital plan a 403(b) and the PC plan a normal DC type PS/401(k) or money purchase? If so, then: Since the PC owner owns 50% or less of the PC, then the 415 limit is not aggregated with the hospital 403(b) plan. However, if the owner of the PC owned more than 50% of the PC, then their PC plan and the hospital 403(b) plan must be aggregated for 415 purposes. The 402(g) limit for deferrals is an individual limit, aggregating all 403(b) and 401(k) deferrals together (without regard to 457(b) deferrals).

I'm pretty sure the "prospectus" can be a summary instead of the whole booklet prospectus, just an fyi. If I remember, I'll find the cite when I return to the office and try to post it here.

AFTAP: "adjusted funding target attainment percentage” http://www.irs.gov/pub/irs-tege/epnf_0807.pdf Except zero divided by zero is anything you want (indeterminate), not undefined. I want 0 / 0 = 100% - so, uh, well, to prove that we multiply both sides of the equation by zero and we get 0 = 100% x 0 not buying that one I suppose? Alright, - the IRS didn't buy that idea for ADP testing when someone has zero comp.

If I remember right, somewhere near the end of the PBGC Form 1 instructions, it indicates what the PBGC regs also say: Majority owners are determined as of the date of plan termination, and therefore will need to forego receipt of benefits on or before the date of plan termination. If I find the cite, I'll come back and add it later. added later on edit: I was not quite right in memory, see page 21 of the pdf file, left column, after explaining the election to forego receipt of benefits, it says: "Note: Majority owner status is determined at the time of the election." I believe that means the election to forego receipt. http://www.pbgc.gov/docs/500_instructions.pdf

You are probably aware, but just in case this helps: under 404(a)(7), you can ignore the first 6% contributed to the DC plan (of course deferrals are also ignored). So it's really more like a 31% limit (for 2007).

I believe you are correct. If your plan doesn't have any other employer contributions, then you meet the top heavy exemption - no TH contributions needed. Tough noogies to the HCEs who are not key. I don't know why they didn't put that phrase in IRC 416(g)(4)(H)....

And, if I understand Tom correctly, you can test one rate group on a contributions basis, and another rate group can be tested on a benefit accrual basis.

Did any guidance change the GAP period income issue for excess deferrals? Under Final 1.402(g)-1 regulations for 1.402(g)-1 paragraph (e)(5)(i) and it states as follows: (5) Income allocable to excess deferrals (i) General rule. – The income allocable to excess deferrals for a taxable year that begins on or after January 1, 2007 is equal to the sum of the allocable gain or loss for the taxable year of the individual and, to the extent the excess deferrals are or will be credited with gain or loss for the period after the close of the taxable year and prior to the distribution (the gap period) if the total account were to be distributed, the allocable gain or loss during the period. The income allocable to excess deferrals for a taxable year that begins before 2007 is determined using the 1.402(g)-1(e)(5) (as it appeared in the April 1, 2006 edition of 26 CFR Part 1) - So it looks to me like gap period income will apply for excess deferrals beginning with 2007 tax years, but PPA said something related - that must have only applied to ADP/ACP refunds, not for excess (over the 402(g) limit) refunds?

If you are talking about the 'new' safe harbor plan type that uses the automatic escalation from 3% to 4% to 5% etc. (a QACA plan), then yes, you need to have that be effective at the beginning of the plan year. Be sure to give the proper notices timely. If you simply want to be an ACA, not a QACA (ack!), then no, you can adopt the automatic enrollment features and/or the default enrollment escalation features at any time. Be sure to give the proper notices timely. I'm not sure if that answers the question, but I hope that helps!

I think you can apply for a D letter now, off-cycle, and you will not be rejected, but only because the next cycle (2011) is more than 2 years away. I recently read something that indicated this, I think it was in an IRS EP newsletter. If I find it, I'll come back and add the link. edited to add this link: http://www.irs.gov/retirement/article/0,,id=146910,00.html go to the heading near the bottom entitled "Off-Cycle Filing" and read the second bullet point

Okay, technical point granted to QDROphile. Many small plans define the Plan Administrator to be the same as the Employer, who is also the plan sponsor. But yes, you're right. Even when the plan language is that way, the Employer needs to remove their Employer hat and put on their Plan Administrator hat to do the distribution. Mine is a green hat.

Since this is a church plan which has not elected to be subject to ERISA, is double proration therefore allowable? ERISA §2530.204-2(d) Prohibited double proration (1) In the case of a defined benefit plan that (i) defines benefits on a basis which has the effect of prorating benefits to reflect less than full-time employment or less than maximum compensation and (ii) does not adjust less-than-full-time service to reflect the equivalent of full-time hours or compensation (as the case may be), the plan may not further prorate benefit accrual under section 204(b)(3)(B) of the Act and section 411(b)(3)(B) of the Code by crediting less than full years of participation, as would otherwise be permitted under paragraph © of this section. These plans must credit, except when service may be disregarded under section 204(b)(3)© of the Act and section 411(b)(3)© of the Code (relating to less than 1000 hours of service), less-than-full-time employees with a full year of participation for the purpose of accrual of benefits. 1.401(a)(4)-12 under Section 414(s) compensation (4) Double proration of service and compensation. If a defined benefit plan prorates benefit accruals as permitted under section 411(b)(4)(B) by crediting less than full years of participation, then compensation for a plan year, 12-month period, or other specified period that is used to determine the amount of an employee's benefits under the plan will not fail to be section 414(s) compensation, merely because the amount of compensation for that period is adjusted to reflect the equivalent of full-time compensation to the extent necessary to satisfy the requirements of 29 CFR 2530.204-2(d) (regarding double proration of service and compensation). This adjustment is disregarded in determining whether the underlying definition of compensation used satisfies the requirements of section 414(s). Thus, for example, if the underlying definition of compensation is an alternative definition that must satisfy the nondiscrimination requirement of §1.414(s)-1(d)(3), in determining whether that requirement is satisfied with regard to the underlying definition, the compensation included for any employee is determined without any adjustment to reflect the equivalent of full-time compensation required by 29 CFR 2530.204-2(d).