John Feldt ERPA CPC QPA

To answer your original question: Yes it is possible, but I doubt many (if any) clients will do that. If your plan has automatic enrollment, the plan language (or the amendment language) must state whether or not the automatic deferrals will be pre-tax regular deferrals or post-tax Roth deferrals (or possibly the langauge could state that it is split up between them). I think it is probably best to adopt plan document language that has automatic deferrals being done on a pre-tax basis. However, some odd-duck client out there might want auto-enroll deferrals done as after-tax Roth. Deferrals are either done as Roth or pre-tax. If the plan matches your deferral, you get a match, pre-tax or Roth does not change that.

Your ERISA attorney is strong with the force.

Yeah, that's what we thought too. Many of our DB clients will have some planning time since we use plan years that start a month or so before the company's fiscal year-end and we make sure they plan to take the first year cost as a deduction on the tax return in which the that first plan year started. That way, the second set of benefit accruals have not yet happened for a few months after the first plan year ends, but that second fiscal year has ended already, which gives them a pretty good feel for what they can afford business-wise. Worst case, they can usually freeze the plan before the cost of that next accrual occurs. Thoughts on that? (sorry to kinda hijack the discussion Belgarath)

To clear that up, we place an extra clause in the amendment stating, in your example, "that for purposes of 412©(8) this amendment is effective 1/1/2007." Also using your example, the rest of the amendment has an effective of 2-15-2008 as does the 204(h) notice. I'm not a document attorney, so let's see what others have to say. On edit, this is added: Section 412©(8) goes away in 2008, is that replaced with something in section 430, or does the whole concept mostly disappear since the funding method must consider benefits that accrue during the year anyway?

Not a bad idea. But if your firm has 500 clients with December 31st year-ends and 375 of them have already filed their 5500, then the time-cost on those 375 could have been spend doing something else that produces actual revenue - just a thought.

http://benefitslink.com/boards/index.php?a...st&p=106181

ditto.

Sounds like the LLC is taxed like a partnership. If that's the case, then when is the true "earned income" known for the year from which a deferral may be made? If a written election to defer for the partner is on file on December 31, such as an election to defer $15,500 and the true earned income is calculated for the partner and finally known by the end of March, now what would you think?

Catchups do not count against the 415 limit. Young folks are limited to $45,000 for 2007. Old folks (50 and up) can get $50,000 for 2007 if $5,000 of that is a catchup deferral.

If the plan is a prototype and the prototype document sponsor has adopted all of these interim amendments on behalf of the clients, then when you restate on that prototype, I see no need to have the employer re-adopt all of those tack-on amendments. They are automatically part of the plan. If your client needs something different than what was adopted by the document sponsor, then they should sign that amendment. With a volume submitter plan, if you are using the same GUST volume submitter document again to restate, then in the resolution to restate you may be able to mention that the plan is being amended in full but that the EGTRRA, 401(a)(9), 401(a)(31)(B), etc. amendments are retained in their original form, but I am not 100% certain about this. Let's see what other commentators say too. Upon edit, I added this: Question #2: I don't think it would be self-correction. Either it was amended timely, or schedule F of Rev Proc 2006-27 under a VCP application should be filed.

We have also taken over a few plans that never filed 5500's (they had set up their own plans using the do-it-yourself approach via a website). We do not bother with the 5558 for the current return and we file all of the delinquent returns (including the current one) simultaneously so only one fee of $750 is required (small plan). That's our approach. So far that's worked just fine. P.S. Keep in mind that the IRS and/or DOL can audit any of those prior years to see if they operated in accordance to their terms, the 3-year statute starts when you file, so be sure to get good info for your filings. If anything is found that needs a correction, get started on a VCP application early if SCP is not available.

If they are a controlled group or an affiliated service group then they are considered a single employer.

"Does anyone if it is allowable for the plan sponsor to have the HCE's return the difference between the Total group refunds and PD refunds back to the plan?" Not allowable. fiona1: Austin is absolutely right on the mark in the above comments. Be sure to note: the recordkeeper's days are numbered (or should be). Kudos to the plan sponsor for noticing this, negative kudos for their choice in recordkeeper. I think Ed Burrows said something like: keep testing until the test passes or until the sponsor runs out of money to pay for more tests.

I am not 100% either, but I will hazard a guess. I think they are first reminding us that their goal is to provide approval letters with enough time to allow the users of these approved documents about 24 months to restate all of our clients. They are talking about the M&P plan documents - I think of these as the big national template document providers (like Sungard, Accudraft, etc. - pre-approved documents) or anyone who is qualified under their procedure to submit those kind of documents. They also state that the applications for these opinion or advisory letters for these template documents will be reviewed in the order received. So, there will be some delay for any requests for approval for pre-approved documents that are submitted after the normal due date in the six-year cycle (which was 1/31/2006 for EGTRRA DC document providers). This applies to all late submissions for opinion or advisory letters made after January 31, 2006. Maybe someone else on the board can correct me and elaborate further. This specific portion of this topic is probably better served in the Plan documents section.

Suppose a client misunderstood his DB plan 2 years ago, thinking all of the assets were his (the plan had one owner and 2 NHCE eligibles in the plan with accrued benefits). Suppose a ____ financial advisor convinced the owner/employer/sponsor/trustee (same person) to move all of his DB funds into his personal IRA. Suppose this happened just before the valuation date of November 1, 2005. Now suppose that a VCP application is now underway, and the correction method will be to propose moving all of the IRA money back to the plan (the IRA had no comingling and no distributions). Suppose all of the assets from the IRA are in the process of being transferred back into the plan. If you were the paid enrolled actuary, what would you do regarding the Schedule B for 2005? Option 1: Would you wait until the assets are actually transferred back to the plan before signing a schedule B for the 2005 year? Option 2: Would you run 2005 valuation with zero assets and offset the owner's benefit by the value of the amount that went to the IRA? Note: the plan assets were larger than the value of the owner's benefit. Option 3: Once the assets from the IRA get moved back into the plan account, would you run the 2005 valuation using the 11-1-2005 value of the IRA to be considered "plan assets" and sign a schedule B for that? Option 4: any other ideas out there? Same questions for the 2006 valuation and schedule B too. Oh, and assume that firing the client is not really an option now since they have begged for mercy by paying you in advance in the form of an unusually large check for val work and VCP work.

Agreed.

Okay, since we are dealing with the team of Holland et al, who knows what might really be meant. As Larry Deutsch has in his axiom #4: "When I use a word, Humpty Dumpty said, in a rather scornful tone, it means just what I choose it to mean neither more nor less." Lewis Carroll Andy is right to pose the question, who knows how the IRS will use that word? I choose to take that risk anyway, making my own reasonable interpretation, where the word reasonable means exactly what I want it to mean . I'll stand by my earlier post.

As far as the oustanding proposals, if any of them sign up then you'll have to communicate to them that the IRS re-wrote the law on their own doing, so the maximum is reduced, but even with that the results are still palatable. You realize that in 2008 the issue disappears for those handful of prospects who are subject to the PBGC (if that's any consolation). You still have something like this, or whatever your prospects' demographics would produce: Plan Comparisons Traditional 401(k) Profit Sharing Plan HCE's: 110,000 NHCE's: 54,000 Cross-Tested Safe Harbor 401(k) Plan HCE's: 120,000 NHCE's: 25,000 DB/DC Combo Cross-Tested Plan HCE's: 240,000 NHCE's: 78,000 DB Stand Alone Plan HCE's: 260,000 NHCE's: 115,000 DB with Cross-Tested Safe Harbor 401(k) Plan HCE's: 355,000 NHCE's: 135,000 Put it in a stacked bar chart and you can illustrate the added value of PPA.

If it were me, in this case I would, yes .

The way I read it, if contributions for the tax year are made to the 401(k) / PS plan which consist solely salary deferrals, then you may use the 150% of current liability limit for purposes of determining the maximum deductible amount for the DB plan for the same tax year.

ttott, I've heard no rumblings, but if you haven't read ak2ary's ASPPA letter already, take a look at this, especially page 3 where he quotes Senator George Allen commenting to Senator Charles Grassley about this very issue. http://www.asppa.org/pdf_files/0514_2007-27NoticeFIN.pdf

Does the plan document even allow for these deferrals to be distributed from the plan? How many wives does the owner have?

Great! I know that over 90% of the taxes are paid by only 50% of the taxpayers and that the top 1% pay 35% of all income taxes. As far as what will truly be legislated 20+ years from now, I hope you're both right, my crystal ball is broken!

Of course, depending on future tax schemes, if in 20+ years when a consumption tax is enacted, then you can just pay those taxes again as the funds are spent. Hopefully that won't happen, right?!

One notice was late for one participant, or all NOPBs were late to all participants? In my opinion, if you just missed one person's NOPB, then read the PBGC Form 500 instructions, section G under "Correction of Errors", page 13 of the link below. I think this indicates that you are okay if 1) you acted in good faith and 2) that you corrected it no later than the latest date an election notice may be provided and 3) the delay did not substantially harm the person. See page 13: http://www.pbgc.gov/docs/500_instructions.pdf