movedon

I don't understand how the IRS could take such an arbitrary position. Prime, or less, could be a perfectly reasonable market rate for a secured, five-year, $50,000 loan. I look at local five-year new car loan rates for ideas about reasonable rates, and I see rates from reputable lenders as low as prime minus one. I'd defend that with a straight face.

Agreed that giving away the QPA designation to ERPAs is silly. As a long time CPC/QPA/QKA and a recent ERPA, I can testify that the ERPA exams are a joke compared to the QPA exams, and not just on the DB side.

I believe that's a labor reg and does not apply to a non-ERISA plan.

Absolutely. I have had this experience with my clients as well as with my (and my wife's) own solo k plan with a couple different companies (I won't name names, but their names rhyme with "shmipelity" and "stan-hard"). Not only do they make it seem easier than it is, but you are also likely to have service issues when you call with technical pension issues and find that the solo k department is separate from their normal institutional department and the people (children) answering the phone there are not pension experts. Combine that lack of subject-matter knowledge with the training they all seem to get that teaches them that they must act confident on the phone and never consider admitting they might be wrong about something, and you have yourself a mighty frustrating experience. Even as a professional pension consultant, it required a lot of work on my part to convince them that I know what I'm talking about and that the transfer of assets I was trying to accomplish from their solo k platform to their pooled institutional platform is a transfer and NOT a rollover (because I finally got frustrated with their ineptitude and wrote my own plan document). If a couple grand out of pocket initially and about every six years plus a couple hundred a year for required amendments, etc. is not a vast sum of money to you, do yourself a favor and find a pension consulting firm in your town and pay them to do your document.

I don't understand why he would expect an exception - isn't this pretty much the exact situation the rules are designed to prevent? If he gets the exception, please post the details. I'd love to buy my neighbor's house in my solo-k and tear it down and put in a fishing pond where it was.

I've spun my wheels on this issue (same or similar) before and always found researching it to be a chore. I vaguely recall there is a pub that defines nonresident alien. Off the cuff, I'd say yeah, a non-U.S. citizen living outside the U.S. is a nonresident alien. The fact that the dude doesn't get a W-2 or get paid in dollars or have any withholding may mean he doesn't have any plan comp even if NRAs aren't excluded. There may be a tax treaty.

Sounds like you think your boss is asking you to prepare "slip pages" to change a plan document retroactively in an effort to correct/cover up a mistake. My advice would be to look carefully at the situation and make sure what he's asking you to do is actually illegal and/or unethical before you make a stand. I can tell you that I've seen this type of situation play out two different ways - sometimes an employee gets a little unnecessarily high-handed when the situation isn't as ethically dire as they think (or want to think) it is. I'm not saying that describes you, just that I've seen it. On the other hand, I've also seen and personally been asked to do lots of wrong crap in this business (usually involving backdating). That's your call. I don't do it, but then I also get a little sinister pleasure from taking the moral high ground and gambling with my job in the process. I mean, what kind of life have you lived if your righteousness doesn't get you fired at least once?

And there's the problem with the policy - nice idea, but it's not going to reduce the spam. At best it'll change the format - and that assumes voluntary compliance by the spammer. The policy also doesn't eliminate the misleading use of the "friend" function. If you don't know what I'm talking about, click on the spammer's name and look at his/her profile. That's what the marks will see when curiousity leads them there.

The purpose is free, nearly effortless marketing. Spammers should be banned, whether their product is pension-related or fake Viagra.

I'd deduct that sucker as a current contribution.

I recall treating the payments as plan comp if they are reported on the W-2 and the insurance premiums were paid by the employer, but like others here, I can't really remember my authority for that and can't be arsed to look. Check the EOB.

Are you suggesting that the contribution would need to be tested as a current year contribution? I'd say no - it's a corrective contribution under SCP for a previous plan year and applies to that previous plan year in every respect (except the deduction). To require the contribution to be tested as a current year contribution would (conceivably) require additional contributions disproportionate to the scope of the original failure, and really wouldn't put the plan in the same place it would have been in had the failure not occurred. Plus, it sounds hard, so it can't be right.

Hey, Dave - it looks like the link for today's retirement newsletter should be http://benefitslink.com/2011/2011_01_03_retirement.html instead of http://benefitslink.com/2010/2011_01_03_retirement.html.

I would much rather this happened long ago (before I was arsed to get the stupid PTIN and waste my $30 or whatever the cost is after the deduction), but I think I'll resist the urge to gripe - I'm that happy for it to go away.

And what about the employee that gets a PTIN - does he then have risk that an employee without a PTIN doesn't have? Is the liability for his mistakes no longer only on his employer?

Yep, I've seen this a couple times - played out as follows. 5500 from several years ago was properly completed showing change in EIN. IRS contacts client (couple years later) telling them (after much silly correspondence - I'm really cutting to the chase here) to amend the last 5500 that used the old EIN to show it as a final return. Can't remember if the subsequent 5500 was supposed to be amended to indicate it was a first return - I'm thinking not. Anyway, I argued with the client and some IRS phone jockeys quite a bit before I gave up and just amended the return. Never heard anything after that, so I guess it worked. I still probably wouldn't do it that way in the future - I'd do it the way I think is right and only change it if the IRS asked me to, even though it's more work. Turns out I'm more hard-headed than lazy. I had my money on lazy.

I wouldn't presume that a loan feature makes the plan an ERISA plan. For instance, if the loan process is between the employee and the vendor, and the employer does nothing more than withhold payments from paychecks and remit to the vendor, I'd say no ERISA.

Bird - I've run across unincorporated business owners getting W-2s a time or two (have no idea whether that should ever happen or not, but that's what the accountant did) and generally agree with your thoughts on it, although I do vaguely recall the definition of comp in a plan document (Relius proto or vs, maybe?) causing me problems. I think the document made me question whether it was appropriate to include the W-2 comp as plan comp for the self-employed person. I think I decided not to count the W-2. Sorry I can't be more specific. Edit: added "Bird-" to clarify which of the above posts I was addressing.

Another vote for this.

I believe Adrien is currently an IRS employee.

Best Sparky quote - "I’ve got my faults, but living in the past is not one of them. There’s no future in it." So long, Sparky.

My experience with clients with the flawed practice of chronically submitting deferrals late is that they never change. The most succesful but admittedly unscientific method of dealing with the problem in my experience has been doing the annual corrective contribution and excise tax filing and skipping the DOL filing. Never had any problem with that method, but YMMV. I did have one client that insisted on doing the DOL filing annually, complete with a statement that they had changed their ways to eliminate the problem in the future. They did this filing annually for about five years until the DOL finally responded and told them to quit filing because they obviously weren't really fixing the problem. If I had a client that chose to file with the DOL (after I explained all the options), I'd be fine with that, but I would suggest they seriously consider fixing the problem so as not to have to file again in a subsequent year.

Yes. No.

You got my curiosity up - why not just do a 403(b)?

I'd say the economy's rough on the people who got laid off, too.