Monica Barnard

Is an HRA similar to a FSA? Where do I get a document? I am assuming that a Form 5500 has to be filed. Is that correct?

Is a HRA similar to a FSA? Where do I get a document? I am assuming that a Form 5500 has to be filed. Is that correct?

that's the way I read it, too. "This Section" does not address changing entry dates. Thanks to all for your discussion

Client has SH 401k Plan. Current eligibility is 1 YOS with semi-annual entry dates. Client wants to change entry date for deferrals only to 90 days effective immediately. Document being used will allow this, but are there any problems with doing this mid stream?

Employee had rollover into 401K Plan in 2010, and did in-plan Roth conversion on entire amount. Since Plan issued 1099R so that participant paid taxes, is the amount reported on Form 5500?

Excellent! Thanks so much.

So to expand on this and be sure I understand it correctly, let's say Mr. Smith has not yet taken his RMD this year. He has taken RMDs in previous years. Date of death is 6/1/2011. Mr. Smith's RMD for 2011 is calculated on his account balance as of 12/31/2010 based on his age in 2011, as if he were still alive. Then for 2012, the RMD is calculated on his account balance as of 12/31/2011 using the factor for his wife's age from Table I. Is this right? I read Pub. 590.

OH yeah, I've been through this, but it's been YEARS ago. The auditor randomly picked 5-6 clients to review files. Of course, one of the clients picked, we knew already had problems and had documented recommended solutions to the client. The DOL auditor found nothing out of line with what our firm did, and I actually ended up using him as a consultant when he retired.

I discussed this issue with several of my clients when this option was first brought to my attention. The most outspoken said that they were more comfortable with having their signature posted on the Web site than the PIN route. They felt it would be easier for someone to hack with the PIN than it would be to forge the signature. So, most of my clients are using the Filing Authorization. I give all clients both options, and very few have chosen to fool with getting the PIN from DOL.

The document states that "If the Plan has more than one person acting as Trustee, the Trustees may allocate the Trustee responsibilities by mutual agreement and Trustee decisions will be made by a majority vote (unless otherwise agreed to be the Trustees)". This is in the EGTRRA doc, and the wording has not changed from the GUST doc.

The language in the doc is "If the Plan has more than one person acting as Trustee, the Trustees may allocate the Trustee responsibilities by mutual agreement and Trustee decisions will be made by a majority vote (unless otherwise agreed to by the Trustees)"

I'm having a related issue with a brokerage firm. 401k Plan has 2 trustees. In the past, I have prepared a LOI for 1 of the trustees to sign to authorized benefit checks be issued. Brokerage firm is now saying that since there are 2 trustees, they both must sign LOI. Why should both need to sign a benefit payment authorization? What language could I use to avoid this? Many thanks

"Bob" is a sole proprietor with no employees. He is 50+ years old. He has a Solo K plan. His earned income before contributions is $100K. He has already contributed $22000 for 2009, designated as salary deferral. Just to be sure I'm doing this right, he cannot put any additional employer contribution in because he already exceeds 404 limit. Does somebody have a simple spreadsheet that would help with calculating maximum deductible for above type situations? Thanks!

Office Manager took out max loan from plan in early 2009, then resigned before any payments were made. Plan does state that loan is in payable in full upon termination of employ. He has not requested distribution, but I am guessing that he still needs 1099-R on defaulted loan. Or, does the loan continue to accrue interest until he takes a distribution? Thanks

Hey Ya'll - Drs P&Q have a 401k with self-directed accounts. In 2009, they moved from Brokerage Firm to Large Insurance Carrier. SOX Notice was properly given. Brokerage firm liquidated assets on the worst trading day of the year. Losses were, of course, dependent on the investments of each participant. Investments were wire transferred to Large Insurance Carrier. Dr. Q wants to know what legal obligation does he have as trustee to notify participants of the investment loss. I don't know of any requirement to send a notice that specifically addresses investment losses due to the movement of plan assets from one investment firm to another. Is there any need or requirement for him to do so? Thanks for your help on this.

What about IRS penalties for late filing? I've read Rev Pro 2008-50, and see no mention of relief for late filing of Forms 5500. Also, the DOL may not be aware a plan exists, but what about IRS? Isn't the corporation filing a tax return annually? Don't they claim a deduction for qualified plan contribution? Shouldn't the IRS be able to pick up on the fact that the corp. is taking a deduction but they aren't seeing any 5500s?

We, too, are scanning everything to pdf files, but I am currently hanging on to the paper. Particularly, I am going to be hanging on to paper for the EGTRRA restated docs. But, in light of the fact that DOL will be requiring Forms 5500 to be filed electronically via their Web site (rather than saving the file to a disk or CD and snail mailing it to them), we are considering going completely paperless as far as sending reports to clients. I am researching use of secure file sharing. There are some programs out there specifically targeted to CPAs, and that may work, but if anyone has any ideas on this, please share!

Should TPAs be using circular 230 disclosure on letterhead/e-mail/fax correspondence?

I agree with Medusa...I got bored after reading only part of a chapter. I must say that 20+ years of experience had to have helped. And yes, I passed both parts.

Thank you both for this guidance. Very helpful.

“Bob” worked for ABC Corporation. When “Bob” left ABC, he established a Profit Sharing Plan and rolled his $100,000 401k balance into his new plan. He then withdrew $95,000 in order to purchase and operate his new business. I have read Sec. 4975© and (d), and 406 and 408(e). I’m not clear on how to treat the money “Bob” withdrew. Is this treated as purchase of an investment by the plan? If it’s not a distribution, how do I show this on the 5500?

Plan Sponsor is based in UK. Plan covers US employees. Current trustee is US citizen, but is resigning. Can the sponsor appoint a non-US citizen to be trustee?

I agree as well, and I told the doc that it would be best to wait until year end. Doc isn't actually retiring, but he posed the question. Thanks!!

Doctor client brought up an interesting question. Partnership (father and son docs) has had plain vanilla ps plan for years. He has a former employee who has requested distribution by the end of this year (not gonna happen). But he asked if she were to get her money now, what date would we use for value of her account. His plan doc specifies that the "Plan Valuation Date shall be the last day of the Plan Year (Dec 31) and each other date designated by the Plan Administrator which is selected in a uniform and nondiscriminatory manner." Let's assume value of plan assets as of 12/31/2007 was $1.5 million. Doc's portion was $1.2 million. Current value of plan assets is $850,000. Let's say Doc retired 10/31/08 and wants his money now. Business and plan are continuing. Doc wants his $1.2 million, but he can't have it. If plan is valued as of 10/31 there still is probably not enough money to pay his $1.2 mil. If plan is valued as of today, is that "a uniform and nondiscriminatory manner"?

That's the way I have always done it, but I couldn't find anything in the document that addressed this. Thanks!