BG5150

A lot of times, just some education will increase participation. Once people realize that if they defer 5% their paychecks aren't gonna go down by 5%, they start thinking about contributing. Some simple scenarios about how much more they'll have on retirement if they start now as opposed to later also helps. An information session can be done for little or no cost (depending on if you're handing out material and such). If the broker or agent can't or won't do this (it is in his or her interest to get people into the plan as well), it's time to find a new one.

I have a one-participant plan that had $90k at the end of '05. However, the owner made a $42k contribution in March for the '05 plan year. Does that put me over the threshold to file an EZ? The instructions aren't very clear on that.

In the ASPPA webcast the other day, this was specifically mentioned as a good idea to do. Not mandatory, but you have to balance the risk/reward.

3 more days of what?

I thought I read somewhere that coming up the SSA won't be needed any more. What year will that be?

The money should be taken out of the participant's account and put in a suspense account. The dollars should then be used to offset the employer's next contribution. (At least, that's the way we do it.)

In the past, if we had a plan that needed to file a Schedule P, and it didn't have a Trust Identification Number, I'd add a comment to the cover letter stating that the Trust needs it's own number that is independent of the sponsor's EIN. So, next year, when the P is no longer needed what do I do? I'd have no idea whether or not they have a TIN. And what else would the TIN be for?

Can't the employer jsut "call" it an '04 contribution and pay excise tax on the non-deductible contribution?

Plus, the bonds aren't that expensive, are they?

Wouldn't not having the ability to benefit under the plan cease their "participation"?

Is the profit sharing contribution at the employer's discretion? If it is, then there is no violation. The match might even be discretionary.

I'd say it's 15, since the other 185 (actaully all 200) are not eligible to contribute to the plan (or get an allocation).

What are the penalties for a plan not being covered by a fidelity bond, if any? We have a bunch of clients (some with a few $MM) and no bond.

There's been some talk in the office about not filing the "R" at all if there are no distributions even if the plan does not satisfy one of the five exceptions for answering the coverage question. Your thoughts?

Waiting for a plan termination may be beneficial...100% vested, baby! To the original poster: Do you have any friends still at the old company? If so, they may be able to get you a copy of the Summary Plan Description easier than you can. (You mean you didn't keep yours? ) Also, did you fill out any distribution paperwork? Or did you just request the distribution. You may be able to call the investment company where your investments are held--there should be an 800 number on your statement. They may be able to tell you the terms of the plan regarding distribution.

ooops...forgot about the accountant thing. Yeah. We only do C's if there were mroe than $5k in fees or there was a change in accountant.

What is going to happen to the 1099's that were issued? Especially if the monies are put back into the account.

Or if more than 5% of the plan's assets were invested in nonqualified assets. N'est-ce pas?

Never mind. I should read the instrux before I post these things. Shedule R instrux: ''Distribution'' includes only payments of benefits during the plan year, in cash, in kind, by purchase for the distributee of an annuity contract from an insurance company, or by distribution of life insurance contracts. It does not include corrective distributions of excess deferrals, excess contributions, or excess aggregate contribution, or the income allocable to any of these amounts. It also does not include the distribution of elective deferrals or the return of employee contributions to correct excess annual additions under Code section 415, or the gains attributable to these amounts. Finally, it does not include a loan treated as a distribution under Code section 72(p); however, it does include a distribution of a plan loan offset amount as defined in section 1.402©-2, Q&A 9(b).

The only "distributions" for my plan are ADP refunds. Do I need to file the "R"? (Plan is on a standardized prototype, so I'm not answering question 9). Related: Would I need to file an "R" if all we had were deemed distributions?

If the only fees are 700 bucks, why do a C? I thought they were only done if the total fees were over 5 grand.

We had a participant take out a loan in 2002. It was deemed a distribution in 2003, 1099 issued. participant has not had a break in service. Does that loan carry from year to year (on the 5500) until it is either paid or participant terminates?

Does the plan document have a heirarchy that dictates what happens if the the forfeitures are larger than the fees? Is there no provision to then either reduce employer contributions or reallocate to participants?

You'd run into a problem wherein some people would have the match and others wouldn't. You can't decrease someone's P/S contribution by the amount of match they earned.

Why not just do a 3% Safe Harbor Nonelective Contribution? Then a 4.5% Profit Sharing contribution.