BG5150

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.

...could be "inactive", employed but not drawing a salary.

I was looking at it from a different perspective. I was looking at if from the perspective of "whose stock do I own besides my own?" Rather than, "who also owns my stock?" Sully you are right. Please excuse my (previously) poorly worded posts. What I meant was: Say I don't own any stock myself. I am considered as owning, however, the stock of my parents, children and grand children. (1 up, two down) Sorry for the confusion.

Think of the "up" and "down" as ages. Thus, 1 up (your parents) and 2 down (your children and grandchildren).

I don't think notice is necessary, but I think it would be prudent. It may upset people if they see less than the stated amount of match in their accounts without. And all it takes is one squeaky wheel to bring down a rain of hurt on a company. We had one client who didn't notify the participants that profit sharing wasn't going to be made. There was one lady who freaked out and started complaining to the IRS and DOL about all sorts of shenanigans with the plan (none were true). So some agent decides to be a knight in shining armor and long story short, it was hell for the employer to clear itself of any wrong doing.

Ownership attribution goes one up and two down: HCE's parents (1 up) and his/her children and grand children (2 down). It also goes once laterally, that is HCE's spouse. No other spouses or relatives of the others. (Try to picture a family tree, with generations going down).

What would the participants have to say about not having the sources broken out? How could they reconcile what they had taken out of their paychecks with what went into the account?

For some of my smaller plans, I just take a quick peek at the r/k system to see if they were paid out so far this year. If they were, I just omit them from the form. Think that is okay?

Basically, the bottom number of the 80-120 rule goes like this: Assuming the plan did an H last time, as long as the count stays above 80, the plan can continue to file the H. If it is under 100, it may file an H or I. If the plan goes below 80, it mst file an I. In this case, I'd do an I. I think the accountant just wants to do the audit to generate fees. Or even just to keep it simple and continue to do an H, this way he (or she) doesn't have to revisit whether or not an audit will be done on the plan year-to-year.

The instructions for Schedule SSA indicate that for the participant's balance in 4(h) should be the value at 'time of separation'. Does anyone really put that value in there? Or do you put the balance at the end of the reporting period? Or even just a current vested balance? Does it matter? Your thoughts are appreciated...

Was the old plan officially terminated? Were the assets liquidated? Does that matter?

Just make sure none of the HCE's are getting more reimbursement than they paid out. I'm sure the DOL would have something to say about that.