BG5150

Where in the code does it address changing from prior year method to current (or vice versa)? Or was it a Rev Rul? Can someone point me in the right direction?

I find that the Relius helpdesk is pretty good, either over the phone or via e-mail. you have to ahve an account set up with them. The phone # for Administration is: 800-326-7235 x-1785 The wesite is: www.relius.net/support

Such an anticlimactic answer after a 471-word missive...

It sounds like there is a conflict between the SDA and the plan document (or, rather, the adoption agreement). I would say the plan docs win over the SDA.

I agree. And the plan should be amended for the year (at least) to not exclude the compensation so there is not an operational failure.

And ownership in the testing ("current") year.

Do you include receivables in the Top heavy test?

I know that former key employees are removed from the Top heavy test entirely. However, do they get added back in after 5 years of not being a key ee anymore?

If you force him out, you have to force out everyone under the threshold. You can't pick and choose to whom you will distribute.

Plus, how can you add earnings to a true-up? From which date would apply those earnings? Since the plan (we think) is using full-year comp, it doesn't have to make ANY match until after the plan year. If the plan did that, there would be no earnings calculation (provided the deposit was made timely). if you think about it, making the match at the end of the year is just one giant true-up. Making a match on a per-payroll basis just makes sense for a lot of companies. This way they don't have to write one huge check in January. So, my without a doubt, take-it-to-the-bank, I guarantee it or your money back, swear on my (insert family member here)'s grave that there is not interest calculation on true-ups. Ok, I'm not that postive, but I'm pretty sure.

415 might be an issue, tho'

But what if the participant was happy with her 3% deduction? Would she have to change it to 4% then change back to 3% to get out of that classification?

Does that run afoul of 415 testing? I thought for short plan years everything was prorated ('cept 402(g)).

The plan terminated. When the record keeper processed her distribtuion, it failed to properly offset the loan

Anyone?

Blinky should be 18. (since this is the 18th season of the Simpsons)

Those people shouldn't have to request their money to be moved. Just take it from the old record-keeper and put it into the new accounts. This is the same plan, right? Just with a new recordkeeper/custodian? A blackout notice would be required if the participants don't have access to the "old" money for more than 3 days (I think). The "new" money should be unaffected I would think, but it's up to you if you want to freezee that money while the process is going on.

I agree. But I don't think it's really a big deal if more withholding was taken than necessary. However, they should be contacted to make sure only the correct amounts were rolled over. And, 1099's need to be redone.

I have a client which terminated it's plan in 2005. I was getting ready to do the final 5500 when I noticed on my trust report a blance of 300 bucks. I found out it was a loan that was never deemed when the participant cashed out in '05. Am I going to have to do a form for '06? I really was just a processing mistake. All the other assets were distributed on or before 12/31.

To stop that stuff, the plan can be amended to make distributions after the close of teh plan year in which the participant terminates. (maybe)

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?