401_4_ever

The only way to correct this is via VCP.

An IRA custodian receives a request to perform a substantial (in the six figures) Roth conversion from an traditional IRA into a Roth IRA during 2014. The custodian now realizes it never performed the conversion but has all of the materials it would have asked for to complete the transaction during 2014. Is there anything the custodian can do? If this were a qualified plan, EPCRS would dictate a result but it seems like the account holder is stuck. Is the only possibility to have the custodian go get a private letter ruling?

I have a controlled group with two separate businesses. One has 8 employees and one has 500 employees. Can they not be a QSLOB because each seperate line of business needs at least 50 employees? Or, is it OK because one of the two has 50 employees?

I am working with a 501©(3) that sponsors both a 401(k) and a non-ERISA 403(b). The 401(k) is having ADP testing issues. The plan's recordkeeper is proposing that in December of each year, a quick ADP test is performed, and any amounts that would cause the ADP test to fail is "transferred" to the 403(b) and treated as elective deferrals. This seems bizarre -- has anyone seen anything like this?

Outside of the Medicare Secondary Payer rules, are there any rules out there that would prevent a company from either (1) excluding employes from coverage if their spouse works for a company that offers them coverage, or (2) offering cash incentives to not take coverage with the employer and instead take it with spouse's employer? I'm also aware of the pay or play effects (1) would have under ACA -- wondering if there is anything else in the universe to worry about. Thanks for the help.

When he comes in is subject to the terms of the plan document; most plan documents put him in immediately upon rehire. You would need to check your plan document. The deferral election that he comes in at is subject to interpretation of the QACA uniformity requirement; I think the prevailing interpretation is that he would come in at the level he left, plus potential increases that occurred while he was away. The optional full-plan year rule that starts people over on deferral rates would presumably not apply because you state he was rehired with in 1 year.

Is anyone hearing about prototype sponsors doing interim amendments for Friday's Hurricane Sandy Relief announcement??

No.

Switching from an IDP to a Prototype also triggers a 5307 application, so whenever you do one of those, there's a notice to interested parties as well.

Taxable in 2009 regardless of date of distribution. 3/15/2009 still relevant because there is still a 10% excise tax after 3/15, unless of course they are an EACA, and they have a later deadline.

Thanks David, that's where I am too. Someone above noted it was signed into law, which I didn't think so yet. Agreed, it won't be vetoed (or pocket vetoed), just waiting for it to actually be signed before I do all my announcements.

Has anyone seen this actually signed into law? I saw it pass the house & senate but have not seen it make it's way into law yet.

Does anyone know a good software package that can handle new comparability? I don't need a full recordkeeping system, just a stand alone package, so I'm looking to stay away from Relius. Thanks all.

Nothing about that seems either ludicrous or illegal. A plan is not required to allow a distribution at termination of employment. The only requirements are to permit them at either death, or attainment of normal retirement age combined with termination. I once had a plan that wrote into the document (it was an IDP), that if the participant signed a non-compete clause at the time of termination, they could take a lump sum form of distribution. If they didn't sign a non-compete clause at termination they had to take payment via installments, and lump sum payments would not be available until ten years after termination. They requested a determination letter from the IRS. This provision was approved.

Got ours also dated 3/31. IRS sent it to name of the company with no person's name at the top, so it floated a little. (We do our own & don't purchase, so I can't help there either).

Does anyone out there have any clue or inclination what is going one with IRS opinion letters for prototypes? Thanks...All this work to get ready on time and then the IRS sits on its hands.

I would also think about treating it as an overpayment under EPCRS.

You answered your own question, it would depend on the terms of your plan document. We wouldn't be able to answer it.

I know I'm in the minority, but yet another reason why prior year testing sucks and life is just easier with current year testing.

Alernatively, the Participant can ignore the distribution, and when they get the 1099-R (In January of 2009), they would have to amend their 2007 return.

They could choose to do so, but they would not be eligible for the 414(s) safe harbor definition of compensation.

Please note this money is still taxable in 2006, even though it won't be distributed. Any 402(g) excess that doesn't get distributed by 4/15 is taxable TWICE, once in the year deferred, and then again in the year distributed. Makes for a very unhappy participant.

Have you tried asking for 1/2 of the Plan's ADP rate for the effected years plus applicable match to avoid the windfall scenario?

The 90 period to opt out of auto enrollment only begins in 2008. The participant would need to some other triggering event to be able to take a distribution at the moment.

The earliest this plan could go to safe harbor would be 2008.