Kimberly S

So if we weren't required to file a Schedule D before, there is no change? What happened to the SF form in the legislation?

PPA calls for simplified reporting to be made available to plans with fewer than 25 participants beginning with 2007 plan years. Reading the description on pages 8 and 9 of the 2007 5500 Instructions which explains the new simplified reporting, the DC requirements appear to be identical to the 2006 reporting. How is this a simplification? Have I missed something?

I have a client who is currently under audit by the IRS. The auditor discovered a similar situation and specifically required separate forms and excise taxes for each year since the year in which the test was failed.

I don't have any citations to back up my recollection, but I believe that only the plan sponsor is permited to make a contribution to the plan. The TPA should be reimbursing the plan sponsor, not depositing directly to the plan. That would also allow the TPA to deduct the payment as a business expense. It clearly is not a pension contribution for the TPA's business.

2007 contributions do not have to be deposited to the plan until 2008, much like 2007 IRA contributions can be made until 4-15-08. It would require marking the W-2 retirement plan box for 2007 because it is a 2007 contribution.

Also be sure your price comparisons are for comparable services. A full service provider will help you much more for the additional fees. A discount provider will charge you less but expect you to do more of the work. For example, you might be required to do your own calculation of the employer match contributions. Contrary to one of your earlier posts, a safe harbor match does not permit people to get different matching percentages -- if you mess it up you have all sorts of correction liabilities.

"By the way, the only distinguishing factor between a solo 401(k) and a regular 401(k) is the number of participants. Solo 401(k) is a marketing term only. " Austin, thanks for pointing that out. There seem to be LOTS of folks out there who think this is a totally separate type of plan that prohibits the employer from including employees. Those marketing folks are doing their clients no favors!

Are you sure that the TPA didn't mean that this plan doesn't allow loans? That would be a valid reason for them to decline to provide the paperwork.

Many TPAs do not have the funds and have no way of knowing when or if it has been deposited when they prepare distribution paperwork.

Back when I was working with pooled accounts, we would have required that the plan be made whole. If the participant refuses to refund the excess, then employer should replace those funds. Typcially a letter from the plan's attorney to the the former participant and their IRA provider threatening legal action gets a prompt return of the money.

Pre EGTRRA I had some clients with MPP and PSPs that shared a single investment account. We did only annual valuations. We never had any problems with this, BUT they were all small plans that did not require an annual audit. At this point, why wouldn't they merge the two plans and get rid of the MPP?

Our document does call for forcing participants to an IRA rollover if the balance is between $1,000 and $5,000. We are advising our clients to follow those 4 steps. I have heard from several clients who found the person with the IRS letter forwarding program. I have not personally heard from any who were unable to find them once they completed those steps. I can't say if that means it works well, or just that I didn't happen to get the call.

We are anxiously awaiting IRS regs on that topic.

Isn't one of the requirements for the automatic rollovers that the participant has been given at least 30 but not more than 180 days to make his or her decision? Because of that, we do not believe that you can establish a rollover on the basis of returned paperwork. However, if the 4 steps outlined by the DOL have been taken to allow them to be declared a lost participant, we do set up an IRA for them.

I don't know if it is require by law, but when my husband retired under the Civil Service Retirement System he received a breakdown automatically.

It is my understanding that if the employer has sponsored a SIMPLE, they are not eligible to establish a 401(k) until the following year.

But the thrift savings plan is only one of 3 plans that the USPS has. You need to verify which plan sent the notice. The other 2 are CSRS and FERS. (Sorry I don't remember what the acronyms mean.) If he's retired and was a participant, he's probably already receiving monthly annuity payments from CSRS. I don't know the rules for FERS.

Definitely need to consult a tax advisor because the exemption is cumulative over a lifetime -- if they've previously used part of it the limit will be lower.

A foreign national who is in this country and legally permitted to work can obtain a Social Security number. Is the problem that these individuals don't know that, or are they illegals?

Sounds like another good reason why a prudent fiduciary doesn't purchase an illiquid investment in a retirement plan!

It's a facts and circumstances test, and we don't have nearly enough facts in your post.

And it is my understanding that LLCs taxed as corporations issue W-2s to the owner/employee. That would also overcome the problem of the owner not having income for plan purposes in a year when the business has a loss.

If the plan covers only part of the workforce it can fail.

Since the GUST restatement deadline was after the EGTRRA deadline, it seems unlikely that a GUST document that did not include the EGTRRA provisions would have been approved. Are you sure that is the case?

Surely you guys know that the IRS wrote the book on mean! Landlords and bookies are all just wanna be's in that arena.