Kimberly S

QDROphile, I don't think you can amend away a government mandated requirement.

In this instance I would think you would NOT want rounding -- 60.15 is always going to be 60%. But if you round, 59.5% is top heavy too.

Bill: Check my match. I disagree with your statement below. If a participant defers 5% with the SH basic match formula, they will essentially get matched 100% on the first 4% that they defer. 100 % on the first 3% 50% on the next 2% This equals 100 100% on the first 4% deferred. Do you agree? They get a 4% match on 5% deferrals. The way I learned math, that would not be 100% of the first 4% deferred.

Another long shot, but our documents call for distribution "as soon as administratively feasible" after a particular date. Could it be argued that it is not administratively feasible while the litigation with the participant is pending? Of course the participant will object since he or she is probably wanting the distribution ASAP to pay lawyers to defend this very suit.

I have worked with many plans that specifically excluded owner HCEs from a particular contribution type while allowing it for non-owner HCEs (or vice versa). It depends on the type of document and the type of allocation formula. If you're using a prototype document or have not previously been doing 401(a)(4) testing there may be other considerations.

If he was a minority owner, he is already liable. What is the advantage of terminating?

What does the document say about how contributions are allocated?

Have you tried freeerisa.com?

What does the document say about how the match is calculated?

I thought Missouri had put the death penalty on hold of late. I guess that just applies to murderers and such, not those of us tryin' to make a living.

Does the document allow the NHCEs to get a different profit sharing allocation than the HCEs (cross tested groups)? If so, they probably can't go back very far and still stay within the limit of depositing the contribution by 30 days after the tax filing deadline. But if the document calls for an allocation to everyone (pro rata or permitted disparity allocations) and they didn't do it correctly, they probably need to go through a correction program for all years that they skipped.

How would you have completed the form if the benefit had gone to a survivin spouse? It should be the same.

So in this case, you would accept the direction of the bankruptcy trustee to terminate the plan, but require the direction of the plan trustee to make the distributions?

Plan sponsor is in bankruptcy. Under the terms of the document, the sponsor is the plan administrator. Two individuals are the plan trustees. The attorney who is the bankruptcy trustee wants to terminate the plan. As recordkeeper, it is our usual procedure to require that this instruction come from the plan trustees. The bankruptcy trustee is refusing to allow the plan trustee to sign the resolution to terminate the plan and the distribution paperwork. He says that we must accept his signature because being bankruptcy trustee makes him automatically the plan trustee. (The trustees have completed distribution paperwork to receive their own balances, so we know they are around and could sign.) I'm confident that being appointed bankruptcy trustee for the company does not make someone automatically a plan trustee. However, as bankruptcy trustee for the plan sponsor/administrator, I'm wondering if we should accept that signature on the termination resolution. I'm unsure about the distribution paperwork. What do others do in this situation?

This information on their "force out" provisions to an automatic rollover should be included in the Summary Plan Description that is required to be provided to all plan participants when they enter the plan. If a force out distribution is what has happened, you should also receive a form 1099-R showing the distribution from the plan and that it was rolled over so it was not a taxable distributions.

That is one of the reasons that we have decided to only allow quarterly entry on our EACA plans.

Will AAA, Inc. be dissolved, or continue to operate as a susidiary of the others?

The IRS filing is optional as far as the IRS is concerned. Some TPAs require that their clients do it. It is very expensive and time consuming, but can be worthwhile depending on the plan and the client's situation.

If the overpayments were rolled over, he needs to notify the participants that the excess is not eligible for rollover. If he is not able (or doesn't want to) collect the overpaid funds, he must make the plan whole.

The plan document will tell you what compensation to use to calculate the contribution.

Is the sole prop an adopting employer? If not, how would he be able to deduct the contribution on the 1040 rather than the 1120 even if he had a large profit?

If the problem was created by the participants failure or refusal to act, why shouldn't they pay the associated costs?

Do they pass testing when combined?

If I were looking at this from the perspective of an employee I would think they should match every dollar I defer. Many articles about financial issues imply or specifically state that most employers match every dollar. As a practitioner, I've seen match formulas from none to 150% of deferrals. The truly relevant information is what similar employers in that geographic area are doing.

Yes, you can open an IRA at most banks. You could also use a brokerage firm or a mutual fund. It depends on the kind of investments you want to use. You should be asking about rates of return and fees as you are evaluating the options. Even if they sent you paperwork, they are required by law to give you at least 30 days to make a decision. Take advantage of that time to learn about the options and also consult a tax preparer.