david rigby

Don't forget that a QDRO could have also included something awarded under the "child support" portion of 414(p). I'm not suggesting you look for trouble (or a subsequent spouse), but only reminding that any divorce opens the possibility of a QDRO.

What I mean is there is no mention of a QDRO. It's possible that the questioner assumed (but might not know for sure) that there is no QDRO, primarily because of the living arrangement. Don't look for trouble, but don't forget to check that which should be checked.

Check for QDRO?

Doesn't Box 1 already exclude all deferrals? Perhaps you mean "Box 1 less comp prior to entrydate"?

I believe all of us, including the IRS, would be better off if the IRS started by using Sal's solutions and advice.

You could take a direct approach and ask a question: RetirementPlanQuestions@irs.gov

I believe that should be 414(p).

Duplicate post. http://benefitslink.com/boards/index.php?/topic/54299-naughty-owner/

You might need a legal opinion from the attorney for the non-profit. Even if not needed, the N-P might want to get one anyway.

You could wait for the ERISA attorney to weight in. Or you could run! The payment must be reported on Line 8d. Also must consider how to complete Line 10b and 10d. However, this is much more than a 5500 problem. Perhaps the owner wants to consider the $42K as a loan between the plan and the participant? Prohibited transaction. BTW, was there a distribuable event?

Just my hunch, but you should ask the plan's attorney: For example, on 08/31 you adopt a resolutiion to terminate the plan with a DOPT of 10/31, then on 09/30 the sponsor dissolves. Does the DOPT automatically become the dissolution date? Maybe. I don't know, and it might not make any difference, but it might also be something to get clarified.

I'll say no. Gray Book 2011-7 Funding: Grace Period Contributions A company has a calendar taxable year and sponsors a pension plan with a calendar plan year. Which of the following combinations are acceptable for a contribution made during the 2010 §404 contribution grace period (January 1, 2011 to September 15, 2011)? a) Deduct contribution in 2010, reflect on 2010 Schedule SB. b) Deduct contribution in 2010, reflect on 2011 Schedule SB. c) Deduct contribution in 2011, reflect on 2010 Schedule SB. d) Deduct contribution in 2011, reflect on 2011 Schedule SB. RESPONSE a), c), and d) are acceptable. IRC §404(a)(6) deems a contribution made after the last day of a taxable year to be made on the last day of a taxable year if the payment is made on account of such taxable year. A contribution is considered to be on account of the 2011 plan year when reported on the 2011 Schedule SB and thus cannot be deducted on the sponsor’s 2010 tax return.

Because any plan must have a plan sponsor. Also possible that the plan terms will state that the dissolution of the employer will automatically terminate the plan.

Employment termination date is one thing. Plan termination date might be another. Not clear from your facts, just asking: it seems unlikely the plan termination can be later than corporate dissolution date.

If designing such an arrangement, don't forget to deal with the possibility of an NHCE becoming an HCE.

Agree with Effen. I've heard this described as the "mailbox rule."

Agree. Are you the actuary? Likely, every actuary will tell you the purpose of all "actuarial assumptions" is to provide the best estimate of anticipated experience; a "best guess", in lay terms.

Depending on how the plan is worded, you should be able to make catch-up contributions.

That's a good point. Maybe they could allocate it as additional match to all NHCEs who already are getting a match. (Hey, I'm just looking for a simple solution here.)

Not without creating an enormous liability for additional PS for the remaining employees. Why additional liability. The ER deposited $100K for match, but found out they only needed $99K, then just define the extra $1000 as PS and allocate it to all participants. Or something like that?

Cite?

You miss the point. Can the "excess" be assigned to be a PS contribution, thereby eliminating an excess?

Excess = PS?

820 contains some exceptions in 820-10-15-3. Verify whether any apply to your situation.

Does the governmental entity know what types of services they want?