TPA Bob

We were advised by the DOL that the Form 5500 had to be signed by the Plan Administrator (Plan Sponsor optional) in order to be accepted. In fact had to amend a 5500 for just that (filing signer signed as Plan Sponsor and not Plan Administrator). The 5500 instructions on page 6 seems to indicate this as well. I have been reading the Form 5500 filing guide from Sungard and they indicate that the "DOL will not consider a filing that has only a plan administrator's electronic signature as a proper filing". What has everyone been doing?

11 is Pearl Harbor. Tom, where did this come from?

Yes, I wanted a report that would have each participant as a row, then then sources reading left to right, 401(k) pre-tax deferral, Roth 401(k), SH match, etc. Seems odd that the one item that cannot be extracted into a spreadsheet is ending balance (without going through a lot of cut and paste). This is a Plan that is going to a new investment provider and I need to send beginning balances. So I did the old fashioned way expect did not use a typewriter. Thanks.

Does anyone know how to export into an excel format a report that reports employee name and SSN, and ending balance per participant per source of money? We want the sources in columns and then each row represents a participant. thanks.

We have taken a different approach, which does not solve the AB example above but gets closer. All of these arrangements are safe harbor with QNEC, with the cross tested profit sharing to maximize contribution. We tell our clients (yes, law firms) that each partner gets to elect whether or not they will contribute 401(k) (22,000 of the equation) but they will not have the ability individually to say if they will get the profit sharing piece - that is a Partnership decision. The end result is A gets his/her 54,500 for 2009 and B will receive 32,500. Or A gets 29,350 (22,000 plus 3% 7,350) and B gets 7,350. Anything outside of this we advise against. And if they ignor they do at their own risk (knowing the exposure). Without any guidance one can argue the issues. While I appreciate the steps provided earlier, the bottom line is that each partner's distributable share of income is not impacted by the election to contribute or not. And when this is the case I think you have a difficult time saying the contribution of 54,500 to one partner and 0 to the other partner, when not affecting overall distributive share of partnership income, was done at the partnership level.

I've asked this question before - I have not found anything regarding a statute of limitations, etc.

We have a participant who wants to use his funds to purchase a raw tract of land. In order to make it work he will have his Plan account purchase a 50% interest and his father-in-law will purchase the other half. Father-in-law will pay cash for his share, Plan participant will have to borrow funds to complete the transaction. They will probably establish an LLC taxed as a partnership to hold the property. We have looked at the rules overall and my greatest fear is whether the father-in-law would be considered a disqualified party. Appears that they are not related based on attribution rules. Anyone have concerns with this transactionf?

Many thanks to all

Thanks. As a follow-up, what would you say if all of the individual plans used one investment platform (account), all participant directed? Or would you suggest each have its own investment platform?

Have a client that is buying up medical related businesses in several states, all doing the same type of business. The client owns 100% of each separate entity. Each entity has about 40 potential participants and all together have about 200 potential participants. Could he have each entity adopt its own plan, each plan identical to the other, file separate Forms 5500, and avoid going over the 120 plan limit for audit? Of the 200 participants only about 40 will actively participate.

Have had numerous client calls but now one who is serious, has a 401(k) plan with self direction. Participant (shareholder attorney) who wants to investment in gold coins. Would presumably obtain, put is a safe deposit box. My first thought was you cannot do this but seems upon a quick reading appears you can invest 401(k) funds in gold coins. I find no guidance or private letter rulings on the subject. Does anyone have any thoughts other than run. Thanks.

Bird's right. Pigs get fat, hogs get slaughtered. If he doesn't pay himself a 'reasonable' comp, he'll get slaughtered by the IRS. All are right, except the dividend is not reported on a 1099 but is reported on the K-1 from the S Corp

But the K-1 cannot be prepared without the contribution information, assuming the taxpayer is going to accrue the contribution and deduct in prior year. And most accountants will not understand what compensation is for retirement plan purposes. We have to explain all the time. We usually ask for a detail of total distributable income and any guaranteed payments and do the calculation ourselves - much easier.

We currently have a client with the same issue. Would seem that since for federal withholding and FICA the employee can reimburse the employer for any deficit the same would hold true for the 401(k) - a procedure in place to have the employee pay the deferral amount back to employer. Any thoughts?

Have a safe harbor 401(k) plan with the 3% QNEC. Physician group where each physician's PC has adopted the Plan. A physician for one of the PCs passed away during 2006 and the spouse is refusing to fund safe harbor contribution attributable to the physician's eligible compensation. What happens to the Plan if this contribution is not made bearing in mind the participant is highly compensated? Thanks in advance.

Thanks for all the replies. I will review the utilization and report back to all later.

Yes, passes both the ADP and ACP tests, and without considering the graduated match, the match passes 410(b). Thanks.

Have a Plan we inherited that has a 50% match on the first 3% of deferral, 75% match on the next 3% of deferral (4-6), and a 100% match on the next 3% (7-9). I know the plan not only has to pass acp testing but also 401(a)(4) for a right or feature. Appears to me that each level of match has to pass 401(b) with respect to availability. All participants can defer at least 9% of their pay per the plan document (no cap). Of course it appears the HCEs are the majority deferring the full 9%. Is the 410(b) based on availability (which all participants have available) or is it based on the actual rate of deferral - in other words look at hces deferring at least 7-9% compared to nhces deferring at 7-9%. First time I have had this and prior administrator did not address. Thanks in advance

"You missed the point. The individual is using IRA and plan assets to finance a business in which he has a personal interest OUTSIDE OF THE PLAN. Therefore, he is using plan assets to benefit the business which is also a benefit to his personal interest." We have a personal tax client who is the majority owner of a C-Corp (through attribution) and is one of the named fiduciaries of the C-Corp's qualified retirement plan. They have an option to invest in Company stock and has invested about 80% of his retirement plan account balance in this stock. He certainly has a personal interest in the Company outside of the Plan. Would you say he has engaged in a prohibitive transaction? I do appreciate your input! Thanks.

So even though the transaction may meet the exception to the pt rules for Qualifying Employer Securities, it does not override other pt rules and that it would be deemed to be self dealing or a use of plan assets? In looking at the reference referred to it appeared that the issue was over loans made and not QES. Do you think it would make a difference if it were an investment in QES and not loans? Just wondering because I have received two calls this month on the same subject.