Chippy

We are working on a plan termination and there is one participant left to pay out. THis is sort of a unique situation, here's the background. The plan belonged to a restaurant. THe restaurant burned down about 15 years ago. Then the owner died and the plan was forgotten. The owner's wife became aware of it and contacted us last year to help her with the termination. We brought the plan up to date, and have paid out all the participants except for one. This remaining participant has a balance of about $20,000. They have tried to locate him, but keep hitting dead ends. Here's the real problem, in addition to not having a last know address, they do not have this guys social security number. They can't open an IRA for him without the SSNO. So, does anyone have any suggestions on what to do with his money so the plan can be closed? thanks

On what line of the Sch. I should the insurance premiums paid from the plan be included?

Has anyone switched from Relius to the FT William administration software system? We are considering it and I was wondering if anyone that has already swichted has any problems/issues with the conversion process. And if you switched, are you happy with the FT William administration system? Thanks

If the plans have different plan year ends, then you can not do a combined ratio percentage test. That was in the ERISA outline book. THe 9/30 plan year changed to a 12/31 plan year end, so going forward I can do the ratio percentage test, I just don't know how to test the short plan year.

I have two plans, a controlled group. One plan, a 401(k) Plan, has a 12/31 PYE. The other plan, a money purchase pension plan, has a 9/30 PYE. Since the plans have different plan year ends, I realize that I have to do the average benefits test to pass coverage. In 2011, the MPPP changed their plan year end to 12/31. After 2011, I should be able to do the 410b test to pass coverage. For 2011, I'll do one test for the 12/31/2011 PYE in the 401(k) and the 9/30/2011 PYE in the MPPP? But how would I test the 12/31/2011 short plan year for the MPPP?

I have been having lots of questions this year concerning what is included in compensation and what is excluded. This particular plan uses 3401(a) as their plan definition of compensation. Can someone tell me what types of compensation is included in 3401a comp? Would education reimbursements or relocation expenses be included? Does anyone have a chart of the different types of compensations and what in included in each? Thanks

A participant is hired on 1/3/2012, the first working day of 2012. eligibility is 1 year and quarterly entry dates. Would this participant enter the plan on 1/1/2013 or do they have to wait until 4/1/2013?

Uncashed benefit payment checks are being redeposited to the forfeiture account in the plan. When the checks are being deposited, i've been including them in income on the 5500. This past year, one of the checks was reissued. Where would I include this on the 5500? Is including the redeposited checks in the income on the 5500 the proper place for them? thanks

I have a client that is considering swithing from Safe Harbor 3% non-elective to the Safe Harbor basic match. They are asking if participation will increase with the match. I think it will, but are there any articles or studies out there on how switching to the SH match will effect participant and deferral rates? Thanks

Thank you all. My first thought was to add it back into the assets and move on. Just wasn't sure if that was the correct way to fix it. It's only one policy for an active participant. They are going to cash in the policy now and put the proceeds back into the plan.

The insurance guy called and told me that was the way to correct it. I have all the amended returns completed and reading over the DFVCP procedures, I thought that it might not apply in this case. I just didn't want to file 12 amended returns and then have EBSA come back and say we should have filed through DFVCP. The value of the policy is so small compared to the total assets of the plan. Do you think filing 12 amended returns will trigger an audit?

one of my clients has an insurance policy as part of the plan assets. Back in 1998 when the plan changed recordkeepers, the insurance policy was dropped off of the books. It has now resurfaced and they want to amend the returns to properly reflect it in the assets . The 1998 to 2010 5500's have to be amended. Would filing through the DFVCP be the correct way to fix this?

I have a 401(k) profit sharing plan that is top heavy. The 401(k) part of the plan has immediate entry. The P/S part has one year and age 18. The company is only making the 3% minimum contribution. Do the participants that are only eligible for the 401(k) portion of the plan share in the allocation of the forfeitures? (as part of the top heavy minimum)

We took over administration of a plan in 2002. I recently found out that the plan has an insurance policy. The policy was taken out in 1991. There was no mention of the insurance policy when we took over the plan. History of the plan prior to 2002 is sketchy. The company would like to correct and file under the DFVC program. I'm just not sure how to help them without knowing at what point the insurance policy was not included in the assets. Any suggestions on how to help them or where to start?

This particular plan does not have a SHNEC. I was just asking in general. So even though the participant terminated in a prior year, he has 415 compensation paid in 2009 which would have been eligible for deferral and should be included in the adp test? Correct?

A participant terminates on 12/31/2008. His final paycheck is paid in 2009. Is that employee included on the 2009 ADP/ACP test? No last day rule for match. Would they also receive a SHNEC on that compensation?

I have a cross tested plan with 5 groups. The profit sharing contribution is allocated on 414s comp, which is compensation paid for hours worked. It does not included bonus, overtime, vacation or sick pay. The gateway test has to pass the 5% test and I am using 415 compensation. One of the groups receives 5% of their 414s compensation. This group is failing gateway. To correct the test, can I give each employee the addtional amount needed to get them to 5% of 415 comp? Which would mean each employee would receive a different percentage, it would not be pro-rata? and in this group there are highly compensated employees. Since they are HCEs, do they have to receive an additional amount to get to 5% of 415 comp? I'm thinking no, since they are hces. But since they are part of a group, I wasn't sure if I had to treat everyone in the group the same. thanks for your help.

One of my clients is a law firm. They have two plans set up, one for the partners and staff and another plan for the associate attorneys. The partners and staff plan receive an employer non-elective contribution, cross tested, every participant is in their own group. The associates do not receive an employer contribution. The plans pass coverage using the ABPT. I restated their plans for EGTRRA on a VS document, no change to the standard language. My question, is 1) should I submit both their plans for a favorable determination letter? and 2) should I include a Schedule Q with the applicable demos? and 3) which demos should be included 5 and/or 6. I've never submitted a 5307 with a Sch. Q and I was wondering what everyone's experience is with the Sch. Q and demos. thank you

The 383,200 is 245,000 plus 138,200,( the comp over the social security wage base.) It's been a long year so far and it's only January 11! thanks for you help

For the Safe Harbor, the participants enter the plan on the first day of the quarter after they are hired. There is a one year wait for eligibility for the profit sharing. Comp is based on date of participation, however due to the different eligibility, all participants receiving safe harbor received 3% of their full year 415 comp. So, in a top heavy plan, everyone received 3% of their 415 comp in the safe harbor contribution. For the profit sharing contribution, the company wants to contribute another 3%. Since the plan is top heavy would the additional profit sharing contribution be allocated based on comp or comp plus excess? For someone earning the mas, would the basis be 245,000 or comp plus excess of 383,200? This is a non-standardized Relius adoption agreement.

I'm working on a plan, 3% safe harbor is allocated on full year compensation. The plan is top heavy. So the safe harbor covers the top heavy minimum. They also would like to make an additional 3% profit sharing contribution. The p/s contribution is allocated on an integrated basis. Would the 3% p/s contribuiton be allocated as if the plan is top heavy, straight 3% to everyone eligible, or would it be allocated as if the plan is not top heavy on compensation plus excess compensation. THanks for any help to clear this up.

the client would like to make a 3% profit sharing contribution, in addition to the match.

So, if this is a profit sharing contribution, it is allocated per the document. And if 3% or less, then it would be comp to comp. , with participants entering mid-year getting a little more to bring them up to 3%. If it is meant to be the top heavy minimum, then they would take the match into account and allocated enough to get everyone to 3%? The non-elective contribution would be less than 3%? Do I have that straight?

Yes, the match is used towards top heavy

There seems to be a difference of opinion in our office as to how to allocate an integrated profit sharing contribution when the plan has a match and is top heavy. Can someone help to clarify? Plan has a match, 25% up to 4% of compensation. The profit sharing contribution is integrated with social security. Plan is top heavy. If the client wants to makes a 3% profit sharing contribution, how would that be allocated? Compensation is from date of entry.