Dan

Your plan sounds like it can work. If your document was written correctly, you will be fine. Many advisor-provided plan documents I reviewed over the years had problems. They manage money, not write plan provisions. Hopefully you will be one of the lucky ones. And hopefully Morgan Stanley provided an updated plan document 3 years ago. If not, you will want to fix that.

I currently use Datair and used Relius for daily valuation until 2012. Datair, (being rebranded as CalcAir, after Datair was sold) runs on a dedicated server on Windows. It looks clunky and is menu based. Below is a Pension System image for a plan. Datair is fine for compliance testing. Compared to Relius, Datair is faster since it is not transaction based. Changing from one system to another is a lot of work. Plus, you lose the ability to access to historical system access. Asset tracking is different, census history is different, and plan specs are different. It works fine, but probably not be an easy transition.

Thanks for your replies.

A client is instituting a match for the first time. They requested the plan implement a quarterly vesting schedule. I have never heard of quarterly vesting. I asked a few colleagues and no one has heard of it. Has anyone here heard of this before? If you have, can you explain how it works or where I could learn more about it. The plan is currently being restated on a pre-approved document, which offers the standard vesting options. I expect a quarterly vesting structure would be permissible on a custom document. So, we could modify the pre-approved document and treat it like a custom document going forward. Any thoughts about that?

I don't think the old plan will have 140 participants the effective date of the change. There isn't a "later in the day" on the effect. It is effect is immediate, so think 12:00 AM. On that basis, the old plan will have 70 participants and the new plan will also have 70 participants on January 1. So they should be able to avoid the audit requirement. As for two plans in the same investment trust, that would constitute a Master Trust and an additional 5500 filing for the MT as a Direct Filing Entity. No designation as a MT is required, just more than one plan in a single trust. It seems to me that employers who use this strategy don't find it beneficial in the long run. It saves money for a year or two. But they have operational problems managing two plans. If the company continues to grow, they will have the same problem in a few years. This setup becomes too much of a burden to continue. So they bite the bullet and return to having a single plan.

I appreciate all feedback. BFlash, we looked into Pension Pal several years ago. It didn't meet my firm's security requirements at the time, so we didn't move forward with it. Perhaps we need to look into it again and see if something has changed. Thanks for the suggestion.

We are considering a change in systems. I would appreciate any feedback on the software options that other professionals use. Our clients have standard DC plans: 401(k) plans, 403(b) plans, 457 plans and also ESOPs. Some of our ESOPs are very complicated. Please let me know about your experiences with your vendor. How responsive are they about questions? Also, what is the one thing you wish your vendor did better. We are also considering Pension Pro. I would appreciate feedback about your experience with PP and how well it works with each vendor's system. Thanks for any comments.

If the K-1 reports earned income and/or guaranteed payments, that is generally included as plan compensation.

It would make sense to talk with a financial planner about your distribution options. There will be a cost, but you should have some comfort in speaking with someone who can help you get started on the right track. the cost would be far less than making decisions that in hind-sight were bad ones and could have been avoided. Don't talk with someone who will advise for free and/or wants to sell something to you. Go to a fee-only financial planner.

Yes. The plan would satisfy ADP with the 3% safe harbor for the year but would need to ACP test the discretionary match.

Yes, these participants would have a choice to receive matching contributions in company stock or cash. I am concerned about the disclosures as well, among a number is related issues. Always more to learn. Thanks for your responses.

A client is considering beginning to contribute a match. However, they are considering different ways to fund it. They have asked about offering the option of receiving the match in cash or in privately held company stock. The administrative complication is obvious. But would this funding arrangement be permissible?

I had the same question and learned that Form 5471 needs to be filed. If there was no 990 filed previously, one must now be filed so the 5471 can be attached.

A client is considering a merger with another client. Each firm has a DB plan and each plan would be fully funded prior to the merger. After the merger, a significant minimum funding contribution would be required. The question is ‘who would be entitled to claim the deduction for that minimum funding contribution?’ Would the successor firm be entitled to deduct the contribution or would that deduction need to flow back to the pre-merger firms? It seems to me that the successor firm should get the deduction. That seems to make sense but its important to be certain and I would like to provide some documentation to support my conclusion. Is my thinking correct and could anyone suggest documentation? Is there a certain way that the merger of the firms and their plans should be structured so the successor firm would indeed be able to claim the deduction? Thanks for any help.

The client received a deferral election from a participant and commenced withholding and remitting deferrals. But treated them as pre-tax when they should have been Roth. This went on for several years. The ideal correction is to create corrected W-2s for all involved years. Is there any simpler option, even if it is not as clean?