bevfair

I have seen some posts on this topic but many of them are several years old. The RBD for a participant who is not a 5% owner is April 1 of the calendar year following the later of the year in which a participant attains age 70 1/2 or retires. Under this particular document, post-SBJPA, the client elected to provide the option for the participant to elect to receive distributions upon attaining age 70 1/2 or to defer receiving the distribution until actual retirement. The effect of this provision is that the participant who is 70 1/2 has the right to receive an in-service distribution. My questions are 1) do you calculate this distribution as you would an RMD? 2) Is it taxable as an in-service distribution or as an RMD? 3) Once the participant makes this election is it permanent or is it an annual election? I've found nothing in my doc to provide clarification on these items. Any insight would be greatly appreciated. Thanks.

@Sieve - How did you handle correcting the filings with the DOL? Amended 5500s? I only have 3 years of returns to amend so not a big deal, just want to make sure I cover all the bases. Thank you.

It is the ADP test. The testing software indicates that I have match on the excess contribution of $0.05 for 2 HCEs that may need to be forfeited in order to avoid a discriminatory rate of match. It makes no sense to me.

Calendar year plan with current year testing. Recharacterization of refund as catch-up gets us a pass on the ADP test but requires a $0.05 match forfeiture for 2 HCEs. Do these forfeitures really need to be done or can we consider it de minimus since the ACP test passes with them included?

The participant was deferring at 3% for the year. In December, the payroll company's system caused a change in his deferral from 3% to $3.00. This continued into January and also affected his match. Am I correct that for 2011, the company needs to make a QNEC of 50% of the missed deferral amount, plus earnings, plus applicable match and earnings? But for 2012, they can choose to do nothing since the participant can still recapture this missed deferral over the course of the remaining 11 months? Is the client limited to a QNEC of 50% for 2011 or can the QNEC equal the total amount missed? Thanks.

I have a plan document that is written with 3 groups. Group 1 is the owner, group 2 is participants with more than 35 years of service and group 3 is all others. If the sponsor wants groups 2 and 3 to receive the same contribution percentage, can I code my testing system to allocate based on 2 groups? Is there a risk that in doing so, if discovered under audit, the IRS/DOL would question why the doc has 3 group but the test only has 2?

Does the form require original signatures for filing? Or is it acceptable to get the client to sign and scan/email or fax back to us for filing? I didn't see this addressed in the form instructions and when I called the IRA helpline they said it could take up to 30 days for a response....was hoping to have these done before then. Thoughts?

For 2010 - would this plan now qualify to file 5500 EZ since all other participants were paid out during 2009? And if the assets that remain in the plan are less than $250,000, is an EZ even required? ie no filing needed at all?? I seem to recall that you couldn't go from filing a 5500 to not filing at all but that was many years ago and now can't find anything to support that.

Am I understanding this correctly? The client has SH match of 100% up to 4%. Then an add'l 100% up to 6% and this satisfies ADP and ACP safe harbors? What about the requirement that it not exceed 4% of compensation? To add a twist to Connie's scenario, if the client put in the 3% non-elective and then a fixed match of 100% up to 6%, does this too also satisfy the ADP/ACP safe harbors? Thanks.

Any suggestions on how to deal with a client who thinks they want to submit?? Corrections were made using on-line calculator but the 'practice' of being late has not yet been corrected. Thoughts?

Has anyone had a client receive a letter from EBSA/DOL with regard to late deposits being reported on the Form 5500, with the "recommendation" they file under VFCP? And if so, did you file under VFCP?