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The regs say that elective contributions of keys are treated as employer contributions. No exceptions are provided for excess contributions or excess deferrals. §1.416-1. Questions and answers on top-heavy plans M-20 Q. May elective contributions be treated as employer contributions for purposes of satisfying the minimum contribution or benefit requirement of section 416©(2)? A. Elective contributions on behalf of key employees are taken into account in determining the minimum required contribution under section 416©(2). However, elective contributions on behalf of employees other than key employees may not be treated as employer contributions for purposes of the minimum contribution or benefit requirement of section 416. See section 401(k)(4)© and the regulations thereunder. This Question and Answer is effective for plan years beginning after December 31, 1988.

Situations where the owners/key employees are compensated from PW plan assets for services performed in various other capacities. This kind of scenario is going to be rare, but it happens. One owner we worked with insisted he should be paid reasonable compensation from plan assets for wearing the trustee hat. Since the original post refers to a TPA, I assumed it is not a self-administered plan.

Yes, TPA fees can be paid from plan assets including from prevailing wage money. Only caution is prevailing wage funds should not be used to pay plan administrator/trustee fees/compensation for administrative expenses in providing fringe benefits if the PA/trustee are owners/officers .

One prior discussion: http://benefitslink.com/boards/index.php?showtopic=44923

May plans participate in the DFVCP if they have already received correspondence from the Department of Labor or the Internal Revenue Service? Plan administrators are eligible to pay reduced civil penalties under the program if the required filings under the DFVCP are made prior to the date on which the administrator is notified in writing by the Department of Labor of a failure to file a timely annual report under Title I of the Employee Retirement Security Act of 1974 (ERISA). IRS late-filer penalty letters will not disqualify a plan from participating in the DFVCP. A Department of Labor Notice of Intent to Assess a Penalty will always disqualify a plan.

Beginning with post-1998 plan years, SBJPA provided that instead of performing two separate restructured ADP tests, a plan may perform a single ADP test that compares the ADP for all eligible HCEs with the ADP for not otherwise excludable NHCEs. 401(k)(3)(F)Special rule for early participation – If an employer elects to apply section 410(b)(4)(B) in determining whether a cash or deferred arrangement meets the requirements of subparagraph (A)(i), the employer may, in determining whether the arrangement meets the requirements of subparagraph (A)(ii), exclude from consideration all eligible employees (other than highly compensated employees) who have not met the minimum age and service requirements of section 410(a)(1)(A). The special rule is found under 401(k) only, and not under 410(b). Hope that makes sense.

It can not be used for 410(b).

Maybe, just maybe, they are allowing 15 logistical days for the funds to be received and deposited by the participant. How do the institutions justify their policies when you ask them?

Have you considered VCP? RP 2008-50, Sections 6.02(6), 6.07, 12.02(3).

Codes starting with 1 pertain to DB plans and should not be used for DC plans.

The plan's advisors need to timely and proactively communicate on this issue. http://www.reish.com/publications/article_...m?ARTICLEID=429

Courtesy of the EOB: 1.a.Examples illustrating the 415 crediting deadline. 1.a.1)Example - return not on extension. Corporation X maintains a profit sharing plan. The limitation year is the calendar year. X's tax year also is the calendar year. The IRC §404(a)(6) period for the 2010 tax year ends March 15, 2011. The 415 crediting deadline for the 2010 limitation year is April 14, 2011 (i.e., 30 days after the IRC §404(a)(6) period for the 2010 tax year). Employer contributions made by April 14, 2011, that are allocated as of a date in the 2010 limitation year are annual additions for the 2010 limitation year. But employer contributions made after April 14, 2011, that are allocated as of a date in the 2010 limitation year would be treated as annual additions in the year made (i.e., for the 2011 limitation year), not as annual additions for 2010.

From the 1996 ASPA meeting: ASPA: What is the deposit due date for a top-heavy contribution to a profit sharing plan? (For example, where a DB plan also exists and the profit-sharing plan provides the top heavy minimum.) IRS: This is not a 412 issue, but it is a qualification issue. Therefore, probably need to fund the contribution by the 404(a)(6) due date (include extensions).

Our experience with the Datair Pension Reporter software and support has been top-notch. No complaints. All our 5500s were e-filed by 10/11/10.

Check out this prior discussion: http://benefitslink.com/boards/index.php?showtopic=43314

I stay awake at night wondering why there are so many safe harbor match plans with only the owners participating ...

Since we are trading war stories, we had a so-called one-participant plan, a doctor. One year suddenly the client says after the work is completed I hired a few employees last year, but I did not tell you because they did not work long enough. Come to find out these were rehired employees who were immediately eligible upon rehire. Not the first or last time we had to redo work because of client's decision to provide selective information.

I agree that for about 34 participants, the count should be exactly accurate.

Yes, it is much more difficult than you could ever imagine. Had a large takeover multiple employer plan with 1000s of participants. Same participants had multiple accounts (some had wrong SSNs), multiple accounts were set up for beneficiaries, alternate payees had separate accounts, several were on LOA, etc. Needless to say, various adjustments had to be made.

Datair 1, Boss 0

Just asking. What happens if someone accidentally attaches the 2008 audit report instead of the 2009?

Also see prior discussions here: http://benefitslink.com/boards/index.php?showtopic=46501 http://benefitslink.com/boards/index.php?showtopic=11640

The 5500 instructions state that "one or more ... administrative penalties may be assessed or imposed in the event of incomplete filings or filings received after the due date unless it is determined that your failure to file properly is for reasonable cause." With the electronic filing requirement with its edit checks, it makes it difficult for practitioners to argue reasonable cause that the dog ate the homework or the Schedule SB or the accountant's opinion. The filer may be liable for the penalties for incomplete filings.

After careful review, the details of the particular situation point towards an ASG. The law firm calls him a "junior partner." Most likely the clients of the law firm see Attorney C as one of the attorneys of the firm, and not as as an outside consultant or of counsel. Attorney C's only income on his individual Form 1040 is the 1099 income from the law firm. He seems to be [sort of like] a non-equity partner, but instead of paying him on K-1, they are issuing a 1099. Thank you for the extremely helpful responses. I am still open-minded to any other perspectives on the subject.

Final boarding call ... any opinions out there? Thanks.