PensionPro

Here are some prior threads, you can probably find more using the search function. http://benefitslink.com/boards/index.php?showtopic=41934 http://benefitslink.com/boards/index.php?showtopic=35798

Yes, see DOL Advisory Opinion 2002-03A.

You have a described a rather complex situation. Here are a few guidelines: various types of compensation from the same trade or business are determined in the aggregate; compensation from different trades or businesses are determined separately, then aggregated. Why would you use compensation from unrelated employers in your testing?

The analysis is fact-specific. You can have a situation where the medical practice is the common law employer and the PEO is merely the payroll agent. Or the PEO can establish itself as the common law employer and lease the employees to the recipient.

Who is the common law employer?

Apparently, you are talking about a payroll service provider arrangement, and not a leased employee situation at all. You should be able to transfer the assets to the MEP. I am assuming the medical practice is co-sponsoring the MEP.

You don't have to study the reference guide if you don't want to. You need to study the study guide and refer to the relevant sections of the reference guide(s)/recommended reading. The relevant sections may be different for different people. The final outcome depends on your experience, abilities, diligence, etc. It is however possible to pass the test without absorbing every jot and tittle in the reference material. Best wishes.

Thanks for all the helpful comments, it is much appreciated.

I came across this DB plan in an odd situation that needs advice. The facts: one-man DB plan got overfunded by a million plus dollars due to risky investments that paid off. The owner dies and benefits are due to his wife, the beneficiary. The issue relates to the excess assets. I see that there are two options. 1) We are not sure the sponsoring entity is still in operation, but I believe the beneficiary should get paid out, the excess assets should revert to the sponsoring employer, and the IRS will laugh all the way to the bank to deposit the excise tax. 2) The wife can continue sponsorship of the plan with her own company (not sure at this point if she even has her own company) and gradually absorb the excess assets. Other options are not obvious to me at this point. Any advice and direction is appreciated. Thank you.

I think it depends on the nature of the engagement. If the engagement was to be a "Form 5500 preparer," the provider is under no obligation or position to make observations regarding the plan's qualification status. If on the other hand the provider is engaged to provide full-service compliance services the provider should provide in writing an opinion or disclaimer regarding the plan's qualification status. In any event there is insufficient information here to determine the plan's qualification status. We have encountered situations where the document was restated every year, i.e. every time there was a service provider change. We even had a client who had two documents with conflicting provisions effective for one plan for the same period. In these instances, the plan sponsor did not know or remember what document was in effect.

The Service retains discretion and is under no obligation to treat the failure as having been corrected if it is discovered upon examination. While it depends on the circumstances and the mindset of the examiner, the plan may be required to correct the failure (in a manner acceptable to the Service), pay a sanction, and enter into a closing agreement. From RP 2008-50: "Appropriate use of programs. In a particular case, the Service may decline to make available one or more correction programs under EPCRS in the interest of sound tax administration."

Yes, ownership is based on the greater of the overall or voting stock percentage.

See 1.414(q)-1T Q&A8 and IRC 318(a)(2).

Here is the IRS contact information: http://www.irs.gov/retirement/article/0,,id=96919,00.html

Follow this trail: http://benefitslink.com/boards/index.php?showtopic=30538

Let's leave the W-2 out of this. 3401(a) wages are remuneration for services performed including the cash value of remuneration and benefits paid in non-cash form. Sections 3401(a)(1) through (a)(23) list the specific exceptions. Is the value of the health insurance one of the exceptions?

You can avoid the short year limit pro rations by ensuring the document defines the limitation year as the 12-month period.

5c of the 5500-sf should be equal to or less than 5b. The 5500 instructions are similar. Seems to be an error in the error message.

Fee disclosures and reasonable contracts may be another area. http://www.fiduciaryadviserlaw.com/blog/20...ealers-and.html

One possibility is they are investigating improper revenue sharing arrangements. http://www.investmentnews.com/article/20100207/REG/302079986

Typically, the only additional cost on the administration side is the annual base fee, and the infrequent document fees. I will be able to look for the EOB cite next week, unless someone else is able to do it before then.

Some firms do this (splitting plans to avoid an audit) routinely. They checked with a big name ERISA attorney, and told him about the Tag Q&A. The attorney provided a written opinion stating that splitting plans is not considered avoiding the ERISA reporting rules. You may also want to look at the EOB, it talks about this issue.

You may be able to request a funding waiver for 2010 based on 'business hardship'. See Rev. Proc. 2004-15, esp. Section 3.

Contributions to a 401(a) qualified plan are one of the acceptable methods of providing fringe benefits under the Davis Bacon Act. As such, the plan must comply with ERISA, the IRC, etc. just like any other qualified plan. Plus, with the Davis Bacon Act.

1) Closely read the plan document especially with regard to the gateway minimum. If you can give the additional contribution just to the NHCEs who are causing the failure and not violate the terms of the plan document, feel free to do so. Otherwise ... 2) You have the option of amending the plan for the year according to 1.401(a)(4)-11(g) and providing the additional contribution to those NHCEs. All of this is assuming the question relates to a 2009 calendar year plan.