K2retire

Add something about what they can do if you don't do what they say to your explanation. Most people don't understand they nuances of retirement plan rules, but pretty much all of them understand that the IRS doesn't follow logic and has the power to hurt them.

And how does your mail merge do with collecting the signed amendments from all the clients?

It's been a few years (pre PPA) since I worked on DB plans, but we used to set them up with 9-30 plan year ends to accomplish the same thing for a caelndar year business.

We are just starting to use a similar service called Egnyte.

Are they also prefunding those employer contributions for the employees?

Variation on a theme: First filing on 6-23 and second filing on 8-30 both have the incorrect/unrecognized signature indication. Third filing on 8-31 indicates a valid signature. All three show filing with an extension. Client has now received a bill for late filing that calculates to $25 per day from August 2, 2010 to August 31, 2010. Any theories why the extension is being ignored?

But I have worked with similar plans where the contribution for the employees of the corporation would exceed the 25% deduction limit. In that case, the rest has typically been paid by the partnership and a corresponding accounting entry to the partner's capital account made.

Perfect, thanks!

After half an hour on the EBSA web site, I wasn't able to find the final reg. about the 7 day deposit rule -- only the proposed reg. Does anyone have a link or a PDF of the final reg? A client's new HR person wants proof that I'm telling her the correct deadline.

Is the corporate partner also an adopting employer in the plan? Is the contribution for the partners being paid by their companies (the sole prop. and the corp.) or by the partnership?

Curiously, this much of that reg. was regularly quoted in that office! Larry, I suspect that some of those plans would meet the hardship rule, but no where near all of them. And since the question was never asked, there is no way to know. Ironically, the staff was regularly told to call clients who had inquired about plan terminations to remind them to get everyone paid out before the end of the year (requiring that the termination date be before 12-31) to avoid another year's annual administration fee and 5500 filing.

I've helped numerous SH plans terminate mid-year and never heard this before. At one former employer, I'm sure there were hundreds of termination that were never tested.

I've seen approved documents both ways. Some systems assume that if you select SH, you should not select a testing method. Others assume that you must select current year testing with SH.

The deadline for depositing deferrals for employees (whether owners or not) is usually 7-10 business days after the date of the paycheck from which they are withheld. For self-employed individuals or partners in a partnership, the deadline is after the earned income has been calculated for the year, usually the due date of the tax return.

Why are you amending to require testing on a SH plan?

Thanks Tom.

The joys of dealing with bundled service providers!

Obviously not. But what do you do about it? And if the numbers were different so that it did pass BRF, are you required to do a general test?

If the plans don't pass coverage separately, and the company with the lower match formula has no HCEs, what additional testing is required?

Since plans are not required to have aq custodian, it seems unlikely that it would be a problem.

Short version summary of what they already told you: In general, plans can pay investment related fees. However, paying fees for an HCE while not paying them for an NHCE is likely to be discriminatory and therefore prohibited.

What about the anti-cut back rules? In-service distributions at a particular age age usually a protected benefit.

QACA plan with a per pay period match of 100% of the first 1% and 50% of the next 5% of pay. Someone miscalculates and deposits too much match for a handful of participants (including 1 HCE). Most of the match percentages are insignificant (3.63% or 3.72%) of annual comp., but a few are in the 5-10% range for the year. I would expect to correct the excess because it is caused by a failure to follow the terms of the document. I'm being told that because the plan does not provide for a true up, no correction is made when the deposits exceed the expected percentage either. Thoughts?

I'm having a stress moment. Is a contribution considered to be deposited when received by the recordkeeper, or when postmarked?

"IRS" and "logic" don't necessarily belong in the same sentence.