K2retire

Yesterday someone on a computer in South Korea opened 2 new accounts in my name and began transferring money from my real account. Fortunately Bank of America's fraud people caught it almost immediately and shut it down. Unfortunately my legitimate checks and ACH transfers are now bouncing.

Duplicate deposits of a contribution is one of the few examples that the IRS gives of a Mistake of Fact that can be refunded to the employer.

You still have a typewriter?!?

No &s or () is consistent with the online SS4 application process, so it shouldn't be a complete surprise to anyone.

Austin, I've been doing the calculation for years. As a numeric formula, I understand it completely. But I've always struggled to explain it to clients. Yours is the best verbal explanation I've seen. Thanks!

It appears that we have a solution. The owner of company A will sign a corporate resolution agreeing to allow company B to assume sponsorship of the plan.

We are trying to reconcile conflicting instructions and not certain whose direction to follow. (My current employer's procedures often call for the plan trustee to act in situations where I would have expected the employer to act.) The plan in question was originally established for company A, with the owner of the company as the sole trustee. Last year we received instruction from the trustee to restate the plan with Company B as the new sponsor. As we investigated the relationship between the two companies we learned the as part of a bankruptcy proceeding the ownership of company A was transferred to another individual. The trustee started company B and hired the majority of the employees that had worked for him at company A. The new owner has instructed us to terminate the plan. Whose direction would you follow in this situation?

We have been contacted by an individual who claims to have a power of attorney from the sole trustee of a 401(k) plan that we administer. We have not yet seen the document. I thought that long ago I had heard that one can give a power of attorney as to one's personal affairs, but not as to one's fiduciary duties. Is that correct?

It should also be documented in the business records, such as a corporate resolution declaring the contribtuion that would be filed in the corporation's minute book.

How does the document define plan compensation?

We have also been increasing our fees as we went along. What I was asking about is the IRS fees associated with filing to correct if they DON'T get the restated document in place by April 30.

We've been advised that when amending a plan to move to immediate vesting, the change can ONLY apply to someone who has at least one hour of service after the date of the amendment. I'm not sure if that is specific to the prototype document we use. We were quite surprised by that answer from Corbel's legal staff.

I believe that is correct, but would add that, at least in Kansas, you only get a tax deduction if you use their plan. I'm not positive if that is true in all states, but it is something to ask before investing in another state's plan.

I believe the EPCRS correction is a retroactive amendment to change eligibility that is submitted for a D letter. Do depending on whether you normally submit amendments for D letters, it may not by much of a change from what you proposed.

We are very much a no frills, few options shop. Our loan policies are all written to only allow 1 loan at a time and not permit refinancing. The hassle is not worth it when there is so much chance for error on the part of the employer doing the payment withholding.

The agreement will say what you tell them to say. So long as you and your ex agree to it, it's unlikely (but not impossible) that the judge will object. If it does say half, be sure it says half as of a particular date -- preferably a date on which you have a statement.

Why would you leave the payroll coding the way it was when it is clearly wrong? I could, perhaps, see offering the employee a choice of whether to correct payroll or the plan, since it will mean his withholdings were lower than they should have been. But even so I think that could be a tough sell in an audit.

Participant elected Roth, plan received Roth. It seems like the only thing to fix is the W-2 showing it as pre-tax.

If Joe makes $50,000 a year with no deferrals, his employer contributions are based on $50,000. In a plan that excludes deferrals, if Sue makes the same $50,000 but defers 10%, her employer contributions are based on $45,000. Not a great way to reward someone for planning for retirement, but it can save the employer a few bucks. PS I don't thik excluding 125 contributions from W-2s is a state law issue. So far as I know that is a Federal rule. There are some other state things that are reported, usually in box 14 or 16 that can impact the total compensation, however.

Has anyone seen any indication of what the fees might be for a correction if the restatement is not completed by April 30? We're looking for a hefty amount to quote to motivate clients who are still dragging their feet.

Just one of the obvious omissions.

There was another recent post about how to prove someone was not owed any money on a plan that had terminated years earlier, but the former employee received a notice from the Social Security Administration that they had a benefit in the plan. Apparently an SSA had been filed, but never shown as distributed. The employer had disposed of the records after 6 years....

As of 1-1-2010 the delinquent filings must be made electronically.

I have a situation where a plan has failed their 2009 ADP test with one HCE. Normally, a refund is required and send the HCE his refund check, but this case is somewhat different. Let say his refund is $2k but only has $1k left in his account balance. Why do you ask?? He took two good size hardships in 2009 totalling $38,000. Do I take his current balance out ($1,000) for the refund, or does the hardship cover his full ADP refund?

On some computer systems trustee transfer is a transaction type coded to not generate a 1099-R. In that case it doesn't have a true meaning to the plan in any legal sense, it's just computer code.