K2retire

At all 3 places where I have worked since catch up contributions began it has been standard practice to recharacterize deferrals as catch up if the ADP test failed. Your question confuses me. Is the person with the potential catch ups not the same person who would be required to take a refund for the failure?

If the information has previously been provided to the client (in the form of annual reports and such), why would the prior TPA have any further responsibility to produce the information?

Apparently the IRS letter writers were very busy last weekend. Most of my clients have no idea if they filed or not. It is interesting to hear that you're getting notices from people who know they were filed.

Eligibility is based on the the date of rehire, not the date you learn about the rehire. It sounds like on the actual date of rehire, the participant had not yet incurred 5 breaks in service.

I just had a conversation with someone at Vanguard who was so uninformed or so misinformed that now I'm questioning what I should already know. The subject was Vanguard's prototype money purchase pension plan document. Vanguard mailings earlier this year indicated that they have decided not to sponsor an EGTRRA MPPP document and that all plans on their GUST document must either terminate or be restated to another provider's document. They are encouraging plan sponsors to create at 401(k) plan with them, but they are not allowing the MPP money to be rolled into those plans. The representative just told me that the IRS has not yet decided when the EGTRRA restatements are due for MPPPs. Since I haven't worked on MPPPs for the past 4 years, perhaps I'm confused. I thought the deadline was 4-30-2010 for all DC prototypes. Have I missed something here?

The best solution is probably to start over with the property settlement. Since this asset cannot be transferred, what can the ex get of similar value instead? Many couples get hung up on each getting half of every asset rather than each getting half of the total.

We've heard from some bankruptcy trustees who were indignant that we would ask for something indicating that they were also supposed to become the plan trustee, and others who were equally convinced that they were not responsible for the plan. We have been advised that the bankruptcy trustee has authority to perform any task that would have oridinarily been the responsibility of the employer.

Of course, at this point that probably means amending the 1099Rs.

To avoid being deemed to own the other's businesses, spouses must meet 4 criteria: there must legal restrictions that prevent it (e.g. you must be a lawyer to own an law firm professional corporation, etc.), they have no minor children, neither has signing authority or any other management function on the other's accounts, and they do not live in a community property state. Based on your facts, they are a controlled group.

Are you marking a qualified plan as the type of entity on the application? It sounds like they think it is a taxable trust instead of a qualified plan.

If the can't or won't work with you on this (or any other issue) it's probably time to look into another provider who better suits your needs.

Does it HAVE to say it in the plan? Or can it be an administrative procedure? It is frequently and administrative procedure that does not appear in the document.

Or if they are an affiliated service group, the sole prop's can become adopting employers in the LLC's plan.

We are referring them to their attorney and/or accountant for the ASG determination, as we are not in a position to make it for them. The plan is a prototype safe harbor with no allocation conditions, designed to not require any testing other than top heavy (in years when they make a profit sharing contribution). We do not offer any plans that require 401(a)(4) testing as we do not have the software to do it. Your final paragraph gives me the detail that I would have missed. We'll pass it along for them to discuss with their advisors.

The change must happen at the start of a new plan year.

Safe harbor 401(k) plan was established in 2007 for a group of doctors who represented that they were an affiliated service group. Office space and employees are shared. Doctor A is the plan sponsor, Doctor B is an adopting employer. One doctor wants to make different contributions than the other for 2009. In response to the news that the plan requires them both to do the same thing, they have now decided that they never were an affiliated service group and Doctor B's part of the plan should be spun off into a new plan. If they truly never were an ASG (which I doubt) what potential problems do we need to fix for the years when unrelated employers participated in the same single employer plan?

The client may not find it so clever when they are reminded that they must deposit the safe harbor contribution for the other 51 weeks.

Did the employees who met eligibility prior to 12/31/2009 also pass a plan entry date in or before 2009? Or are you referring to those who would have entered the plan 1/1/2010 absent a plan termination?

You would be amazed at the number of seemingly competent adults who don't understand that. I suspect that many of them are the same ones who think that they aren't out of money if they still have checks.

Do you also presume they accrue hours for Jan 1, the non-business day? I've never thought about that before. But if the OP comes to the same conclusion with a better articulated reason, does it matter?

Many S corp owners have been taught to avoid taking a salary, in favor of paying themselves dividends, in order to avoid FICA and Medicare taxes. Remind them that they can only use W-2 compensation for plan purposes.

Theoretical excrement still smells better than actual excrement, at least in my book.

We've always taken the view that since January 1 is not a business day for our clients, anyone who begins working on January 2 has a presumed hire date of January 1.

The Erisa Outline Book also points out a possible cutback issue if your profit sharing formula has different contribution rates for HCEs and NHCEs.

But this would be the perfect time to amend to remove it for 2010.