K2retire

If I'm reading this correctly, you're saying that up until now the plan sponsor has tracked funds by participant, but not by money type. Is that correct?

Most likely any entity in which you have the ability to control things (like being a director) is going to be related and therefore prohibited.

Undoubtedly less than the 6years of late penalties and interest.

Now that our prototype document asks if there are any self employed participants, I've been astounded by the number of business owners who can't answer that same question.

That's what I've been told. Although I can't claim any personal research to verify that.

Ordinarily revoking the SH requires 30 days advance notice. So unless the notice in the OP was a notice of discontinuance of the SH, it is too late to do it effective 1-1-09. Depending on how quickly it can be sent out, it could probably be discontinued some time in January.

I believe that the spouse would have to consent to naming the mother as beneficiary for it to be a valid designation. I've heard of cases where people have named someone as the primary beneficiary of a small percentage (5% or less) and left the spouse as the primary of the remainder in order to be able to take a hardship for that person.

It's kind of scary that an employee benefits firm doesn't understand your question about a controlled group. You also need to find out if they are an affiliated service group.

It is more likely to be seen as a prohibited reversion of plan assets to the employer.

The main reason the term "draw" is confusing is that different people use it to mean completely different things. One can't assume that this client uses it the same way any other client does.

The recent EPCRS update details how the QNEC is supposed to be calculated depending on the plan provisions. I believe it is Rev. Proc 2008-50.

So if the value goes up dramatically some year are you going to be trying to do an interim valuation to make sure that they participants share in the gains? I don't think you can do one without the other.

Unemployment rules vary by state. The best place to ask this question is your state unemployment office.

Many plans exclude non resident aliens, but I've never seen one that actually excluded illegal aliens. Double check the language because they are not the same and non resident alien for plan purposes is different than what most people think it is.

ASPPA's Retirement Plan Fundamentals course is a great place to start. It is a two book series designed for novices.

See IRS publication 560.

Sieve, your logic seems reasonable to me. On the other hand, it doesn't seem reasonable that this order that is not a QDRO can perpetually restrict the distribution of funds either.

I am not an attorney, so I can't give legal advice. If the employer is a corporation, the owners are specifically exempted from personal liability by statute unless some exception can be found. It the employer is a sole proprietor, he or she is personally liable. Other business structures vary.

Glad to hear I'm not the only one whose employer doesn't believe in the right to free speech!

But for the use of the female pronoun, this sounds much like a former client of ours. The business owner in this case notified us that he was transferring the plan to another service provider and provided us with signature guaranteed wire transfer instructions. Several months later he contacted us again. Apparently his tax preparer had explained that he could not transfer the entire plan to his personal IRA, and he wanted to transfer it all back to us. We declined to accept it, so I don't know how he ended up resolving the problems.

Does the IRS have rationale?

The deferral limit is per person at $15,500, not $46,000. But assuming you didn't really mean deferrals, the NEC as a doctor and the comp as an author are likely to be a controlled group. If so you would only get 2 rather than 3 employers that can go up to the 415 limit.

Despite Bird's excellent explanation -- the above is still the correct answer!

I agree. Although I have a vague recollection of having seen a document that addressed this by granting the service credit for years with the prior firm only to employees of the plan sponsor on a specific date.

I wish my clients understood things after only one explanation -- and remembered them from one year to the next!