chc93

Per-period match generally has options to do a true-up or not. Is there a similar option for pay-period SHNEC.. such that your snafus won't require a true-up.

If you aggregate for 401(a)(4) testing, wouldn't the employees in Plan A require the 5% gateway?

We have also gone the next step and have the plan administrator scan/email or fax or mail page 1 with their signature(s) before we electronically file. Gives assurance that they know of such form that will be filed with the IRS, and maybe also have some assurance that they actually reviewed the form.

Also, I think states tax distributions from employee contributions (deferrals) and employer contributions differently when distributed. If you don't have a breakdown, you may be taxed on amounts that are not subject to state tax, or not pay tax on amounts that should be taxed.

From the original post... ---Document calls for any employer allocation to be reduced so as not to cause "the annual additions to exceed the maximum permissible amount". Put another way... if the plan is a 401k, and at least $5,500 has been deferred, isn't the "maximum permissible amount" for a catch-up eligible participant $56,500?

See REG 1.436-1(j)(1)(iv)... Definitions... Plans with zero adjusted funding target. If the adjusted funding target for the plan year is zero, then the adjusted funding target attainment percentage for the plan year is 100 percent.

However, note that for a plan termination and all assets have been distributed (April 7, 2013 in the example), the plan is eligible for a pro-rated premium for 2013 for Jan-Apr. We were told by the PBGC that the pro-rated premium is up to the month in which the Form 501 is signed and received by the PBGC... so this is what we did. After filing and paying the pro-rated premium, a premium refund of 1 month was returned to the plan sponsir, since all assets were distributed in the month prior to filing the Form 501. (note that this was in 2011) Don't have experience with non-coverage during a plan year.

You will need to call PBGC. I don't think you can make the non-coverage determination yourself without PBGC blessing.

masteff... thank you very much. I didn't look in the instructions before posting (my bad). Shows how good BenefitsLink is.

I have a calendar year plan that terminated as of 12/31/2013. We will be filing the 2013 Form 5500 in the near future. The plan will be distributing all assets in February. So the filing deadline is 09/30/2014 without extensions. Has anyone heard if we cannot use the 2013 Form 5500 with dates 01/01/2014 - 02/28/2014. We've done this in prior years (used the proir year form for the current short plan year) when necessary. Thanks...

Wait... if the first distribution year is 2013, then an RMD for 2013 must be taken... but can be as late as Apr 1 2014. But now, if the total distribution is taken rolled to an IRA in 2013, the 2013 RMD must be paid first? correct? I agree that there is no 2013 RMD from the IRA. So there will be only the 1 RMD in 2013 (from the plan).

We had a plan once that fell below 100... but the sponsor actually wanted the plan audit, since it was "independent" and gave him some comfort that someone else was looking at the plan... even with the cost involved.

We have that situation. Semi-monthly payroll, with salary deferrals and loan payments only on the 15th of the month paycheck. If I recall correctly, the only "downside" is payroll administration, since every other paycheck is different. "Upside" for me is there is never a receivable at Dec 31 to worry about.

But the 5500 and 5500-SF Line 4 asks specifically if the name and/or EIN of the sponsor has changed, then enter the name, EIN, and plan number from the last return/report. This is all that we've done in the past. Why do we now need to also file 8822-B...

We have plans such as this. As posted above, same sponsor, EIN, but different plan numbers... 001, 002. No audit for each plan. But, have to set up and maintain 2 plans, which is an added cost (but much less than an audit, and no audit hassles).

According to a recent Sungard/Relius technical update, QNEC for failure to implement a salary deferral election or improper exclusion of a participant from salary deferrals do not have to satisfy the "QNEC" regulation (100% vested when contributed). So they say that forfeitures should be able to offset the QNEC. http://www.relius.net/News/TechnicalUpdates.aspx?ID=998

Can the company make a loan to contribute to the plan to cover the remaining distributions... we've seen this done before.

I just logged in to FIRE without problems.

We use ftwilliam, and spreadsheet import is seamless... no problems at all. They provide an Excel template that is easy to populate.

What about contacting the rollover institution...

We have a small plan with pooled trust assets and a ROTH deferral "money source" in addition to other money sources (employer PS, regular 401k deferrals, rollovers, etc). As you say, I thought the "separate account" only meant to keep the ROTH account separately accounted for its own share of gains, contributions, etc.

We've almost always had auditors request compliance testing results also. But, I don't ever recall it being mentioned in the audit report itself.

Not only what Lou says... from ASPPA Government Affairs Committee email this morning... From IRS representative: "The Form 5500 and Form 5558 are processed through different computer programs. Because the Form 5500 has a lower number, it is processed first. Then, the Form 5558 is processed. If the Form 5500 (which was submitted in early August) is processed before the Form 5558 (which was timely submitted in late July), then an erroneous penalty notice will be produced and sent to the plan sponsor." (emphsis mine)

But make sure that you pass coverage by ratio (70%)... since you most probably will not have a reasonable classification and therefore cannot rely on the average benefits test for coverage.

A client just walked in the office. The 5558 was filed on July 30. The 5500-SF was electronically signed on Aug 8. I'm not sure when, but he got a 5500 late filing penalty notice for $200 (I assume 8 days at $25 each day). Interestingly, the "date of the notice" for this penalty is Sept 16. He paid the $200 penalty on Sept 10 (very diligent client... the due date for the penalty is Oct 7). Today he got the approved extension to Oct 15. The "date of the notice" for this extension was Sept 9. So now, because of this IRS "problem", we've gotta go try and get the $200 back... at least, I think we should. The client said to forget about it if too much trouble. If there's enough of such clients, the IRS stands to collect a bunch of money that shouldn't have been collected.