Lou S.

Yes you can have seperate formulas if so provided for in the document and it passes testing. With no HCEs the testing would pass automatically so it's just a question of getting it the document.

He has a zero balance after payout. I assume the current year contribution get's no weighting in earnings so no earnings on the current year contribution, just pay him out after it hits the account. You can get a new distribution form for the residual payment if you need one. You did a valauation as of 9/30 right to get the payout? Why not just do an additional allocation from 10/1 - 12/31? Alternatively allocate the g/l for the whole year carving out what was already allocated to the physician. But if the plan terms already indicate that an interirm valuation is done for "large distributions" then it may also tell you how to allocate fo the year.

I was afraid of that. Thanks. Fortunately though it won't cause an overfunding problem. I was just thinking back to the days when uncapped actual salary was used for 415 limit was wondering if that got grandfathered when the IRS recently decided that each year was capped at the limit; I guess not.

I'm having a brain cramp. Employee age 70. High 3 consecutive comp is years for participant is 99, 00 ,01 Actual comp 230K, 240K, 240K 401(a)(17) limit for years 160K, 170K, 170K If Eggtra amendment so provides comp limit 200K for each year. For purposes of the 100% of comp limit is his high 3 (230 + 240 + 240) / 3 = 236K is it (160 + 170 + 170) / 3 = 166K is it 200K if egtrra amendment allows for "walk back" of 200K comp limit?

This may sound cynical and I'm sure there are many valid reasons to have insurance in a DB plan beyond generating commisions for the broker, but I haven't really seen them in practice.

Gap period income got axed a few years back, maybe with PPA if forgret whic actual law did away with gap period income. Yes, though at this point I'd probably wait until the deposit is actually made to do the refund and 5330. I mean what do you do if the client never makes the matching deposit? Others may have a different view.

Plan Administartor's responsibilty for maintaining all records to establish benefit payment eligibility. If the Sponsor couldn't be bothered to maintain good records I have little sympathy for them. I will note though that coding someone D is no guarantee they will be removed from the SSA lists. We have had several participants who were properly reported with the D code still recieve the SSA letter.

If they impute income, do they get to impute taxes too?

For 1, are you doing the valuation on a cash or accrual basis. That should answer your question. For 2, how are forfeitures being used in the plan? If added to the contribution very likely show it as 2012 and reallocate it. If used to reduce contributions or pay admin fee very likely just show in 2013 when you process. Ideally you'd have a system in place to do it at the end of the plan year since presumably you knew they had a 4 year break the prior year but sometimes ideal doesn't happen.

Terms of the plan should indicate if you off-set the TH minimum by match recieved or not. And yes once you make any allocation it has to satisfy top heavy.

Informally from the podium of several conferences I have heard IRS representitives expess the opinion that no compensation = no service. I'm not saying I agree with that opinion but I have heard it on more than one occasion.

record keeper is an idiot have them tell you what code section allows them to apply 100% of the exess payment to interest. Estimate the APR that would generate and then ask them to justify that as a reasonable rate of interest under 72(p)

It varies by auditor. We've had some wrapped up in a few weeks. Others have dragged out close to 2 years.

Check your document to see if it allows for in-service. If it does, sure you could take a taxable distribution or roll over to IRA. Though as the sole participant why would need an IRA? If it doesn't you could amend your document to allow it. You should talk to your record keeper or custodian of assets as to what forms they require. Distribution would be reported on a 1099-R not a W2. You are probably the ERISA Plan Administartor and you are required to prepare the 1099-R though that is something your custodian of assets or third party administartor could prepare on your behalf. You should as them about the scope of their services.

Tell him to go read IRC sections 401 - 416 inclusive. If he finds something that allows an employer to make post tax ROTH contributions (not just employee ROTH deferals) to the plan tell him you'll do his plan administration for free for the next 5 years.

No. You have to included them.

Don't see why you can't pass the 70% test if you treat those who only recieve the SHNE as not benefiting.

Scannig is cheap and easy. That's what we do.

We had an audit that had a typo on some signature dates the year got put in accidentally as X+1 instead of X in a few spots and no one caught it. The IRS was threating a closing agreement over the "late" adoption of the amendment but we were able to produce e-mails, UPS overnight reciepts both ways at te time of the amendment showing everything was done in year X and that year X+1 was a typo. Eventually they relented but I think we went back and forth several times before they agreed. As others had said if th IRS wants to take a hard line you may be out of luck but my experience is they are usually very reasonable if there are no real problems with the plan and it is just a form over substance issue.

That's odd, most will let you do it if you pre-pay before they send the money out. If doing it as you suggest yes I think the IRS position is this is treated as a contribution subject to plan terms which can be problematic at times for ex-employees and general testing and allocation conditions. You could try a private letter rulling though that seems excessive. I'm not saying this is the best idea or if it would even work but the Sponsor could take the position that they are simply restoring plan expenses to head off a potential fiducicary breach lawsuit. Again not saying that is the correct position but it seems like one that could potentially be supported. edit - BG's response is better than mine.

Can the Plan Sponsor simply write a check to the prior carrier as a Plan Expense?

relius has a fix. they can send you a link to a mircosoft file to run depending on if you have 32-bit or 64-bit operating system. It is an issue with some older windows operating systems and the SSA program.

I'd tell her to contact the Plan Sponsor. Yes I realize they are out of business in this case, but I don't think that changes the answer. I guess now it wouldn't be an issue since instead of forfeiting it would presumably be rolled over to an IRA in the missing participant's name but that's now and not 2005.

For 2012 - I'd issue corrected 1099-Rs now. For 2011 and earlier it is a stickier issue. I'm not sure which VCP program this would fall under but it would seem that VCP should be able to handle something like this.

I'm a bit confused by your post but if I understand correctly you are asking what will be taxable if you take your full vested balance? The ROTH-401(k) contributions you made are non-taxable since you already paid the taxes on them when you contributed them. The rest of the distribution is taxable and subject to the federal early withdrawal penalty of 10%. Depending on what state you live in there may be an additional early withdrawal penalty.