Lou S.

I've always took level amortization to mean, not less frequently then level amortization. That is you can't have negative amortization, ballon payments, interest only or similar but I see nothing wrong with making excess payments to reduce principal. Though much like making excess payments on your mortgage it doesn't reduce your future scheduled payments just pays the loan off soome than originally intented.

You can't retroactively terminate a plan. But what is the problem with terminating prospectively? You already have a 5500 filing requirement for PYB 7/1/13 and PSP has no required contribution.

Assuming she is now eligible for the plan and an NHCE which as a new employee she would be unless she has more than 5% ownership in 2013 directly or through attribution. If she is new, she didn't make over the comp limit in 2012.

For cross tested plans we send out a resolution approving the contribution allocation. Doesn't hurt to have if the IRS audits the Plan. But technically I don't think it is required.

Isn't rule actually to distribute as soon as administratevely feesable? I suppose an argument could be made that it is not administratviely feesable until the QDRO is issued. Might be a stretch but I'd doubt the IRS would challenge it too much.

What facts were mistaken? Some forms have a box for % of pay and another for straight $ amount. He mught have thought he was filling out the box for $50 and put it into the 50%. Just throwing it out there not that I actially believe it. Like you Im not sure where mistake of fact might come in on this one.

If the election for 50% was valid the participant is out of luck.

EPCRS would be the best way to correct.

don't be the last participant to return a withdrawal form? don't forget the 25 HCE restricted distributions. recertify? Is this a PBGC plan? candidate for distress termination?

Mine has never asked, small employer. My wife's employer did ask to show coverage about 2 years ago and I believe they requested a copy of marriage cert.

Plan fees will increase.

The 3% safe-harbor has to be made to the terminated employees because you can't have hours or last day on the SH piece. The new employees are not eligible so they are not participants and get no contribution, unless you have split eligibility that lets them in for 401(k) which would also make them eligble for top-heavy.

That make sense. I agree with Belgarth. Given that the failure to make RMD is 50% excise tax, I'd advise the client to make additional distribution to satisfy the RMD if any required. I would not worry about it if there was a loss and RMD is smaller than actual distribution.

Maybe I'm obtuse but how do you process a 2013 minium distribution and then retroactively amend to a short prior year? Wouldn't the short year amenedment have to be adopted before 12/31/12 thus rendering the 8/31/12 valuation moot for calculating the 2013 RMD?

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.