Lou S.

I'm not sure if it is required but our PPA amendment from a large national document provider contained the following provision - If they included it, my quess is the IRS was requiring it.

Are you talking about the "In Plan Roth Conversion Option" from last year? If so, you have until 12/31/2011 to formally adopt such amendments retroactive to when you added the feature, presumably in 2010. We are going thought that right now with the plans that added it last year.

No because you have an increasing discretionary match which would be described 0% of the 1st 4% PLUS 100% from 4 - 9% That doesn't satisfy the safe harbor match rules.

The owners of Company A also own 100% of Company B, so they are a related employer. But does that automatically mean they must be covered by Company A's plan? Perhaps they arent required to be covered and the eligibility question isn't applicable. Company A's Plan does not have to cover the employees of Company B. But Copmany A's plan will need to pass testing with considering Company B's employees as non-benefiting since it is a controlled group if it doesn't cover the employees.

The IRS will presume the termination is involuntary, possibly leading to a partial termination, but the sponsor has the ability to refute that presumption. Good point. This is true assuming the sponsor has good records that the employee did in fact leave voluntarily. However if they have been showing he employee on PBGC premiums and paying them 2 years after the employee left, then my presumtion is the client doesn't have very good records. Though I fully admit this could be a faulty assumption on my part.

Jim I agree with you. We don't work much with leased employees but when last I researched it I came to the same conculsion under §414(n)(4)(B) that you had to count all service back to when you originally hired them through the leasing company for eligibility and vesting. I think in our document they would be treated the same as going from an ineligible class of employee to eligible class of employee when you formally hire them away from the leasing company in much the same way as someone who is an excluded union employee but becomes non-union. Anybody disagree with it?

Not to throw a monkey wrench into this for you but be careful the IRS doesn't determine a partial termination occured in 2009 due to the 50% drop in participation which might lead to restored benfits at 100% and once again being PBGC. I know on 5310 IRS submissions we've done of late they question every drop of more than 20% based soley on the drop in participant count no matter how small the plan.

I assume this was all done in 2011. If so then no RMD in 2011 for the new IRA since IRA balance on 12/31/10 was $0.00. If there was an RMD required it should have been processed by the decedents 401(k) if she was due a 2011 RMD. The second question is can he do a second rollover? I thought there was limit that unless it was trustee-to-trustee transfer you could only do a rollover once in 12 month period. Though admitadly I don't work much with IRAs and could have my facts wrong on this. The last question is, is this an inherited IRA or an IRA the spouse is treating as his own. If it is an inherited IRA, I do not believe it is eligible to roll into the qualified plan. Though agin my facts could be off on this. So in summary - no RMD required but I'm not sure if what he wants to do is allowable. Though that may not be the answer you were looking for. Hopefully someone else with more IRA experience can shed some light.

I don't have an answer to your specific question, but don't you have a 401(a)(26) problem with only 2 of 6 in the DB plan?

No required ones that I'm aware of. Though if you added In-Plan Roth Conversion last year I think you need to formally the adpot the amendment by 12/31/11 and I think Corbel has a snap on package for that but I may log an incedent just to confirm.

Viable approach.

Thanks Tom. That's exactly what I was looking for and like I said, I knew I SHOULD have know it.

I feel I should know this but don't. Company A sold all of its assets to Company B. Company B hired all of Company A employees. Company A has no more payroll and is terminating its safe harbor 401(k) plan prior to year end. Does Company A still get safe harbor relief for the year or is it subject to testing?

No problem at all. The only potential problems I see are 410(b), ACP and 415 but with only HCEs you pass the first 2 automatically.

I would say you have a $50,000 loan under the 12 month look back until at least 7/1/2012 and could not take a new full $50,000 loan until 12 months after the date of final payment.

Yes, short year. You have no history to go retrocative adoption to 1/1. A company can't sposor a plan proir to its existance as far as I know.

We are in the same boat and are dropping the prototype for VS

I thought partner deduction deadline got moved up to 9/15 about 2-years ago and that only sole-proprietors still had the 10/15 possible extended deadline (or 10/17 this year). Am I wrong on this?

OK, thanks guys.

For 2010 - MRC is 100K Max deductible is $200K. Can a Sole-prop on extension contribute the 100K by 9/15 to meet MRC and contribute an additional 100K between 9/15 and 10/15 for deduction purposes? If so would the additional 100K be shown on the 2011 SB for minimum funding?

Typically it is like extended were-away. Greater of plan benefit or top-heavy benefit. It's just that the top heavy benefit may be greater than the plan benefit for a long time. But usually it is somewhere in the plan document.

Schedule H is correct. You report the excess amounts prior to earnings.

Roth 401(k) contributions have all the charateristics and restrictions of regular 401(k) contributions with the obvious exception of how they are taxed coming out of the plan.

Thanks ESOP Guy. I agree that 1/1/12 would be a good solution for testing (at least from our perspective) but they are doing it for more than the 401(k) as they are bringing everyone in under one payroll system in September and won't running them as separate companies through the end of the year which would allow them to take advantage of the 410(b)(6)© transation rule. They could use until 12/31/2012 if they choose to do so but I think they need to run as seperate comapnies in the transition period to take advantage of it. Also merging in September ensures that 2011 is the final return for Plan B while merging at 1/1/12 creates a 2012 plan year.

I did a search and was going to start a new thread but this one seems close enough. I'm looking for guidance and afraid it may not exist. In our case Company A and Company B are unrelated. Both sponsor calendar year 401(k) plans. Company A purchases company B in April 2011. assume stock purchase and assume company B plan has no know compliance problems and has been independently audited for several years. Company A wishes to merge Company B's 401(k) into Company A's 401(k) plan September 2011. Does company B run a separate ADP test for 2011? If yes for what period? 1/1 - date of purchase? 1/1 through date of merger? Or does Company A run a single test for all of 2011 for pay and deferal to both A & B? Like the OP, because Regulation 1.401(k)-5 is still shown as "Reserved" I'm not sure what the correct answer is this case? Is there additional sorce guidance from the IRS on this perchance?