Lou S.

Any deferrals from 1/1/10 - 2/28/10? Or any 2010 recharaterization on 2/28/10 test? It wasn't mentioned so I'll assume no. 2010 Catchup is 18,492.66 - 16,500.00 = $1,992.66 Amount tested in 2/28/11 ADP is $16,500 + 6,058.20 = 22,558.20 Up to $5,500 additional can be recahraterized as 2011 catchup if test is failing.

The loan is part of the participant's balance so I too agree fully with ESOP Guy.

We've done elctronic ones for so long now I'm not 100% sure but... 1) Local IRS office? they used to carry them anyway. 2) Not sure. In the past they took software generated forms. Did they change thier policy recently, say the last few years?

Well you learn something new every day. I thought for sure that would be a cut back in benefits but I guess not.

A reversion of excess assets is more common in an overfunded DB plan but in some cases it can happen in a DC plan - usually when there are forfietures than can't be allocated for some reason - like no compensation for employees. The excise tax is generally 50% of the reversion - though it can be reduced in certain cases with a qualified replacement plan though that doesn't appear to apply in your case (see IRC §4980). The reversion is also considered income to the Plan Sponsor and the Excise tax is reported on Form 5330 (more information can be found in the instructions to that form). Hope that helps.

That is a good question and I'm not sure I have a good answer but I think the answer is no unless the notice addresses it. That is the notice specifically says that HCEs will not be eligible. You may also have a stronger argument if HCEs were excluded in past years. It does bring up an interesting question can you have a Maybe-Maybe notice? That is can your SH notice say we might make a 3% contribution and it may or may not be made to HCEs if we do decide to make it? If you can should notices always be drafted this way for maximum flexibility?

Do you really mean after or before? Once they have completed the accrual requirements you can't have an amendment cutting benefits for the year or you'll violate 411. Otherwise I agree with SoCal's responce.

Was this a grandfathered SAR-SEP or SEP-IRA where employees where making IRA contributions? Did the acquirer purchase the stock or assets?

http://www.pbgc.gov/documents/10_instructions.pdf Not sure what the PBGC policy of waiving penalties is but on other issues I've had to deal with them they have generally been very reasonable.

If you have 5 or fewer (though I think that is what you meant by "no single owners") who get you to the 80/50 you may have one or more controlled groups between B, C, & D but I don't think you are missing anything here and it does not appear to be a controlled group from what you are describing.

VCP sounds like the way to go to fix this. The IRS might accept your solution or they might require the excess to be treated as a reversion to the Plan Sponsor sunject to the excesie tax if it can''t be allocated to anyone.

The 401(k) portion does not recude the SE's pay for PS calculation and the 401(k) portion doesn't go against the 25% deduction limit which I'm sure you already know. But you are right in that both are treated the same for payroll tax purposes. Ans yes that is one of the disadvantages or SE v Corp.

It is retained and never leaves the plan. It is not subject to the penalty in any way.

My understand is if you don't make the refunds by the 12 months dealline, you need to make a correction under EPCRS to correct which generally requires the plan sponsor to make some sort of QNEC/QMAC type contribution to correct the failure.

I would agree. The actuarial increase can't exceed the 100% of pay limit even if it is under the dollar limit.

yeah I agree, since you have no exculsions or other eligibility requirements they are employees therefore they are eligible.

Not aware of anything either. In the few plans that we have that invest directly in real estate the trust pays the taxes as a Plan expense. Though none of our plans that do this are located in New York.

The 100% owner of the bankrupt company who is also the plan trustee as well as the partcipant receiving the refund who is also is going through a personal bankruptcy. So assets in qual plan that were exempt are now going to taxable, subject to the backruptcy and hit with an exice tax - talk about adding insult to injury after his company went under with the economic colapse.

Unless this is a merger of plans, yes he will need to take his RMD prior to rollover.

Probably need to ask an attorney but I think it could be argued that it is a moving expense.

As the title implies a terminated plan of a bankrupt employer is processing late refunds for the 2010 year, after 3/15 but before 12/31. This is not an automatic enrollment plan with the 6/30 deadline. Who pays the excise tax and files the 5330 in this case when the Plan Sponsor is out of business, has gone through bankruptcy and now no longer exists?

The participant does get a 1099-R for income and it is treated as a distribution for that purpose so I'm inclined to treat it as such for Top-Heavy pending further guidance from the IRS. I was just hoping the guidance was out there and I just missed it.

Is the in plan roth conversion treated as an in-service distribution subject to the 5 year look back rule for top-heavy purposes or is it treated as a transfer to a related rollover source and inculded in the balance on the determination date?

Unfortunately I agree with you. I was hoping someone else had a different view and perhaps a citation or at least a tidbit from the IRS to support it. If they do I would be interested in rethinking. edit - Thanks Tom that helps.

If a partner has negative earned income for 2010. Effectively $0 compensation for plan purposes, I understand that the employer contribution is $0, the deferral limit is $0 and the 415© limit is $0. The question I have is, if the plan allows for Roth-401(k) contribution and catch-up contributions can the partner make a $5,500 ROTH catchup contribution under 414(v) for 2010 since it is excluded from 402(g) and 415? I did a few searches and scrolled through several pages of threads and didn't find anything directly on point so if this has been covered before I apologize.