Lou S.

We came to the same conclusion when we researched a few years ago.

Great question! But unfortunately I think you answered it right here.

Not sure, I've never seen this particular set of fact but with the economy the way it is not surprising. You could try calling the reviewer who has been assigned to the case and see if they have a suggestion.

While we have done it both ways in the past I wonder, if B isn't buying A, how does B satisfy the exclusive benefit rule if some (or all) of the participants in the assumed plan A never work for B?

No. Unless there is an imposed limit on deferrals that would restict him to $5,000 if he was not catch-up eligible. Otherwise you don't have a catch-up until after you fail the test at which point you recharacterize.

fiona, thanks for the clarification. we amended out for everyone and couldn't understand why anyone would want to put themselves through gap period income if they didn't have to but I thought it was still optional, guess I was wrong on that.

My understand is that PPA eliminated it for most and WRERA (or PPA technical corrections) extended to excess deferrals that gap period income is no longer required. If your amendment(s) eliminated gap period income you no longer calculate it; but you could have kept the langauge for gap period income without it being a disqualify defect. That is you could make an optional election to keep gap period income. I don't think valuation method: daily, monthly, quarterly, annual or other changes this. Anyone have anything contray to this?

Unless there is a diffrent reporting code (and I don't see why there would be in this case), why would you do two 1099-Rs?

If the plan as whole is failing the avergae benefits test, how are you passing 401(a)(4)? My understand was if you failed the ABT you are dead in the water on cross testing and you need to either rasise benefits for some/all NHCEs or reduce benefits for some/all HCEs to pass if you are corss testing. Am I missing something?

We have done this too with mixed results Some have worked like a charm, others a few years later we get a "late/non filing" notice on the old EIN. Usually solved with a quick letter and a copy of the filed 5500 with item 4 circled.

I think something similar came up a few weeks ago in this thread which may be helpful - http://benefitslink.com/boards/index.php?showtopic=37665

I'd agree if the SH notice for 2011 was not already handed out. I think since it was distributed to ees and you are now less than 30 days from the end of the year the IRS would treat it the same as a mid-year change in 2011. Though I'm not aware of any formal guidance on these specific facts.

You can amend out a safe harbor match. But I'm pretty sure you need 30 days advance notice to participants so they may need to make the safe harbor match for one or more payrolls in January. edit Sungard has a nice pice on the steps required http://www.relius.net/News/TechnicalUpdates.aspx?ID=432

I don't think so. I think the IRS will treat the SEP as defined contribution/ individual account plan when you start looking at the 404(a)(7) combined limit. I think using a protoype allows you to have a SEP instead of a profit sharing plan but I don't think it extends the deduction above what you could get with a DB/PS combo.

What if it is a prototype or individually designed SEP? You are correct. I was only thinking model SEP. http://www.irs.gov/retirement/article/0,,id=111419,00.html

If you have a SEP it is the only plan you can have. You can't have a SEP/DB combo. edit - see next 3 responces - this was model SEP I was thinking of not prototype or individually designed.

I took it that they were going to issue a 1099-R for the loan and then roll the remainder since the account is under $5K. Agree that this probably should have been done awile ago and now VCP is probably best solution if his has been on the books for "years". I was just giving some ideas for how to physically default and issue 1099-R at whatever platform they are using if they don't have a good address for the participant.

Can you default the loan and send the 1099-R with the letter forwarding service? I'm not sure of any IRS or DOL rule that allows you to NOT default the loan and issue the 1099-R. edit - or what about using c/o the Plan Sponsor adress for the defaulted loan portion?

and ACP test On the deferral I'd assume that's a typo with $16.5K + $5.5K = $22K max.

Short answer is no qualified 1 man DB Plan if you have more than 1 employee.

Eliminate hardship withdrawals?

Is it a cost issue? If I had an EGTRRA doc, which we now do strongly suggest the client restate but I don't think it is technically required. i think there is some discussion about DC plans that were terminating and if they needed to restate or not is you do a serach of the forum. As long as you have all the amendedments timely adopted by the earlier of the end of the remedial amendment period or plan termination (EGTRRA, PPA, HEART, 415, WRERA, etc.) you should be fine. We always recommend to our clients getting a DL on termination and the IRS will let you know if you are missing anything.

I'm not sure I follow your question. All plans have to amend for current law upon plan termination.

Consent is not required for an RMD.

Excellent question. I'm not sure the IRS has given additional guidance but the "best" answer I found was from Sungard http://www.sungard.com/sitecore/content/ca...statements.aspx Though admittadly I can't find an exact date for that web posting thoush it appears to have been late 2007 or 2008 and all similar reference I found were also 2007 or 2008 which indicated "PPA restatements are likely years away" well some how the years have flown. If I wasn't such a cynic I'd say the IRS will have fromal guidance out before Cyle E is complete - hopefully.