Lou S.

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.

Under 100 on first day, no audit required. The 80-120 rule is OPTIONAL that allows you to file under the same method as the year before. Nearly every client we have ever had has taken advantage of the 100 - 120 corridor to continute to file as a small plan and nearly every client we have ever had has also dropped the audit when the fell below 100.

Just got our first "late filing notice" on a plan with a "good" 5558. I hate the IRS.

That's not what the IRS says.

You will have a deduction problem. The maximum employer deduction is 25% of pay, whether that is called profit sharing or matching doesn't matter. So if you are the only eligible employee and your wages are $100K, the max deductible er contrib will still be 25% or $25K. edit: plus the 401(k) deferral. oh and if you are or will be 50 on or before 12/31/2010 you can make the catchup contrib as well so you are limited to the $47K in your original post.

If your plan offsets T-H for match received, yes on P#1 & P#2. Is it better to switch? Maybe. Depends on turnover and what you are providing. I'd guess that a 3% NE safe-harbor would problably work best with 2% t-h and additional gateway if needed but without seeing demographics and knowing the employer's objectives it's just a guess.

Yes, you can do that. Though you'll probably want to amend to current year testing for the second year and you would then be locked in to current year testing for 5 years. Also if it is a small plan, watch out for top-heavy. edit: also if you have multiple HCEs the HCE average could be 5% and if you have HCEs over 50 they can make cacth-up contributions too probably.

I'm not aware of anything in 72(p) that would restrict you to 50% of the deferral account. Unless your loan program limits it to 50% of the deferral account then I would say the loan limit is 50% of total vested account balance not to exceed the deferral account total (since that is the only source they can borrow against).

Yes per capita allocations are allowed in a PS plan.

I'm pretty sure it is all covered in 410(b)(4)(A)-© And If you have an age and service condition that applies uniformly to all ees that 410(b)(4)(A)(i) - (ii) pretty explicited states its OK to excluded those people from testing. It is 410(b)(4)© that becomes problematic IMO if you bring in, or cover, people who don't meet the plan's general eligibility condition, such as an "anybody employed on the effective date is eligible" or "any one who is a participant prior to making eligibility more restrictive is still a participant" that you can run into testing problems in operation. They may or may not be discriminatory but it would be based on ee population.

Yes. If no contrib is being made to DB they you essentially default to the DC rules as if you did not have a DB/DC combo.

See §1.401(a)(9)-5, Q&A 3 You'd use 8/31/09 adjusted for contributions and distributions through 12/31/09.

No 204(h) notice is required. If you are submitting for a DL you need the Notice to Interest Parties. We give an SMM that says plan is terminated as of X date and your are 100% vested in you account as of X date along with a withdrawal package that says return this completed withdrawal form within Y days or we may rollover your balance to an IRA as the Plan is now terminated, assuming no annuity language is in the Plan. Hope this helps.

Personally I don't see a problem with either of these methods, the other people simply don't meet the entry conditions. Where you would run into a problem would be having an amendement to the plan in a "relatively short time after adoption of the plan" that then raised the entry to 21/1 dual entry. That in my opinion would be a pattern of amendments designed to favor HCEs and would fail testing. Though the predecessor service would most likely be a discriminatory providion favoring HCEs as I don't think there was a predecessor business in this case so you'd be picking up service from an unrealted business for just the owner as I understand it here. Though maybe I'm making a faulty assumption.

PBGC plan? We had one like this several years ago and niether the PBGC nor the IRS had a problem with the majority owner waiving along with spousal consent also waiving. But like I said it was several years ago and their positions may have changed. The plan was also underfunded and in employer was in bankrupcy at the time so that might have something to do with the PBGC & IRS both approving it.

We go one too about a month ago. And gave a similar, "not required, no withholding response"

I have to admit I'm confused by the RMD rules for cash balance plans. Am I missing something obvious in the regs? Do I convert the hypothetical account balance to an annuity benefit and that is the RMD using the DB rules? Or do I treat the account balance like DC Plan and simply divide by the applicable table to get the RMD? What happens when a 5% owner continues working, getting contribution credits and interest credits but is alos recieving RMDs? If treated like a DC plan no problem, if annuity method; do I recalculate each year based on account balance or add the current year annuity eqivalent of this year's contribution credit to prior year RMD annuity benefit? Hope this question makes sense.

What does your document and 415 amendment say about comp for allocations and testing?

Is a short PY? If yes prorate. Is is a full 12 month PY but 401(k) becomes effecive 11/1, then don't prorate.

Is this a cross tested plan passing on a benfits basis? If so you are OK assuming you pass all relevaent tests under the general test. If you are relying on a proto-type with the "traditional 70% 410(b)" coverage then no because the sole NHCE is going to get 3% and sole HCE is going to get (3 + X)% if you make a PS contrib so for purposes of 410(b) I don't think your NHCE is considered benefiting in t his case.

There are no maximum age restritions for participating in a qualifed retirement plan. I believe this goes back to ADEA. No problem for someone age 70 1/2+ making 401(k) contributins if they are covered by a plan.