jkdoll2

Why do I get some spam e-mail messagesin benefits link? Just the other day I got one in benefits link about viagra. I know I dont need viagra - I am a girl and hopefully Im not that old yet, ha!

Yes - only the ones that have defaulted and ANY NEW PARTICIPANTS.

One other thing - they are holding up all distributions for the plan (all other participants distributions), not just the Trustee's distribution. Who does become legal to sign on the distribution forms?

The trustee of a plan died. The plan is terminating. The mother of the trustee has taken over as trustee. There was no beneficiary form on file. The distribution for the trustee will be made out to his estate. The investment company is holding up the distributions because they want his mother and father to sign the forms since they are co-representatives on the estate. Does the investment company need both signatures or is just one of them o.k. to do the distributions? The distribuiton for the Trustee is not being made out to an individual - but to his estate.

1) The plan may be amended to reduce the matching contributions however, it is not longer a safe harbor match. Presumably the participants were given 30 days notice before the reduction in safe harbor match. 2) The plan loses it's safe harbor status for the plan year. The requirements for stopping the safe harbor match are: (1) make the match for the year to date (2) perform ADP and ACP testing for the entire year (3) provide thirty days notice Notice 2000-3 as well as the final regulations state that a plan using the safe harbor matching contribution method may be amended during the plan year to reduce or eliminate safe harbor matching contributions on future elective and employee contributions during the plan year, and instead use current year ADP and ACP (if applicable) nondiscrimination testing for the plan year (IRS Notice 2000-3, Sec. III, Q&A-6).

Generally your approach has some merit. No, you are required to payout in a reasonable time period, which might be subject to waiting for the IRS FDL. If you don't payout within the 180 days, why not? If there is a good reason, you better tell the PBGC, and also take action to eliminate the obstacles. Taking the loan to pay the last funding charge might make good sense if the owners intended to take a taxable distribution in any event. Here's your scenario: Loan > meets funding requirements > loan defaults because they didn't have the funds in any event > taxable income. Taxable income is charged tax at current rates. But an alternate scenario is: No loan > fails 412 > 10% excise tax > all remaining plan assets are rolled without tax > funding deficit is gone when plan is fully distributed. Now you have choices, based on the best tax scenario for the client. Thanks for all your help.

Roth should be based on Gross wages if that is what the document says - not wages after taxes are taken out. The back up should be your plan document that defines Compensation for each source.

Roth is after tax money - not pre-tax money.

Can you not talk to the HR person about the error? They may be able to correct it for you if you tell them the problem, and work it out internally. See what they say about how they would plan on correcting this. Take the loan policy with you and show them it does not say deferrals should be stopped.

You usually only stop deferrals if you take a hardship - not a loan. Have the plan administrator give you a copy of the loan policy and see if anything is stated in there.

Why are your adding safe harbor to the plan - you dont need it to pass testing for HCE only plan. Do they plan on adding NHCE's?

I guess at theACOPA conference last week Jim Holland said the IRS final regulations "coming soon" will permit plan terminations and lump sum distributions when the AFTAP is low. That is good news.Also - TAG (Technical Answer Group) stated that the plan can allow (or amend to allow) for participant loans. The owners would take the loans to pay the contribution or pay excise taxes. As long as the participant loan requirements are followed. I will have to check with my client to see if this is something they are willing to do. Thanks for all your help.

You are doing what many have wanted to do: Telling off your ignoramus boss. Of course, you will get fired. This is my convoluted way of saying that while your civil disobedience may be applauded by some, you just can't go around making up your own law and yet avoid pension prision. i dont think the intention is to make up their own law. Just trying to see what can be done for the customer legally. Thanks

I dont think they would want to take a loan to pay the contribution - plus loans are not allowed in the plan. They just want to pay out the remainder employees and take the rest and roll it to an IRA. Thanks

No - unfortunatly - they have been wanting to terminate for awhile but couldnt becuase of the AFTAP.

I have a plan the is frozen as of 12/31/05. The AFTAP for them is only at 56%. They have sold part of the business and all the employees are now with the new company. All that is left is the owners under the old company. There are still 2 employees that have not been paid out yet do to the low AFTAP. The owners are struggling to keep the company alive and told me they will not be able to make the contribution for 2008 or 2009. They just want to terminate the plan and pay out the employees left and they take what is left over. There is enough money in the plan for that. What do I do about the contribuiton owed? They will not be able to pay the excess tax if they cant afford the contribution already. There has to be something that can be done to just terminate the plan. They are PBGC covered. The money that goes into the plan right now is just money that would go back to the owners since the plan has been frozen since 2005. It doesnt make sense to have to struggle to make the contribution and then turn around and pay it back out to the owners. They have enough already to pay the 2 remaining balances for the participants that have been gone since 2006. Thanks

Sorry about that - refer to the IRS website link below: http://www.irs.gov/newsroom/article/0,,id=184347,00.html

Here is an attachement. It does not apply to sole-props - they can still use 10/15 for a 12/31 plan year end. Jk, you can't post copyrighted material silly - Blinky

With the new regs out - the retirement age for plans should be 62 or 65. I have a 412(e) plan with retirement age of 60. I need to change it to 62. Can you leave the level premiums of the life insurance alone and just adjust the premiums for the annuity contracts to reflect the change. I have calculated cummulative contributions for the plan total and for each indiviudal against the insurance premiums. The percentage lay between 51% to 61%. Since the insurance premium is below the 66 2/3% does it look like it would be o.k. to keep the same life insurance premiums and just adjust the annuity premiums?

Do you have a QDRO in place signed by the courts? Do you have an attorney? If so - I would take him back to court. He needs to let the retirement places know - and the retirement places shouldn't be paying him out if there is a QDRO in place.

Can you tell me in the rules where it says the "at least 2" part. Thanks

Yes it does. Thanks

If the document says it is based on annual compensation - then yes - you have to true it up. If the document says it is based on per payroll - then no.

Thanks everyone!!!

The rules are out that we need to amend the plans that have a normal retirement age of less than 62. I have quite a few plans with 55, 59, and 60. Seems a shame to have to do that when some are really retiring at that early age - one participant doctor or lawyer plans. Does this apply to DC plans also? It really doesnt specify in the notice. Also - does this include the provisions for early retirement age 55? Does that need to be taken away also? I have attached the article from ASPPA. Thanks (Right at the top of the ASPPA ASAP it says it's copyrighted and for internal use only, so I deleted it from your post.)