jkdoll2

Our underline document says they exclude all non-resident aliens and resident aliens . They are here in the US illegally and should not get W-2 income. Thanks

Yes - the plan excludes illegal aliens. Thanks

Just found out a participant in a plan for the last 5 years is illegal. She has taken a loan out. The plan does not allow for illiegal aliens. What do you do with the deferrals and match that has been deposited for her? Do they have to make her whole outside of the plan and forfeit the money? Do you treat it like an ineligible participant? What if her social security number is fake? If you give her money outside fo the plan - how does it get reported to the IRS - with her fake SS #? She will probably be fired - and I dont think they will want to give her more money outside of the plan. Thanks

I believe once the QDRO was complete - your spouse should have presented it to the plan administrator and your portion should have been moved to a different account ( not his) in your name - and you become a participant in the plan. You should have been able to go in and change your investments at that time. He should have never been able to keep your money in his name once it was finalized. I dont know if that was his error or the plan administrators error. But there is definetly a step missing there, something should have been done once the QDRO was finalized.

Company got bought out - there is no income in 2008 for owner and employee (2 person plan). They want to terminate the plan. They do not want to make premiums in 2008 - just cash in the insurance and annuity products. Is the contribution required on a 412(e) plan? Can they just take what they got accrued in the insurance policies? Since they did not have any income - they would not be able to deduct the premiums. Thanks

Doctor owns 100% company - wife works there and gets W-2. Company gets taxed as a sole prop The doctors gross comp gets reduced by 50% FICA and contribution. Does the wifes comp get reduced also becuase of attribution? Even though she is not the owner - he is? Thanks

Can you tell me if you put this language in a document - do you need to make the document an individual drafted document - or is there something in the prototype document that accounts for this. We use corbel. The plan sponsor wants this language. Definition of Employee: An individual qualifies as an Employee only if the Employer treats the individual as its employee for payroll purposes by reporting his or her compensation on a Form W-2 reflecting Employer's Employer Identification Number. Individuals not so treated by Employer are to be excluded from Plan participation even if a court or administrative agency determines that such individuals are common law employees and not independent contractors. Notwithstanding anything to the contrary in this paragraph, also excluded from the term Employee and from Plan participation is any individual (i) who enters into an agreement with Employer to perform services as a sales consultant and/or to solicit sales of sales-consulting services on behalf of sales consultants, or (ii) who is subject to an agreement with Employer that the individual has signed, which provides that the individual has no right to participate in any benefit plans or programs that Employer maintains for its employees.

That would save him money and trouble. Of course, his purpose for the separate plan may be to grant himself a larger benefit than he gives the employees of the S corporation. Then, because they are a controlled group, he has to test them together anyway and will likely fail. If he puts in the maximum 401(k) deferrals - he would have to have some kind of safe harbor to pass ADP testing - since you have to test them together.

As long as they pass testing together - you should have no problem. They would not pass coverage testing alone.

The net cash surrender amount goes back into the plan - from outside funds The owner will get full value of the policy But he will be taxed on the difference between the PERC amount and the cash surrender amount, no penalties PERC stands for a valaution formula that takes into account the premiums paid. Earnings from the cash and the contract and reasonable charges for mortality and policy expenses. You will need to get this amount from the insurance company as well as the net cash surrender amount .

Yes - you can put $43,700.00 into the DB plan. He can since this stays within the 25% limit and is under the maximum allowed contribution for the DB plan.

Whole life insurance is a specified benefit. The guarantee part is not included on the 5500. Whole life insurance is a guaranteed benefit. The actuary does not include the cash value in the asset balance when determining the contribution for that plan year. Maybe we both just interrupt it differently.

Is that in the instructions somewhere? What's the rationale for it? On a whole life insurance policy - the policy payments are fully guaranteed by the insurance company - so they are not included on the 5500. I attached the same question we had asked our Technical Answer Group (TAG). Also - it is in DOL regulation section 2520.104-44(b)(2). I hope this helps. TAG___insurance_on_5500.pdf

It depends on what type of life insurance it is. If it is Variable or Universal life insurance - then it is included in the plan assets. If it is whole life insurance then it is not.

I have a plan that does an annual safe harbor match. They always file an extension for the plan. If they dont fund the safe harbor match by 9/15/08 (they are an S-Corp) what are the remifications? Is there any sort of penalty since it is a required contribution? Does the plan have to be tested. They will probably make the contribution in October. What about their corporate taxes - they did use it for a deduction. Thanks

How many people still do EOY valuations for DB plans? What are you doing for the 2008 plan year on EOY vals? What about the AFTAP's that have to be done by 4/1/09? It is a real headache to switch them to BOY. Is that something you see we will be having to do? All of our plans are under 100 participants. Just wanted other peoples comments on this. I hear so much about BOY valuations - and I dont know how other TPA's or firms are handling EOY valuations. Thanks

We have about 6 plans that are end of year and PBGC covered. Our actuary says we need to wait until technical corrections are done before we can file the premiums for 2008. all of our plans are under 100 participants and some or cash balance plans. W do need to know what to do with end of year valuations and premiums due in April. I sometimes dont even get census until mid summer.

Cash Balance Plan is frozen 1/1/07 and terminated 12/31/07. They did not fully fund the 2006 contribution - and are paying the excess tax on the contribution. They also owe a little contribution in 2007 - which isnt funded yet. They want to pay out employees. Can they pay out the employees owed - by reducing the owners payouts? I didnt know if you could do that for a cash balance plan? There isnt anything in the Corbel document that allows for that. They are not PBGC covered. Thanks

You can rollover an contributory IRA to a 401(k) Plan - but can you rollover a rollover IRA from a qualified plan to another qualified plan? Thanks

Here is a spread sheet I use for integrated plans. This may help. I ran it on our software system and it worked out fine. 2008_calculation_for_integrated.xls

I've never had to do a 5500 for a Money Purchase government plan I have. Have any of the rules changed? Do I need to start doing one? Thanks