emmetttrudy

Does the fact that the MPPP was merged into a 401(k) Plan change anything? Would the in-service withdrawal still be allowed if the plan defined NRA to be age 60? And would there need to be any spousal consent?

DB Plan terminated in late 2008. Assets distributed early in 2009, so final filing would normally be due August 31, 2009. Can I use the 2008 Forms to file the final 5500? Or must I wait for the EFAST2 system to come out? I should mention also this is a one-man plan, EZ filer.

I read that as well but I'm thinking there has to be another exception to that for initial Plan Years. ..

New DB Plan as of 1/1/2008. Participant count is 114. So with my understanding of the 80/120 rule they do NOT need an audit and can file a Sch. I instead of a Sch. H. However, they do have a 401(k) Plan which is subject to an audit (over 120 participants). Is there a rule that says if one employer's Plan is subject to audit then all of the Employer's plans are subject to audit as well? And if so, can you reference a code section? Thanks!

An employer has two plans, a 401(k) and DB Plan. The owner pays his two children approx. $5,000 per year however, they have never met the eligibility requirements for either Plan because they never work even close to 1,000 hours. There is one other employee who works about 700 hours per year and is paid approximately $16k. The owner is the only participant in the 401(k) and DB Plans. Is this ok? Is there a nondiscrim or coverage problem that should be considered? Or because the other employees never meet the eligibility requirements then it is ok for the owner to be the only participant in either Plan? Thanks for any help.

This employer has a 401(k) Plan and a Defined Benefit Plan. He pays his two children about $5,000 each year and they work minimal hours (definitely less than $1,000). There is one other employee who makes approximately $16,000 per year but never works 1,000 hours. He is the only participant in the DB and 401(k) Plans. Is this ok? Is there a nondiscrimination problem I should be worrying about because of this other employee? Or as long as she never works 1,000 hours or more is it ok?

Can the Plan Sponsor pay distribution fees from the Plan? For example, if the lump sum is $500, can there be two checks written from the Plan - one for $500 to participant and one for a $100 processing fee for the distribution? Or do the fees have to be paid outside of the Plan?

For the statutory change in method required by PPA - are you checking Yes on this question? If so, does anyone know of a sample attachment I could look at? Seems silly to have to check Yes on this and submit an attachment when they know everyone had to change the funding method!

The DB Plan Document says if the employee is a participant in both Plans the DC Plan is to provide the 5% top heavy minimum. If the employee is just a participant in the DC Plan, the DC Plan is to provide a 3% top heavy benefit. However, depending on the owners' contributions, they'll need to get the 5% gateway anyway. Are there any combined deduction limits I will need to worry about?

For 2008 the PS/401(k) Plan does not meet a SH design, there are just discretionary PS employer contributions. It was changed to 3%SH as of 1/1/2009. So, I have to calculate the TH minimum based on what the 401(k) Plan document says? The DB Plan's TH benefit is separate based on that Plan Document?

I should add as well that the DB Plan passes the 410(b) coverage test and 401(a)(4) test by itself. So I don't think it needs to be aggregated with the 401(k) Plan for nondiscrimination testing. SO my biggest concern is how to calculate the top heavy minimums?

I have a client who has two plans - a DB Plan and a 401(k) Profit Sharing Plan. Two owners and about 5 or 6 employees. The owners participate in both Plans. How do the permissive aggregation rules work? Do the two Plans need to be tested together for 401(a)(4)? What about top heavy? The Plans are top heavy (tested together or separate), no matter which way you slice it. I always thought if the keys participate in both they need to be tested for top heavy together. If this is the case, is the top heavy minimum then 5% of annual compensation in the DC Plan?

On the Schedule of Benefits section of the Datair report there is a Monthly Benefit column and there is an Accrued Benefit column. What is the difference between the two? Is the Monthly Benefit the benefit if the participant works until NRD? And the accrued benefit is the benefit accrued to date?

One man Plan. Terminated March 2008. Assets were distributed March 2009. Will file a 5500-EZ and prepare Schedule SB for 2008, and a 5500-EZ for 2009. Does a Schedule SB need to be prepared for 2009?

Is 1099 compensation includable for retirement plan purposes? Plan Doc defines comp as W-2. what if employee was independent contractor and then hired full time midway through the year? do you only take into account his full time W-2 compensation?

CB Plan effective 1/1/2006. It was set up with a 6-year graded vesting schedule. Under PPA I was under the assumption all Plans had to move to a 3-year cliff vesting schedule. Is this correct? Can this Plan continue to use the 6-year graded schedule?

Need to allow someone to enter the Plan early and give them a contribution to pass testing. Is this allowed? And if so, how would the corrective amendment need to be worded to allow the early entry?

We were ready to set up a one-man DB Plan (owner and spouse) but he mentioned that he has another employee. She works for him however, is paid by a different company. The client reimburses the other company for a portion of her salary. Seems like she would be defined as a "leased employee". Assuming this is the case, can she or can't she be excluded from the new DB Plan for this client?

The participant isn't a fiduciary or owner. Based on my interpretation of the definition of "disqualified person" on the IRS website this person does not fit into any category, and thus my conclusion that it isn't a PT. But it sure smells like one, which is why I question if I'm interpreting the definition wrong.

The Plan allows an in-service withdrawal to Participant A for $50,000. Participant A is only 40 years old and the Plan only allows in-service withdrawals at age 59 1/2. First question - is this a prohibited transaction? Second question - assuming it is, Form 5330 must be completed and filed, correct?

The pLan owned a life insurance policy on one of its participants. We always included the cash surrender value in the top heavy test determination each year. However, this participant died in 2008. For the 12/31/2008 top heavy test, is the full life insurance payout (approx. $1.3 million) included as a current year distribution for top heavy testing purposes?

1/1/2008 valuation. Minimum required contribution = $0. Maximum deductible contribution = $500,000. Also has a 401(k) Profit Sharing Plan. What can he contribute to the 401(k) Plan in addiiton to deferrals? Is it whatever DB contribution he decides on + deferrals + 6% of comp in profit sharing?

This particular Plan was frozen effective 1/1/2008. The amendment to do so was adopted in May 2008 before anyone hit 1,000 hours. They would like to unfreeze the Plan effective 1/1/2008. With 412(d) they can still do this by 3/15/2009, correct? I just wanted to make sure before we went ahead and unforze the PLan for 2008. The effective date of the unfreeze would be 1/1/2008 and adoption date of the amendment would be today. THis is just a 1 person plan so no worries baout notice requirements.

I was just looking at the PPA mortality tables IRS Notice 2008-85 2013 table Unisex 417(e). From Age 115-119 it is 40%...Does this mean that a person who lives to age 114 has a 60% chance of living to 115? Or does it mean a person has a 60% chance of living to age 115 period (which obviously doesnt make much sense at all).

I'm confused on how assets are valued in a PPA valuation. Is there an assumed rate of return on assets? Or is the only thing that matters the true market value at valuation date? Also, at what interest rate are 2008 contributions made in 2009 discounted back to 1/1/2009? Are the segment rates used for this?