TPAMan

As often as not when I hear brokers (even attorneys and accountants) refer to 'new' plans and 'mergers', they are actually talking about how the trust funds are being handled rather than the plan document. Ultimately, both strategies work - changing plan sponsor of existing plan or new plan with old plan merger.

Your plan document should be pretty specific about how to allocate earnings versus contributions/forfeitures. You indicated that the "extra funds" were earnings on deposited contributions. So....allocate as earnings. I don't see a "forfeiture" option from the info you provided. Hard part is typically determining your allocation group from 2002 and associated account basis as a starting point. ESOPguy gave some good tips on how to proceed from there. Comes down figuring out your costs, benefits and risks. Good luck.

No 10% early withdrawal penalty on return of ineligible deferral.

While I have seen a number of options bandied about regarding the coding of the 1099R, the 2011 1099R instructions appear to have settled on coding the transaction a "G" and including the distribution amount in the taxable box as well. Prior to Roths, the taxable amount for rollovers was always $0.00. Well...except for situations involving basis or after-tax contributions, but then, that's not your question.

I would go ahead and file an amended return with both pages of the 5500 attached. Seems like it would be fairly easy to proactively make the filing. FWIW, I have no idea what the benefit of the 2nd page is, but then, who asked me? I think the DOL has pretty lenient the first year around and expect them to get a bit more persnickity this year.

Emancipation is not going to save you. Better file on or before the 15th.

If you withhold and fail to deposit, that is a big deal! If you fail to withhold, a problem doesn't typcially surface until the taxpayer fails to pay the taxes owed on the distribution. Could happen I suppose, but pretty unlikely. Biggest threat is probably a tongue lashing from the IRS/DOL if they ever did an operational audit of the plan.

My first option is always to report what actually happened. For 2010, report the depost of $16,650 and then in 2011 you will report the corrective distribution of $150. [yea - like Tom says]

If your HCE is also a KE you might want to run a Top Heavy calculation. Depending on the demographics of the plan, a 5% HCE contribution could become quite costly.

You got it - $15k! Contribution amount typically represents the 'new' money and/or deposits to the trust, rather than the allocated amount to the participants.

This is a valuation issue not a delinquent filing issue. You may have a number of other compliance concerns depending on the how the insurance policy value was attributed to plan participants, but a delinquent filing issue doesn't appear to be one of them.

I wouldn't spend a lot of time trying to find some 'commonality'. The commonality is that this happens regularly for small plans that don't have distributions requiring withholding every year. Even though there is no requirement to file a 'zero' withholding 945, the IRS similingly 'expects' one. When these annoying letters come through, just respond as they have suggested - 'no activity' for this year.

Our loan policies generally require payment via payroll deduction only and fortunately, we have not have any participants paid soley in publically traded company stock. Therefore, the question has never came up and if it did, I would just say "no!". Basically, we find the dollar to be the most efficient manner for transacting business including participant loans payments. Tracking, timing and valuing 'in-kind' loans payments would clearly increase processing costs and, most certainly, violate the level amortization requirements of 72(p) unless you are talking about frational shares. Good luck with that.

To answer your first question, there is no requirement to change auditors on a periodic or any other basis. Your second question leads to the many changes that have occured in the past several years shifiting the audit role, in some respects, from service to compliance. I believe SAS 112 says that the reponsibility for preparing trust financials belongs to the plan administrator and though auditors have done it for years, they would now be required to advise of a material weakness in the administrators procedures if they continued to do so. In other words, the plan adminstrator should not be relying on the auditor to tell them how the plan is doing. If you think about it, it makes sense.

I have been having this problem when I print the final fee disclosure regs - they all come out in gibberish!

I have a hard time with the idea of 'true-ups' as being expensive. They represent the real cost of the match when the element of contribution timing is eliminated. A 'true-up' match is no more or less expensive than an annually allocated match.

I agree, counting folks is a pretty easy except for when it isn't. A few instances come to mind - seasonal type employees, plan status changes (eg, non-union to union), unpaid furloughs, or military leave (or any other approved leaves). These kinds of things can easily muddle a count particularly when an event crosses a plan year end. Then there was the client that wanted us to tell them how to determine if an employee was terminated..... It's all easy. That's why we get paid the big bucks!

When we terminate a plan, we specify the date when contributions stop as well as the date when loan payments stop.

As we see it, the resolution provides the intention and authority for the plan to be amended. Since the plan is a written document, until it is amended, nothing changes. So if a plan sponsor resolves to reduce a MPP contribution to 0%, but no amendment to the plan is ever made, I would be inclined to act on the plan document as written. Generally, we have the resolution provide the nature and effective date of a change; the amendment provides the new/replacement language for the plan document specifying the Section, etc being changed.

I am thinking this 1st year of EFAST2 filing, either action should be OK. With the many issues with signing, filing, attaching, etc, I doubt that EBSA will be able to fault any good faith filing. As long as the filing was accepted, I would hold out for a 'correction' letter before doing anything else.

The documents we use require a six month suspension of salary deferrals when a safe harbor hardship distribution is made, hence we restart salary deferrals after six months. I guess I don't understand why it would be different for an ACA, QACA, or EACA?

I believe that you can use the 2F code for the plan, but you would also need to include code 2H indicating that only a portion of the plan allows for participant direction.

What plan?

In the DOL Instructions for Form 5500-SF, Item 3 of Who May File lists participant loans as an example of eligble assets. That's all I needed to know to file a ton of SFs for 401(k) plans with loans.

Seems to me the requirement for eligible assets to have a 'readily determinable fair market value' is pretty specific. I don't think your LI policy or the LP typically will meet this standard.