Bill Presson

Yes, each part of the plan has to meet the MV amount.

I'm assuming the new owner bought assets and not stock. The answer is yes, the new owner can adopt the existing plan as the new sponsor.

Additional issues include getting an actual appraisal and getting a full bond on the amount or needing an audit.

It might not be an issue if the participant chose to be in an illiquid asset. But it's likely a fiduciary issue if the participant wants the entire distribution. I think the trustee is on shaky ground.

I think that is the correct date.

I would be shocked if this were the case.

I've never been able to successfully use screen names so I'll just have to take my chances.

Sorry. My humor was way too veiled. Trying to tie in the targeting issue going on with the EO side.

Unless the plan document is written poorly (so please check to make sure what it says), the compensation limit is a testing limit. So, with the previous caveat, a participant can defer and receive appropriate matches at any time of the year.

Now might be a good time to stand up to them and tell them to stop targeting these kind of plans.

If the model itself is a DIA (which I believe to be the case), then I'm pretty sure you would not have to provide a notice to change funds in the model lineup 30 days before the change. You might still want to provide information on the change and why, but I don't think there is a time frame. I would liken it to the purchase sale of investments inside a mutual fund.

ppapdx, Thanks for the info. What a great example of a stupid answer from the IRS. Wish we had this conversation prior to the BCOS earlier this month because I would have liked to see Monika Templeman defend this position.

We actually have the same issue with our own plan and I'm betting almost every company of any size does whether they realize it or not. When we have drawings at firm meetings or award gift cards etc., those amounts are required to be put on the employee's W-2. But there is no way for there to be any withholding. So our attorney has said while it is taxable compensation and it is eligible for employer contribution allocation, there is no requirement for a deferral because there was no possibility of deferral. It is similar to imputed income from life insurance in excess of $50,000, etc. We've had the plan audited by the IRS a few years ago and they concurred.

I'm a bit confused. If service prior to meeting eligibility didn't count towards eligibility, how would one ever become eligible?

Awful lot of work for a $7,000 contribution. Any way you can convince them to not do it?

You can request it from the participant (and should) but you likely will not get it.

We get copies of all statements as well. We review every single transaction related to cash flow in or out of the accounts. We don't exactly calculate the unrealized gain/loss like we used to because the forms (for small plans) don't require it anymore. We don't have any balance forward clients that are audited. We have also had brokers ignore the rules and pay out a participant without us knowing and we've had to file 1099's during the summer for distributions the prior year. But I don't have a lot of sympathy with the TPA not catching it during the trust accounting. Now if the client was supposed to complete the trust accounting and provide that to you, then it's not your problem to begin with. It's the client's. Just keep that in mind and recommend the appropriate corrective action with the appropriate corrective fees.

You keep saying "takes a distribution" and "keeps the funds in the plan" These, in my mind, are not compatible with each other.

I think you have it pretty well laid out.

We use Relius for admin and Ft. William for documents and 5500s.

If the employer wants to "correct" it, that's great. But while I see a small technical issue here, I don't really see how the participant is harmed. Especially if they took 2 years to raise the issue.

Agree with QDROphile. We've had this happen several times over the years with our own company as we've merged with other accounting firms.

Yes, unless it's purchased out of the plan first.

No, I think the read receipt is perfectly fine and I'm not even worried enough to use the read receipt for a firm that provides everyone with a computer.

Meaning that, if the compensation starts or ends up below $255,000, the entire calculation is circular. If the DB amount changes, then the comp changes which changes the DC amount which changes the comp amount, etc, etc.