Bill Presson

The loan policy says there is a $175 fee. Also, can you just have the participant write you a check and not deduct it from his account?

S Corp dividends are not earned income.

This is why you need to have a close relationship with an attorney, even possibly on retainer. There is no way you should make this decision without competent counsel.

We'll have to agree to disagree on the 7/1/12 date, but I'm willing to bet that most disclosures were distributed closer to 7/1 than 5/31. And I agree that I misspoke on "plan". I noted above that I meant to type contract.

Remember that 408(b)(2) isn't an annual mailing. Unless something changes for a client (and we know it will), no further disclosures are required. Now we might change our business model to do this annually, but I don't think the requirement is there.

That's why we prefer to answer things online. You can't see our confused looks!

I remember back in the "olden" days in the '80's when I actually typed the 5500's (and the IRS actually read them) we would put footnotes for various items. But in this cold, cruel world, I don't think they would matter anymore.

Assuming 10/15 is the extended deadline, the form has to be uploaded and accepted by efast2 by that date.

Don't get me wrong....not saying I like it at all. And the expanded Safe Harbor Notice is enough of a pain each year.

So if I join the plan on July 1, but choose not to defer at that time, I don't have the right to the information so I can make a choice to defer later? Like October 1?

Yes, it can be done. We've done it in a couple of cases, though it's rare. As you mentioned, both plans need to have language allowing it.

How much per hour is his time worth?

No. Just amend the document to allow prior service. Be sure the amendment uses language specifically for eligibility, vesting, etc. We have this done for plan all the time.

Do an -11g and then amend the plan to put every participant in their own group. Then you never have to do an -11g amendment again.

Clearing up a couple of items: a. I'm assuming the policy is part of Jill's account and not just an investment of the plan. Since she is paying tax on PS 58 costs, this would appear to be the case. If it was just a "key man" life insurance policy, she would not be paying taxes on the cost of insurance. Q1: The income tax free net death benefit flows through to the beneficiary. If Jack is the beneficiary, then he gets her entire account (death benefit plus regular account accumulations). It has nothing to do with Jack being the only other participant. See above. And his account would, I assume, remain in the plan unless he has a distributable event. Q2: I believe (but I'm not sure) that the income tax free benefit is lost if he converts to installments. Hopefully someone else knows this. In 25+ years, I've never had someone take installments when an insurance benefit is involved, the beneficiary has always taken the benefit in the current year. Q3: No idea. Sorry I couldn't answer everything, but hope this helps some.

I agree that it doesn't make sense. However, there were a whole lot of well respected ERISA attys in attendance and it wasn't really challeged; Ilene Ferenczy, Robert Richter, Steve Forbes, Sheldon Smith, etc. Next time we can video conference in Larry Starr and let him challenge.

We would not issue a revised 1099. He had the money and just chose to do nothing with it. Also, we would charge additional fees for reissuing the check.

Correct. I actually meant to type life of the contract, rather than life of the plan. Thanks.

What 5/31/12 disclosure? The earliest date the notice is required is 7/1/12. If you receive revenue sharing, then you are a covered service provider and are receiving payment from the plan. Also, the $1,000 limit is total fees for the life of the plan, not annually. Correct, 7/1 not 5/31 I was looking at the old 404(a)(5) disclosure date to participants. Still, what is the reporting period? Is it the prior plan year? Jan-June 30? The life of the plan, which number will accumulate in subsequent plan years? Some of these micro plans I have not received in excess of $1000 in RS. I suspect the safest route would be to report all income. 408(b)(2) is prospective and tells the employer what you expect to happen, not what did happen.

Well, just last week, during the IRS Q & A at ASPPA BCOS in Atlanta, they said specifically no amendments other than Roth & Hardship. Anything else would be challenged by them on audit.

What 5/31/12 disclosure? The earliest date the notice is required is 7/1/12. If you receive revenue sharing, then you are a covered service provider and are receiving payment from the plan. Also, the $1,000 limit is total fees for the life of the plan, not annually.

You need to really detail what you have. A cafeteria plan will have a document that sets out what benefits are offered. Just because some benefits (that are part of the plan) change their renewal date, doesn't mean that you suddenly have multiple cafeteria plans. It just means that the renewal date changed. While it can complicate the enrollment process, it can be done. So don't jump to conclusions on what the effects are. Just document what happened. Then talk to the people that drafted your current cafeteria document and have them walk you thorugh this.

One of the most common issues relates to late deferral deposits. A client makes every deposit timely, except for one which is one day late. The calculated late deposit earnings is $.75. Do you deposit the $.75 and check the box on the 5500 or not?

Does that mean you'll stop posting questions?

Congratulations Dave!