Bill Presson

Can you explain this part in any more detail? What did they do to "set up the plan" at that time?

Or ever...

The best way is to post random questions on unrelated message boards. That always causes lots of people to send you money.

Agreed. Let's see what we can do about this.

Austin, our Dallas office does some of this, but we're phasing out of it. After watching what they were doing for the past 9 months, I realized that unless you are doing a lot of it and it is highly automated, it's very difficult to make money. The biggest issues we faced were the actual movement of the money. We had a "bin" set up at Mid Atlantic Trust. All of the money would be deposited there. With schools and governmental entities, it's very difficult to get agreement to do an ACH, so they would all send checks. When we get the payroll file, we have to process where the investment elections say the money needs to go. It can easily be 5-8 different places. You need to then get the money from your centralized "bin" to the investment providers. There is a cost for each transaction. There is also some amount of time delay (depending on wire/check, etc.) in getting the money actually invested. You also have to determine what kind of "back up" you are going to send to each provider so they know how and for whom to invest the money. So we've decided that we are probably going to reduce our plans like this. Just FYI. Good luck.

We will generally give the employer two options: 1. Fix every return 2. Fix the most recent one by amending and putting the correct number and showing that prior returns were filed under the other number. Most choose 2. It may not be the perfect answer, but we think it helps set things right.

With welfare plans, generally audits are only required if the assets are held in trust.

The deposit was not for me - but for other employees that are involved in 2010. December of 2010 he ammended the plan so the 3% contributions would not be mandatory. Thanks for reading and responding. I appreciate it. Ok. The wording just made it appear that we were just talking about your account. No employer should be allowed to get away with this and the TPA should either get him to fix it or resign.

Question though: Why was he supposed to make a deposit for 2010 if you left in 2009?

The only way I know to do this would be to spin off the PS portion into it's own plan; then terminate that plan.

I just love investment firms that don't want to get involved in doing the tough part of retirement plans. Goobers. Anyway, I would never, ever recommend that plan assets go to an Employer account. One day is a prohibited transaction; forget an extended period of time. Thus, the perfect solution in Penchecks: use them for all those other distributions. Full disclosure: I have NO financial interest in Penchecks, but I am a satisfied client.

Ironic.

We've used Relius 5500 software since it was Hyperprep and have always been satisfied. We chose not to use the Web Client and instead just uploaded everything directly to IFile. That worked extremely well for us and I think it was one of the better decisions I've made. We'll be sticking with the Relius software.

We've had some clients recently involved in DOL audits. Both of the auditors have indicated that the standard for large plans is less than the 7 day safe harbor allowed for small plans. FYI.

We recently have had clients go through an IRS and a DOL examination (different clients). Both reps said to view the amounts in conjunction with the latest date the deposit is allowed (15th day of the month following, etc) and make a reasonable decision. If I was faced with what you have, we would recommend to the employer not to report the amount as a late deposit.

I have the same recollection, but can't find it anywhere.

We've had one for years, but we are having it reviewed just to see if it needs an update.

When would you ever be able to restate it?

Authority, probably. But at the Benefits Conference of the South a few weeks ago both Andy Zuckerman and Monika Templeman claimed that they just want to see evidence that the documents/amendments were adopted timely even if they weren't properly signed. I would ask the IRS auditor to get technical advice and if you still don't get a good answer, then contact either Andy or Monika.

This would seem to be legally problematic to me.

That's because it is. If the plan has a last day employment requirement, then you can't allocate (eg deposit) a profit sharing contribution until it's earned.

In the first year that an employee is eligible for the SEP (say, turns 18 mid-year, but has been employed since the start of the year), MUST the plan count all of that calendar year's compensation when determining the employer contribution on behalf of that employee? CAN the employer only contribute based on the date of eligibility going forward for that first year? Thanks. I've never seen an SEP that allowed for mid year entry; I'm not sure that the regs even allow it.

I don't know the specific answer. But, let's assume that you can do it. What are you going to do with the money in the meantime? Hold it in a plan bank account? Which will mean you will end up with a 2012 5500 filing on top of the 2011 filing?

I think they are even better in that situation becaust you don't have to maintain a bank account. We started using them last fall when the 8109 deposits changed. Been very happy.

I don't have access to my files, but I'm pretty sure the Katrina amendments would apply to this as well.