ConnieStorer

Just a heads up. Within the last two hours I received emails from two different TPA firms with a link to a Share file document. I do not deal with either of the TPA firms so not sure of the source of the emails: Bush Retirement Plan Services and BDS Consulting Group Has anyone else received odd emails.

I am not sure of the cost but I have one client that uses Travelers to cover all the Non qualifying assets.

Thanks for the confirmation. I just wanted to be sure I was not overlooking something.

I have a Cash Balance Plan that provides a substantial benefit for most of the NHCE's. The Average DB Allocation Rate for the NHCE's is 3.5%. At least one of my HCE's has an Allocation Rate in the Profit Sharing Plan of 15%. The Average Benefit Test and Rate Group Tests pass with no problem when I provide a Profit Sharing Allocation of 4.5% to the NHCE's. Is the minimum gateway for the Profit Sharing Plan still 5% based on my one HCE at 15% in the PSP. I understand that the DB/DC gateway minimum increases from 5% to 7.50% but can my DB offset drop what would have been a 5% Profit Sharing Gateway to a 4.5%. Sorry if this question has already been answered. Thanks for your help.

Thank you all for your responses. We will definitely recommend getting legal counsel involved.

Hoping someone out there has also experienced a DB plan termination (covered by PBGC) where the investment firm has refused to cut checks to participants who are on the US Treasury's OFAC (Office of Foreign Access Control) list, presumably due to drugs or terrorists involvement. In our client's case there are two participants, total lump sum = $110K. The participants are working with an attorney who has signed distribution election forms on their behalf. One or both of these individuals are no longer in this country. They both have elected a lump sum payment. Not sure that the PBGC missing participant program is a viable option since they are not missing. In addition, the client is not happy that the cost under the missing participant program = $135K rather than the 110K lump sum amounts. Does anyone have a suggestion. The client wants to close out the plan as soon as possible but does not want to end up with a legal nightmare.

Thanks for the information!

I thought that if the Parent owned more than 50% of the stock then their shares were attributed to an adult child.

Does anyone have the name of a Company that could help facilitate the merger of an overfunded sole proprietor plan with an unrelated company that has an underfunded plan? Thanks for any suggestions. We cannot increase benefits for this sole prop and he has no employees that can be added to the Plan. He really wants to avoid the huge tax liability with a reversion.

Thanks for all the responses. We did set up the remote desktop suggested by Gadgetfreak but ran into issues with Relius not working properly.

Please excuse the typos.... should have proofed prior to posting

This is somewhat of a comment and question. Like most of you out there in the pension community our firm has had to change our way of operating due to CO-VID 19. We are a TPA Firm of 7 individuals. Currently 5 individuals are trying to work remotely. Our IT person set us up so that we can log in at home and access our work computer and our network. We use the in house FIS/Relius system for our pension and document software. Trying to get run Relius remotely was not working and we reached out to Relius about the issue. They indicated that we would need to purchase a 12 month WAN license in order to run the pension system remotely. I explained that working remotely was a temporary situation and that we only needed access for one or two months. The Relius salesman reached back out to me and said that they could offer a 10% discount on their full 12 month license. This would drop the annual fee from $3,000 to $2,700. He also added that they could apply the $2,700 fee to the cost of the ASP service if we signed a new contract by May 31st. Maybe other individuals out there feel that this is reasonable but to me this is a horrible response on the part of FIS/Relius. We have been a client of theirs from the point that they bought our FDP. I am seriously considering looking into other software systems once life returns to normal. Does anyone have suggestions for a work around for the WAN license. We cannot justify spending $2,700 for a one to two month fix. Thanks for any comments or suggestions.

Like you we mailed all ours in one envelope. The postmark date on the envelope was July 28th and we show a delivery date of August 2nd.

We are now up to four denial letters!

We have received the same "your 5500 is late" letters that we respond to with a copy of the extension. The extension denied letters that we received this week were totally new to me. We sent the extensions by certified mail so we do have proof that they were mailed timely.

We mailed all our calendar year extensions in the same envelope the last week of July.

Has anyone else had their Form 5500 extensions denied? We have had two clients contact us this week regarding the extension letters they just received from the IRS that said their extension was denied. One client that had two plans had one plan extension approved and the other plan extension denied. I have never seen this happen before.

Thanks all for the response. The Plan has always operated in accordance with standard regulations. Current Plan Documents, Annual Valuation Reports for the Defined Benefit Plan, Contributions made in accordance with deduction limits and annual Form 5500-EZ filings. The debtor wants to exclude the assets in his defined benefit and 401k Plan. The bankruptcy trustee seems to think these should be included since this Plan is not covered by ERISA.

Facts: Single member LLC with no employees other than the single member. Properly formed pension plan, and properly formed 401k/profit sharing plan. IRS opinion letters issued with respect to both. Plan contributions made timely and in allowable amounts. The Single member LLC has filed for bankruptcy Issue: The trustee in the bankruptcy case has said that (i) under the US Supreme Court decision of Raymond B. Yates, MD, PC Profit Sharing Plan v. Hendon, a single member LLC having no employees other than the member cannot have a plan that is ERISA qualified, and (ii) if the plan is not ERISA qualified, then the plan cannot be tax-exempt under IRC sections 401 and 501 (and as a result cannot be claimed as exempt in bankruptcy). Question: I agree that a qualified plan that does not cover any employees (just the owner) is not subject to ERISA. However I think the logic is flawed that if they are not covered by ERISA then they cannot be tax-exempt under IRC 401. Does anyone have an opinion on this?

After reading some posts on the message board I realize why the PBGC method of calculating the payment is based on the monthly annuity rather than the hypothetical account balance. Any insurance company would do the same based on a deferred annuity with lump sum options.

I terminated a Cash Balance Plan in 2018. We were unable to locate two participants so their account balances were sent to the PBGC under the missing participants program. The PBGC audited this termination and sent me and email stating that the payments made for the two missing participants was not calculated correctly. Both individuals had benefit values in excess of $5,000. I was told I needed to use their standard calculation method applicable to traditional defined benefit plans. Is this correct? If the lump sum value was less than $5,000 would the account balance be the correct amount to send to the PBGC. Thanks,

Thank you for the information. That is exactly what I was searching for!

I need a little help from anyone who has some reference material from way back. What year did the eligibility requirements drop from age 25 to 21. In a plan termination audit by the PBGC I was asked to provide an explanation as to why someone did not enter the defined benefit plan until 4 years after their initial employment date. I do not have census information for the early 1980's so I can only speculate that it had something to do with the change in eligibility requirements. This individual was only 20 when he was hired. I do not have a copy of the original plan document.

Thank you very much for your responses.

This is a general question regarding the assumptions used to value a QDRO for a defined benefit monthly accrual. Is it appropriate to use the current year Applicable Table with the current 417(e) rates for both a public and a private pension plan payment. Or, is there some other industry standard that is used. Does it make a difference if the plan does not allow a single lump sum payment to the alternate payee?