Scuba 401

was a form 8905 required to extend deadline when converting from IDP to prototype. the plan had a cycle C (1/31/09) deadline.

there is no chance it will be funded due of course to the insolvency of the corporation. will the IRS even look at this in a VCP?

company is bankrupt. what is the correction for failure to fund safe harbor non elective?

in this case both. What do you do when a substantial asset in an IRA is currently illiquid and difficult to value? i suppose you could give it a zero or close to zero value but what if you are wrong? Under IRS regs it is the responsibility of the IRA owner to have assets not publicly traded periodically appraised by a qualified appraiser to determine the FMV. If the IRA owner does not comply with this requirement then the IRA will be subject to various penalities under the IRC. If the client does not want to retain competent tax counsel to advise them of the rules that govern IRAs with these kinds of assets then the client should not retain such illiquid assets in the IRA. Scuba: what is your relationship to the IRA owner? I think you are in over your head. that is awfully presumptuous of you mbozek. you think I am over my head because i asked a question on this board? you don't know a thing about me or my credentials. plenty of times i am 99% sure of what the answer might be but i ask it anyway just in case someone might have different information. but in any event i appreciate the answer.

in this case both. what do you do when a substantial asset in an IRA is currently illiquid and difficult to value? i suppose you could give it a zero or close to zero value but what if you are wrong?

is there any relief for illiquid assets with a difficult to determine FMV?

small account ($3,500). the participant has no beneficiary or it appears next of kin. the plan says the account needs to be paid to the estate. does anyone know what the procedure is or have any experience with these payouts where there is no estate or next of kin to assist.

thank you. great post. the mailbox rule is interesting in light of all the talk about deposits considered being made when they actually are in the trust. this is somewhat contradictory i think.

recently one of our clients was audited by the DOL and accused of getting its deferrals in to the plan in 12 calendar days. the labor department deemed 7 business days as reasonable. the client is a small employer. i am aware of the recent DOL safe harbor of 7 business days but this was released in 2010. as anyone been successful arguing for a few extra days for periods prior to the safe harbor being released?

the employer told employees all year last year that the plan had a discretionary match. the plan has 1000 hours and last day rule requirement to accrue the match. time has come to fund the match for last year and the company has no money. are they required to fund the match or can they just say we can't do the match. it is discretionary anyway.

who is the client - the plan or the plan sponsor/employer for purposes of service agreements?

What part of the form being in the employee's desk constitutes being filed w/ the plan admin? How do you if the participant hadn't simply changed his mind prior to filing it and failed to destroy that form? Is a deceased participant capable of filing a document w/ the plan admin? This is the exact scenario for why the plan has that language: to prevent competing claims based on unfiled bene forms. Do not go against your plan document just because it's a sad story of who will or will not get benefits. The participant had a duty to properly file that form and you can't perform that duty for him now. If anyone questions it, then you copy that page of the plan text, use a yellow highlighter to mark the "on file" clause and tell them "sorry". You might use this opportunity to review your bene form and instructions and make sure they specify that a designation isn't valid until it's been filed. I think we used the phrase "received and accepted on the proper form" (which probably came from the plan doc). EDIT: divorce and remarriage might be the scenario where I'd second guess what I just wrote. In which case you invoke the spousal waiver requirement and use the plan default which is typically the current spouse. i am in agreement. just wanted to elicit other opinions. i am going to add language to the form as well.

if an employee dies and they find the form in the employees desk is it valid. the plan says it needs to be filed with the plan administrator.

i know you can't forfeit vested accounts due to fraud or theft but what if the employee used a fake social security number?? does that give the employer a way to prevent the employee from getting the money?

can't really find any authority one way or the other but can a corporation rescind a termination if for example a merger or corporate sale doesn't occur? the corporation has both a DB and a DC plan.

i remember hearing once a plan had to be paid out a certain amount of time after termination. does anyone know that time or the place where this was stated?

I recall hearing somewhere that there was a time period in which a plan (DC) had to be paid out after the termination date. does anyone know or have a cite?

excellent. right on point. thanks.

we had a client that had some deferrals transmitted late. we answered the question yes on the 5500 and basically self corrected including even paying the excise tax and filing for 5330. we recently received a letter from the DOL saying that we need to correct using the VFC program. anyone ever have a situation where they corrected but outside the VFC program and will the DOL accept this correction if inform them about it?

i need to revive this thread. asppa issued an asap wherein they suggest that the TPA open an "omnibus" account in which you deposit the withholding amounts and then provide electronic payment to the IRS. We are an RIA also and in my opinion this will trigger the SEC custody rules whereby we would be required to have a surprise audit. anyone in the same situation or handling this in that manner?

employee (non owner) has an IRA and he is over 70 1/2. can he roll his IRA into his 401(k) and avoid RMD's going forward. he is currently employed.

did all the 8905 forms have to be signed by 1/31/2008?

lets say I had an individually designed DB plan and they want to restate to a prototype. Would they be able to do it by the deadline coming up for prototype db plans or would they have had to stick to the 5 year cycle for individually designed plans? They were a cycle B and they did not restate by 1/31/2008.

yes it is basically my same question but i added a little twist. that is to have the individuals adopt the plan. my concern is in the converting of 1099 compensation to plan compensation.

lets say you have individuals who are employees of a company and participants in the company 401(k) plan and also receive 1099 income from a member of the controlled group. what would they have to do to include their 1099 compensation in the plan? i am thinking they would need to adopt the plan as a sole proprietorship and account for any unpaid social security withholding. am i on the right track. plan definition of compensation is total compensation/w-2.