Cathy from Chicago

Two plans merging 6/30 due to company sale. How are 7 keys determined with combined plans. What takes precidence, compensation or attribution as far as eliminating a key person? Thanks.

7 a and 7c are the same number and are "net" of the $6000 forfeiture. The problem is in the details listed in questions 8...employee contributions are the salary deferrals and are actual number...had the employer made a match the employer contribution would be a 'net' number (deducting the match forfeiture) but since no match was made yet there were $6000 of forfeitures sent to employer to reduce this plan year's match, question 8i doesn't tie in with 7c minus 7a as 'over' $6000. could the $6000 be considered a liability in 7b? If so, everything would balance. It also balances if I put the $6000 as an 'other' expense in 8g but it's really not an expense. I appreciate your time - new experience for me. thanks.

Non-calendar year plan - Match forfeitures sent to Trustee who uses to reduce future Match contributions. This last plan year employer suspended Match but it is now once again active. Roughly $6000 of Match forfeitures were sent to Trustee during last plan year and are now available for current Plan Year use. How and/or where is the $6000 of forfeitures shown on the 5500SF so it balances? List as an "other" expense? Any suggestions? Thanks

Thanks much for your quick reply...appreciate it.

Plan is Top Heavy in 2011 due to a participant being a Key in 2010; this participant is not a Key in 2011 - can he defer in 2011 as a non-key or will be still be considered a Key in 2011? Thanks.

Thanks, Bill, for your quick response. Appreciate it. Cathy Cathy, the deferral limit is a calendar year limit, so the employee is allowed to continue her deferrals. Just make sure the employer's payroll has the limit set in their system on a calendar year basis.

9/1/10 employee eligible to join 401(k) Plan Year 9/1 - 8/31 Defers $16,500 by 12/31/10 Can she continue her salary deferrals 1/1/11 for 2011 W-2 Tax Year or does Plan Year prevent additional deferrals until 9/1/11? Never been asked this before so I appreciate help from anyone who knows answer. Thank you.

No there is not

A plan is active and uses a group annuity as 401(k) investment vehicle. Years ago the plan had invidual annuities as the investment vehicle and no contributions have been made to those annuities in probably ten years. Due to surrender charges on them, the participants had option to transfer 10% annually to their group annuity account as such was not subject to the surrender charge. Question: in my opinion, the participant may not roll over his individual annuity to an IRA if he is actively employed as the individual annuity is part of the Plan assets - his broker, however, told him he can. Answer?

Plan paid out all but 3 participants in '08, the year the company decided to terminate the plan. 2 of the remiaing 3 were paid out in 2009 and the last on 1/5/10. Company closed and there are no remaining employees. A Summary Annual Report doesn't haven't to be prepared for either '09 or '10, correct? I could see preparing an SAR if the Company was alive and well and simply closed the plan but this is a complete close. Thanks.

I'm with you on this question - other than commissions paid by brokerage firms and manual calculations for R shares for American Funds (which include broker comp) and TPA quarterly revenue sharing payments, our group annuity providers will not give specific expense information - I honestly don't think any one has a clue how to answer 8f. I called EFAST2 for assistance - they didn't know but left a message for the accounting dept of DOL to call me - they never returned the call. Asked customer rep at John Hancock if contract admin charge shown on Employer's annual Balance Sheet was the number to use - he referred me to the IRS as said he wasn't sure so was referring all questions on 8f to the IRS. Asked Securian (MN Life) using one plan as an example - was told approx. $170 - seemed too low so asked another rep who gave me an expense breakdown for same plan - expense calculated using their formula for that specific plan was $17,000! I have not been putting in our TPA annual valuation fee unless it was paid out of the Plan. It'd be great if someone somewhere could and would provide a specific answer for completing 8f.

I see many have viewed my little query but I've gotten no replies - Does anyone know if any mutual fund companies are required to report fees/commissions, etc. to plan sponsors for the 5500SF reporting? Or - is question 8f just ignored if no report available? thanks..

Our plans mainly are also self-directed but each plan has a QDIA so I've been checking off both totally participant directed as well as the 2T box. So far we haven't had any filing rejected but have no clue on the DOL timeline quickness for rejection.

Called AFunds this morning to see where required information for question 8f is located since their annual plan expense report explicitly states info is not to be used for 5500 filings. Repeatedly was told there were no other reports, the annual summary could not be used and this was all detailed in the recordkeeper direct agreement client signs when starting the recordkeeper direct program. Question - anyone here get better and more proactive information that me from American Funds on how to answer 8f? Any advice given will definitely be appreciated. Thank you.

Plan uses group annuity (John Hancock) as funding vehicle - are the commissions paid to the broker included both on questions 8f & 10e? Secondly, Hancock's annual 5500 Sch A report which gives the commission total also shows a $43 contract admin fee deducted from the guaranteed interest account, yet the annual balance sheet on the administrators report shows $740 as the contract admin fee - is only the $740 considered towards total on 8f? This is my first attempt completing the filing using EFAST! thanks for any assistance you can give!

Can H-W company continue to file an EZ if have employee who has not yet become eligible due to min. hours? Thanks for help on this.

401(k) document was amended to include company B as an additional adopting employer of Company A. The primary employer, A, merged with another company © and the plan assets of company A are being transferred to Company C's 401(k) Plan. Company A's plan is to terminate. There are two remaining participants in the B company. This company was not part of the deal between A & C. Can the two participants from B be terminated and paid out fully vested? Thanks in advance to making time to assist me with this!

Reviewed the 1099-R instruction book and it states if death benefits are paid that are not part of a pension/profit sharing plan, etc. a 1099-R is required. My situation includes a death benefit paid, from a life ins. policy, as proceeds from a DB plan. Is my thinking correct that a 1099-R is not required for the life ins. proceeds? New situation for me...thanks in advance.

Please confirm that Top Heavy remains a potential issue annually with the regular SH Match (versus the new automatic enrollment w/cola SH Match). Thanks a million....mind has gone blank!

Thanks, John, for making time to give me some answers. If they adopted the final 403(b) regs, as you suggest, and then terminated the plan, would those few participants be able to transfer their TSA funds in to the Money Purchase Plan (which allows for transfers/rollovers)? Cathy Two things: 1) a "plan document" isn't technically required by the final regulations, but a "written plan" is (yes, that may just be mincing words FWIW). Only the preamble to the Final 403(b) regulations uses the word "document". The written plan could just be a collection of the contracts, agreements, etc. as long as they cover/include all of the necessary items to satisfy the Final regulations. 2) I don't remember reading a section where a frozen 403(b) plan would not be required to comply starting in 2009 (but another commentator may help us there). Another option would be to adopt the Final Regulations now which allows you to terminate the 403(b) plan. Wow, they still have a money purchase plan! Not many of those left around! The broker might be saying the money purchase plan could be merged into a 401(k) profit sharing plan, which isn't a bad idea, if it's really necessary for the employer to do that. We have a 457 forum here, you can ask specific question there. I'm guessing the employer in your case is a non-profit? A 457(b) plan for a nonprofit can only cover primarily upper management and highly compensated employees (top hat plan). One reason for that may be that the money "deferred" is not protected by a trust, it is still subject to creditors. Now, why spend the money on a money purchase merge/restatement, instead of just adopting the Final 403(b) regulations for the 403(b) plan? If you go to a 401(k) plan, then you have to test average deferrals (ADP test, unless you adopt Safe Harbor provisions); whereas you have no ADP test on a 403(b) plan. Please find someone (other than the broker) who can give the employer the advice they need to have the best overall plan(s) for their specific circumstance.

We administer a Money Purchase plan. Broker called to say he wants it amended/restated to a 401(k) as he's freezing their 403(b) due to new regs and wants the 4-5 NHCE now participating in the 403(b) to be able to defer in to the 401(k). He also mentioned the only HCE in the workforce has a 457 Plan so wouldn't be deferring. To accomplish what the broker wants, is it as simpe to use a Standard 401(k) document with only 4-5 employees deferring? Can the HCE be eligible and just not participate or should he opt out of the 401(k)? Thanks for any assistance

I know virtually nothing about 403(b) plans. The broker on this case called to say with the new 403(b) regs, he wants employer to freeze it (only 4-5 NHCE ee's contributing), thus avoiding to have 403(b) plan document. I have no idea if this is true or not. Then - he wants us to amend/restate their exisiting Money Purchase plan to a 401(k) to allow the 4-5 employees now in the 403(b) to contribute to it. Only one HCE in the company and he has a 457 Plan (know nothing about those either). Can someone tell me if the broker's idea makes sense? Thanks in advance for any assistance.

Rec'd an e-mail recently asking if this user group is still alive and well. It'd been so long since there was any activity that I'd forgotten I was the leader so Dave Baker had to help me get back in the loop with a new password, etc. So, this site is now once again active for anyone using the Blaze system(s) who has questions or comments, etc.

My mind has gone blank - can IRA contributions continue to be made after age 70 as long as person has earned income? Can min. distributions from IRA's be then delayed? Thanks...