rcline46

Of course check the document provided by ADP first to see if such a nonsense rule is actually in the document. Under law they are just WRONG on deferrals. Match is a bit trickier, since the match maximum can be reached at a different time than deferrals. That is the match % of deferrals can be reached strangely because the deferral % is based on the $250,000 cap.

If termination is a distributable event in the plan, and all three loans were defaulted and deemed distributed, then I would take the position that the loans were actually distributed even if the balance of the account was not distributed. Now we have an account balance of $37,000 and NO outstanding loans. Participant can borrow 50%.

The document should specify somewhere the basis for matching contributions, normally the doc will say 'on a per pay period basis' or 'quarterly' or 'annual'. Check the document for such language and go with it.

Since that is state centric, I don't know. I do know New Jersey has the restrictions.

The 8955 has social security numbers on it, and some states have restrictions on emailing forms with SSNs. It could be a very dangerous practice.

I have 2 words for you - component plans.

Who's The Employer by Derrin Watson. Review his articles on the Benefitslink home page. Attribution rules for controlled groups. These situations are common in qualified plans so it is worth your study.

Involuntary distributions are not in the exceptions to the 10% excise tax, so the tax applies.

Thanks all. I THOUGHT the 417(e) rules ruled, but reading the PBGC notices, they SEEM to read you must use their rates to pay on standard terminations. I think all regulations, announcements, and so forth should be writter at a 12th grade level, and clearly. Oh well.

Somehow I got myself totally confused, so what else is new? Terminating DB plan covered by PBGC. Act Equiv is set to GUST, fully amended to PPA/EGTRRA. IRS says to use its rates for PVAB and lump sum distributions. PBGC says use its rates for lump sum distributions. Which rates do I use for distributions from on-going plans? Which rates do I use for distributions from terminating plans? Why can't they get their acts together and use one set of rates for PBGC premiums, funding and distributions? Never mind answering this one, "Its the government, stupid!".

Most of our one participant plans will not want to go thru the hassle of getting and remembering the efast credentials.

This is a very common design, and the associates plan has a class exclusion of 'key' employees. There is no problem transferring the account from one plan to the other in a ttee to ttee transfer. Since no key employee participates there is no problem with TH.

Sub S k-1 is not ever available for plan compensation. -0- W-2 means -0- contribution.

Look to profit margins on other service industry models. In general, the ROI is very low in all service industries.

Most prototype plans did NOT require the amendment to be signed if no changes were made to the provided amendment and the amendment contained default provisions.

We know that under document terms, prevailing wage contributions can act as a QNEC for passing ADP testing even though the prevailing wage is not a QNEC and is not subject to the QNEC withdrawal restrictions. The question is in a 3% non-elective Safe Harbor plan, can the prevailing wage be used as the 3% SHNEC? I am not seeing the stretch although the concept is attractive. Any thoughts on how this might be accomplished? THanks for any and all ideas.

Check you document under the ACP test very carefully. I have seen them written where the match contribution testing section seems to say that the contribution must pass testing. Depending on how you read that section, then just maybe you might reach the conclusion that the amounts WHEN DEPOSITED must pass the test, and therefore there would not be a giveback for forfeiture. With no giveback then no excise tax. Moral of the story - don't read the language as if you already know the answer. Read it for clues on how solve problems, for maximum flexibility/wiggle room.

1 ee means no worry about failing ADP or ACP, so no need for SH in 2011! Plus may be limited due to contributions in the original plan. Using prior year testing will get you through 2012 at least even with immediate eligiblity, though 2013 if new hire does not come in until 2013.

An interesting sidelight - the trustee (and in this case, probably the sponsor) should be aware that they acquired a non-qualifying asset. If they don't know, they should have gotten advice before the acquisition. This is another case of 'Don't make the client's problems your problems'. If they are so slow in providing information that you cannot provide timely advice, it is not your problem!

When a plan terminates, we always did/do an SSA to remove all prior reported people. Do you want to answer the question 20 years from now when the participant comes knocking?

Did everyone forget about the prior year testing assumed 3% for NCE, giving 5% to HCE? Although not quite as good as a SH, its better than nothing! Also, a 3% QNEC and current year testing would get them 5%, but the QNEC cannot be used for a4 testing. One should always remember to consult with an experienced TPA. SH has only be around since 1998 so get with someone who had been around a while and knows how ALL of the rules work.

CHange the document to NOT give the SH to HCEs, or at least not to partners. Only for 2012 and beyond.

RUN FOR THE HILLS, AND DON'T LOOK BACK! ! ! Ok, you said other advice. Highly likely he has a standardized prototype from wherever he is invested, and a box where he threw all communications without looking. Start there to recreate documents. Is he sure it is not a SEPP instead of a qualified plan? It will probably require a visit to his office, and a review of the statements from the asset provider, then communication with the asset provider. It is likely VCP will be required, at least the IRS fee should not be horrendous, but your time could mount up. And yes you can cover all problems, in fact you must cover all problems, in one VCP submission. It would be expected that ALL prior required 5500s would need to be filed. It may be preferable to just have the plan disqualifed. You will need legal advice on that. Of course that means taxes on the full amount now. I wish you the best of luck!

See Page 5 of the instructions to the 2009 Form 8955-SSA - heading of Signature.

What to do is stated in the instructions to the 8955-SSA.