rcline46

Rev Proc 2008-50 is clear on the earnings calculation. THe DOL rate is the floor. The actual rate, or the highest performing investement is measured against the floor. Appx B 3.01 is very clear on an INCREASE.

A SH match cannot be on more than 6% of pay. So there is no way you can construe a match on up to 9% of pay to be a SH match.

if you don't have a new QDIA notice, what are you going to give new participants - a bad notice?

It is my understanding that service and pay with any member of a CG counts for all members. Since the ees of B are in the A plan, then I would count the B pay. If they were not in the A plan it would not matter. I would look to the regs on CGs and 401(k) plans for inclusion of pay.

Note again - you will need a 5330 for EACH year, and the 5330 calcs are different. they are calculated as under loan transactions.

Note the OP said this was a SIMPLE 401(k) Plan, which is a qualified plan. I hope they did not mean a SIMPLE IRA. However, the same rule applies - no benefits for the year under any other plan.

It seems no one remembers balance forward accounting. If this is a daily val plan, the client just cannot do what you ask. If this is a balance forward plan, then you allocate $50,000. Any gain or loss is in the plan g/l. If there is a potential for a loss, this is a VERY BAD IDEA. Money should be put into a corp money market until the end of the year.

Well, I for one will miss you Tom. I'm a thinkin' this might be my last, don't think the company will continue paying for an old geezer to go, send someone younger. Plus I get plenty of credits elsewhere.

Tom, is this a newer version of the report you posted previously? THank you.

Facts not in evidence - Controlled group is two parts, and you must satisfy BOTH parts. Part 1 is that the same 5 or fewer own at least 80%. Facts presented do not satisfy test 1 and under the facts presented, there is not a controlled group. Under the facts presented we do even get to the plan questions.

Its always a takeover! Plan sponsor put in a new plan effective 1/1/2011. THey were give and signed a GUST non-standardized prototype document with all of the trimmings except PPA and HEART/WRERA. We think they had to be put onto an EGTRRA document. The question is - can we do this before the end of this year by using a Remedial Amendment Period (if one exists) for a new plan? Otherwise, we think this can be corrected under EPCRS. What else can the client do?

A client received a 'random' audit letter. In the letter one of the items requested was a Form 56 and a 2848 for the trustee. Form 56 for a qualified plan? First time for everything I guess. Auditor says that it is a new requirement for audits of plans. The IRS wants to make sure the trustee is 'qualified' and that the trust is a qualified trust. Although we disagree based on IRC 6903 and 6036 that this applies to qualified plan trusts which are exempt under 501(a) of t he code, the auditor INSISTS on getting the form. Anyone else run into this yet?

IRS has stated, I think the Final 415 Regs, the term date creates a short plan year for all testing purposes, even if the 5500 is on a full year.

For discretionary amendments, I would say no. The amendment must be done before the 'action'. Also, it must be done before there are any 411(d)(6) issues.

The IRS requires the sponsor of a qualified plan to have an EIN separate form their SSN. IF you were filing an EZ for this person, then you would be required to get an EIN. I think you need an EIN. Also, how does one issue a 1099 to oneself? The plan/trust made the payment and its EIN goes on the 1099. Thats my two cents.

Not quite ESOP guy. Most schedule changes are written something like 'for anyone with an hour of service....". I agree it is a document issue, and the amendment and the document language which speaks to vesting amendments have to be interpreted. Whenever we have amended schedules, we made is clear it only affected EMPLOYEES and not just any PARTICIPANT.

www.yahoo.com/finance will give you whatever you need.

See the IRS news letter for employers, sprint 2010 edition. 1.401-7(a) is the regulation. Also, read the plan document.

I think we will do 1/1 - the frozen plan is BOY value and the CB plan is EOY (forgot to mention that). And yes the frozen plan actually has an asset surplus!

We are merging a traditional frozen DB plan into a Cash Balance plan this year. My question is whether there is a 'best date' to do the merger. Is a short year better than a full year? Is there a real difference between 12/31/11 and 1/1/12? I cannot see doing an SB and 5500 for a 1 day (1 millisecond?) plan year. I am leaning toward the 12/31, but am having dizzy spells over completing the SB. Special note - we will still run the plans separately (A+B valuations are not good) and sum the vals to do the future SBs.

Oh Wow! I think the 6.2% excess went away with TRA 86. We did a VCP filing on an almost identical situation two years ago. Our solution was to remove the excess contribution (and earnings) from those affected and put it into a forfeiture account. It was approved by the service. You cannot just give 1/2% more to those under the wage base because that does not fix the excess allocation. Well, if you gave 1/2% more to ONLY those who did not exceed the wage base, and then 'shifted' enough of the 6.2% excess, but then the excess would likely not become 5.7% consistently for all. I think only the take away works. EPCRS says correct all years - but I don't think you are going to get 24 years of records.

I don't find class F to have a definitely determinable benefit. Did they get an LOD on the document?

Unfortunately, the IRS is citing the code - the code actually says "nonforfeitable WHEN CONTRIBUTED" (emphasis added). We all 'know' that it really means 'when allocated', but that is not what the code says.

I have a client with 5 levels of match calaculations. This is not possible to do in RA 15.x. Has the number of levels been increased in 16.0/16.1? Thank you.

A mistake in fact can only be taken out of the plan within 12 months of the error - consult the plan document. Amounts over that must become forfeited. ER can only take the amount of error - no earnings. If a loss, ER must take the reduced amount or forfeit the reduced amount. Who has been doing the testing? This should have been caught on the annual testing. And if you are told 'no testing because it is a Safe Harbor' - you just discovered that is wrong - there must be a test to determine if the SH amounts are correct. It is time to either upgrade your services if you work for a TPA firm, or get a new TPA if you represent the client.