rcline46

In any engagement there is a necessity to review relevant materials, whether implicity or explicitly stated. Documenting items of concern is a routine part of any review. I don't see where providing those concerns in a formal way would cost extra. This is not providing advice. Upon presenting the concerns I see no problem in offering to provide advice on how to address those concerns for additional cost.

Wonderful car! A grey Edsel convertible! Oh, we were thinking of a red Mustang?

It depends on the correction you are doing. For deferrals, the credit is floored with the 6621(a) rate (DOL calculator). For certain other corrections, you can use actual earnings/losses.

Your choices are remove SH for A or add SH for B. I do not think you have any other choice. However, if you work a targeted QNEC for only A (document must be right and so forth) you might accomplish what you want and it will look like a SH for A.

I went back and read the original post. That agent is/was flat out wrong! IMNSHO. I choose to ignore his comment completely. A forfeiture does not belong to anyone, it is just money in a plan until allocated to a source and then takes on the the nature of that source.

The Corbel documents clearly have a choice to use ANY forfeitures to be applied to any Employer contribution including ADP test safe harbor contributions. Since these are approved documents the IRS cannot go back on the approval. If this option was chosen you have the choice of some IRS off the cuff comment being law and you have a failure to follow the document - big oops, or following the document. Remember the original comment was regarding an EPCRS correction and I would agree with the IRS - stick it to the employer who messed up and not allow forfeitures to be used for corrections. I do not think in any fashion this applies to normal plan operation.

Duh! Do one plan for owner, another for staff, file EZ for owner, no problems.

As long as not significantly in advance of paydate, and it is from a processed payroll and checks not handed out yet, there is no problem.

Also watch for plan limts like a limit of 11% of pay which WOULD limit the plan year deferral.

Use the search function and review prior threads on this. You may find the discussions interesting.

Forfeiture money can be used (according to docs and LRMs) for anything an employer contribution can be used. Ok, so it is 'plan' money, but there is no restriction on its use. I would even fight the IRS on its use in EPCRS.

Note the presenter was speaking ONLY about corrections under EPCRS. I do not see any restriction on using forfeitures for QNECS, SHNECS or SHMACs on a current basis, not could there be restrictions since forfeiture money is employer money. It has no 'vesting' or any taint applied to it. BTW, in the past we have used forfeitures to satisfy employer contributions and the IRS approved it.

The client has been resistent to SH in the past, but now that the HCEs want to contribute the maximum they are willing to listen, finally. Also because they want the max, will likely approve going to current year testing this year. Thank you all.

Plan is using prior year testing and the client does not like the limit on the HCEs. Unfortunately the current year results are worse. So, they have decided to do a QNEC so they HCEs can defer more. The client understands the QNEC must be deposited before 12/31/2010. So far so good. It appears the QNEC must be based on the compensations for the NCEs for last year (2009). The document allows me to limit the QNEC to those employed at end of year 2009. THis means that we can compute the QNEC based on the anticipated deferrals for THIS year for the HCEs such that the test will be passed. Did I miss anything?

If their is to be competency exam, then NO ONE should be exempt from the exam. Of the titles listed only the ERPA and Enrolled Actuary have a shot at getting it right. THe others do NOT normally do 5500's and in my experience usually get it wrong.

You can impose a 1 year wait on SH, but if eligible to defer earlier, they are subject to ADP/ACP testing and must receive a Top Heavy contribution if the plan is Top Heavy. Therefore it may not be better to have the wait.

Big up tick in notices to our clients - bet it is the same problem as the 2006 notices. I think KS just sets up a cut off date for processing the 2007 forms and trashes those not processed.

Note that the leasing company is sponsoring a MULTIPLE EMPLOYER plan which the firm has joined. That should be enough of a clue that the employees are NOT common law employees of the leasing company.

I think there is still a prohibition of rolling Roth IRA money into a qualified plan. THe only Roth rollovers permitted are from another qualified plan or 403(b). I think the participant is 'SOL' unless they use other assets.

Contact your local Department of Labor/ Employee Benefit Security Administration (DOL/EBSA) office, found in the blue pages of your telepone directory, or email them at www.dol.gov

I add this with a sly grin - are you prosecuting or defending in this case?

The proposed test of compentency does not even apply to those who prepare 5500s because personal or business tax issues are not relevant. This needs strong lobbying against including 5500s because they are INFORMATION returns, not TAX returns.

I think the others detailed my position. But let us start with - I really don't think someone with no training or experience should EVER touch a 5500, and that includes plan sponsors. Ok, should ever be responsible for completing the 5500. Anyone can gather data and attempt to fill out the form, but the form is full of traps for the unwary. Even thought the Plan Administrator and Plan Sponsor are responsible for signing it under penalty of perjury, they can sue the Paid Preparer for malpractice. Now ASSUMING your preparer is competent/practiced enough to complete the form (credentials are not necessary) then I think there is an underlying need to review the documents governing the plan. Otherwise one cannot complete the participation question correctly - in, out, why out, counts and the like. (No fair saying information was provided, and this does not constitute an audit, just routine care in completing the form.) This same care extends to the asset reconciliation and answering the wonderful list of yes/no/amount questions. For example, there is a loan - does document provide for loans, was it in default, was it to a disqualified person? Of course the old document (maybe) does not even say the plan was a qualified plan (which I think we assumed). Just because a plan is covered under Title I of ERISA dos NOT mean it is a qualified plan. Ok, back to the question. If the Paid Preparer puts herself forth as a professional, she should act as a professional and disclose any questions she has about the circumstances surrounding the engagement. THat is the definition of a professional. Furthermore, should she have any designations in this industry, I believe this rises to a DUTY to inform - or to resign.

I think the preparer has a DUTY to mention, in writing, the perceived issues with the plan. I don't think there is a LEGAL requirement. The reluctance tells me the preparer is not acting in a professional manner.

Do you keep copies of their last W-9? Cafeteria election forms? Other signed forms relating to payroll? A deferral election is no less important and needs to be treated the same as all other forms. Even forms where they elected -0- withholding. The penalty would be forced company contributions to those employees because you cannot prove their elections changed.