rcline46

ERISA attorneys make a LOT of money on this, and won't publish a step by step guide. Your client MUST hire an ERISA attorney if he wants to do this. The only advice you should give is don't do it without an attorney. If the client is hell bent on doing it then the cost of competent legal advice should not be a problem.

I have learned to take the position that I AM THE PROFESSIONAL HERE. The other party has to prove the negative.

There must be a dozen threads on this issue, four in the last year.

If the TPA is 'unloading' the plans, then professional curtesy would dictate helping the plans get transferred, which would include providing the information in electronic format. I agree that outstanding invoices/issues are an impediment that needs to be resolved.

We got an enormous number of them - I think something went wrong in Kansas - like they lost a couple of truckloads of forms.

Common control is also used for tax purposes, and now for tax purposes there is only a 50% test, but for qualified plan purposes there is an 80% test. The 80% test was moved to a new section in the code a few years back.

Are you confusing 'common control' with 'controlled group'? They are different animals.

The match formula in the document would be something like "100% of deferrals." No cap would be specified, so the match and deferrals are independent of pay. Only the 402(g) limit would apply (with catch up if applicable). Hitting the 401(a) (17) limit is not relevant to the contribution. However, during testing, the (a)(17) limit would apply which increases the effective rate of deferral and match for those making over the a17 limit. THis also means there is a higher liklihood of failing the ACP test if catch up contributions are involved. THe whole thing changes if there is a cap on the match.

Check the final 401(k) amendment - I think that if you have a match in a SH plan, there cannot be any restrictions on receiving the match. (no eoy 1000 hr requirement)

I would tell them one year before the IRS issues its letter.

If its in the document it is perfectly legal.

Only one SOAPBOX comment here - creeping socialism.

I agree with Sieve.

I think the lawyer did their job by identifying the past problems (in writing I hope). THe lawyer should get it in writing that the client acknowledges the failures but does not intend to correct. I dont see the lawyer in the facts given being a fiduciary. If the lawyer was not asked to review the operation of the plan, but did so out of due diligence Kudos to the lawyer. After that, drafting a document according the the specifications given is a separate task. If not submitting for a determination letter, I don't see 'practice before the IRS' issues. Other than drafting failures, I don't see any exposure. I don't know the TPA did use a pre-approved document in the first place.

Disqualification should be a sufficient deterrent.

Dont aggregate until you see the amendment (signed and dated by the sponsor of the other plan) removing the SH match. Tell your client what is happening and why you cannot aggregate. Note that it is the other plan that is in trouble.

If the plan were subject to audit in 2009, then check the rules about including the short 2010 audit in the 2009 audit. I would terminate the plan at the end of 2009, and that would remove everyone without a balance for 2010.

www.efast.dol.gov

Confirmed. You are correct. Note if using prior year testing you need to re-run the prior year also using the TPG.

Absolutely never ever ever purchase land/buildings etc with QP money. THe participant needs to hire and experienced ERISA attorney to guide him through all the pitfalls. It will cost in the beginning, but it will save a LOT of grief later.

Well for pity's sake, send the darn notices, don't delay. And hope no one questions it.

The proper procedure is to restart the termination process. I think the notices have to be sent 10 to 21 days BEFORE the application is filed with the IRS.

For 401(a) plans, there is a specific rule for these 'clients'. They are actually not 'employees'. Right now I don't remember where I dug it up, but it is in the regulations. I would think it would apply to 403(b) plans also. It does not matter that they get a W-2, if you collect Social Security from their checks, or anything else. Check the definition of 'employee' in the code and regs.

Bad amendment - must go to at least Dual entry.

Doctor Group, Cash Balance plan plus a 'Maybe' Safe Harbor 401(k) Profit SHaring plan, all on Corbel documents. Obviously Top Heavy. The DC doc says it makes the TH contribution unless it is a Safe Harbor year, and the DB document does not make reference to the DC plan - all the usual language. Now let us pretend that the DC plan elects safe harbor for years 1,2,3,4 but not 5, and elects again in year 6. THe DB plan provides TH in years 1,2,3,4, does not in 5, does in year 6. THe question is what is the DB TH formula in year 6? Is it 2% times 5 years or 2% times 6 years? THe document reads "2% times Plan Years of Service" and years in which TH is made in DC plan is not referenced. First, I need to fix the documents for cross TH minimums (ie not TH in DB if made in DC) or just always make TH in the DB plan. OR exclude years of TH made in the DC plan from "Plan years of Service" in the DB plan. Any other thoughts?