rcline46

Actually, Rev Proc 2008-50 has all of the corrections needed in it. They should suffer the consequences of their actions.

1. Tell them they need an ERISA experienced attorney to fix the problem OR make sure you bill well for every minute you spend on the problem. Get an engagement letter and deposit. 2. Do not EVER AGAIN let a client handle ANYTHING to do with an ERISA plan without going through you first.

Because the contributions require EOY/1000 hrs, they can be removed for anyone who is not dead, disabled or retired. If it is a profit sharing plan, why are the match and non-elective contributions fixed in the documents? They should be open for just these reasons.

You have several problems. If you are signing for the client you can file today, if the client must sign then you have to mark the 5500 for extension and include the corp extension. If you normally file on an accrual basis, then you have a change in accounting which you must disclose. If you normally file on a cash basis then you are ok. I would put on extension anyway, but check the rules to make sure you are not too late to get a 5500 extension!

Recent item in Dave Baker's newsletter says FTC says qualified plan loans are not subject to the Red Flag rules.

I don't see how the union can sponsor the (single employer) plan. A plan must cover 'employees' and the members of the union are not employees of the union. A union can only sponsor a multiemployer plan and this does not appear to be situation. If this is only for this employer, the employer will have to sponsor the plan.

That is my understanding of the vesting rules on RMDs. See 1.401(a)(9)-5 Q & A 8 for DC plans, 1.401(a)(9)-6 Q&A 6 and 5 for DB plans.

The rule only applies to an existing plan. It does not apply to a new plan.

I seem to remember that if an RMD is reduced for vesting, that the future RMDs must be increased by the increased vesting on the prior payments - check on this.

I am not an attorney, nor am I familiar with MN law, but here goes: The employee has the right to revoke deductions, and if not paying on the loan will have a deemed distribution with tax consequences. The employee will still owe the loan which might prevent any future loans. (I think a default would also cause the trustee to deny any future loans anyway.) My concern is if the loan is 'fresh' (new) then it may have been taken under false pretenses (no intention of repaying the loan) which is fraud under the loan regs. I doubt the plan administrator would wish to pursue this line, but the IRS or DOL, under audit, might.

EGTRRA docs were approved by IRS in 2008, you need to check to see if YOUR plans actually have the EGTRRA restatement done. Possible yes, probable no.

call it profit sharing under -11(g) amendment and pass general testing?

Refer to the final 415 regulations, send the CPA a copy of the amendment to the plan. Let him figure it out.

My take on the subject. Only a PARTICIPANT can have an accrued benefit. Any EMPLOYEE can earn accrual service without being a participant. Take a plan with an eligibility of age 21, with an employee hired at age 18. The employee can have 3 years of vesting and accrual service before ever entering the plan and becoming a participant. Yet, before they actually enter the plan, they have no vested percentage and no accrued benefit. Should the plan be frozen, or the formula changed, before their entry date, they have no rights at all to what the old formula was. On entry to the plan, it is all calculated based on the then existing rules. They do not lose vesting and accrual service, but if the formula is now -0-, ie frozen, they have no benefit. A cautionary note - if the plan described by the OP is letting people in with -0- benefits or, they need to watch out for 401(a)(26).

I prefer to force them to sign a zero form and I also try to force spousal consent to the 0!

I would say yes, because it is income which would have been received had he remained in employement.

I will confirm what J Simmons said, NO OTHER BENEFIT CAN BE CONTINGENT ON THE ELECTIVE DEFERRALS (matching contributions excepted). This is very clear in the regulations. The employer could be asking for problems by using the deferral account in their calculations. As for determining stock grants based on various conditions, I doubt there is any direct guidance of any kind anywhere.

If you are set up properly for electronic notification and election, then you have proof the employee was given the opportunity to defer. Suspension for hardship is not the question, because you do have election forms. The underlying precept is how do you prove the employee was given the option to defer? If using paper forms, the only proof you have is either a receipt from the employee saying they received the forms, or the form on file.

It is an election form signed by the participant, whether for an amount or for -0- why would it not be saved? The DOL and IRS can take the position that without the form, the participant was not given the option to defer, and the company will have to make contributions for the participant based on the EPCRS guidelines.

The participants do not have a choice. Only the trustees of the plan have the choice of where to invest the assets, as long as the investments are prudent. Individual investement direction is not a protected benefit.

What will your software do when it has 'missed' payments? The interest should be (pennies) higher on a bi-weekly schedule - will the software cause the loan to be extended for a tiny final payment? I agree the changes will be minute. We have had clients change payroll frequency. We billed the client for our time to prepare new amortization schedules so the software would process correctly.

I don't see how it is not possible to have all assets valued by 10/15. Someone is falling down on the job.

The only delay I found in that mess is electronic filing is required for all reporting years beginning on or after January 1, 2009. Did anyone see anything else?

Balloon payments are not permitted under 72(p) - get a PDF version of law and or regs and search for balloon.

Yes, you are getting it now. If they are not excludable, then you must use information from date of entry.