rcline46

You have really only 2 choices: 1. print everything out - transaction details, summaries, everything!!! to a file or paper and scan it. 2. leave everything on Relius until the client is gone xxx years, then just delete them.

Remember that the 3% safe harbor is NOT required to be given to HCEs.

Mr. Poje, Are these replacement tables already for the GAR tables we just got?

Lori - it is my name, mostly! Plan Administration column. (and any others who care to look at the column)

B.A. in Chemistry, 30 years with THIS firm, started as programmer. See my column in the Journal of Pension Benefits.

Oh boy, now I am in trouble cuz I disagree with Kirk. If the public has the wrong impression, the it is the auditors problem for not properly and prominently explaining what they do, and more importantly WHY! If it is demanded by the AICPA, then say so. If by some regulation, say so. Otherwise it just looks like a way to pad the bill. Now I am not saying they shouldn't look deeper, but full disclosure and removing misimpressions are important.

Ok Becky Miller, my time on the Soap Box. I have been responding to auditors for a very long time and here are my observations: 1. Plan audits are assigned to jr members of the firms who have no idea what they are doing and consequently take way too long. 2. In general auditors have no idea how plans operate and so I spend time training them and they bill the client for this time. 3. Audit requests bear no resemblance to anything we do - explanation - the terms used in the requests are not the terms used by TPAs and so are very confusing. 4. Audit letters ask for items not even remotely appropriate for plan types - that is they are general letters concocted by the AICPA and not tailored for the particular client and plan (see 1 above). 5. Auditors don't know who to ask for the correct information - such as asking the TPA for brokerage statements when they should ask the brokerage. 6. Auditors are too wrapped up GAAP and accrual accounting to properly audit a cash basis plan. 7. Auditors refuse to accept the categories used on the 5500 Schedule H for mutal funds and waste enormous time and client's money trying to break things down. 8. Auditors keep asking for more information, much of which does not exist in a TPA environment and is rarely on their audit letter (see 1, 2, 3, 4, and 5 above). And lastly they charge way too much for value received. Obviously this does not apply to all auditors, and Becky Miller may be one it does not apply to. But my experience over 30 years in the industry supports my contention. And you don't want to discuss FASB 87/132 with me at all.

The plan has met minimum funding requirements and is much more than 10 years old. The company (LLC) has lost its contracts and is closing. All employees have been terminated. Unfortunately the plan is underfunded (about 59% funded) and the owner's benefit is not sufficient to cover the underfunding for the employees. Most of the employees would be considered HCEs by compensation. The company does not have the funds to fully fund the plan. There have been no changes to the benefit formula in at least 5 years, maybe more. We are exploring every alternative for the termination.

Plan covered by PBGC, wants to terminate, and is underfunded. As I understand the rules, we can do a standard termination and pay 'to the extent funded'. Are there any traps or problems we should be aware of before proceeding? As a note the company is no longer in business so there will be no more contributions. Thank you.

Does the plan have force out language for under $5000? Was an amendment adopted/ will be adopted for automatic rollovers? You must follow the terms of the document in regard to distributions first. If you want to charge fees to terminated participant accounts, they cannot be higher than the fees paid by the employer for active participant accounts, and the plan must be so amended, and the terminated participants must be notified before you can charge the fees.

The excise tax is essentially for contributing non-deductible monies to the plan by the sponsor. I think the sponsor has to pay, and that the plan cannot pay as it is not an administrative expense of the plan.

Of course you can. There is a 'but' - remember that the allocations cannot exceed the 415 limits based on the real 415 pay for the year!

There are only 2 ways to prove non-discrimination in compensation - either use a safe harbor definition under 414(s), or to do the test under 414(s).

If the plan is terminated and the stock is NOT re-registered then there simply is not an owner in they eyes of the issuer, and the stock will eventually escheat to the state. Dr. X is NOT Trustee X once the plan terminates. He should have had the plan sell the stock before distribution. Since he did not the response is TOUGH LUCK buddy! You bought it, now suffer the consequences. Seems if the plan ACATed the stock to a brokerage account in the Drs. name there would not have been a problem. OH, you say it was not already in a brokerage account? TOUGH LUCK buddy!

Different companies permitting a QSLOB? I think I would at least double my fees for this. Its gonna be TROUBLE!

The Keystone case, as I remember it, said if the contribution was required, it had to be in cash. So.... Are Top Heavy, Safe Harbor, stated Match, or Gateway contributions 'required'? Are they 'in the nature of' a 412 contribution? I don't want to argue the case. I would strongly recommend he get a legal opinion from an ERISA attorney, you know - the infamous written opinion that puts the attorney on the hook, to use an 'in-kind' contribution, and indemnify YOU against any adverse consequences.

Also note that because you have different eligibilites, you will have to do all non-discrimination testing based on the shortest eligibility. I cannot think of any reason to do this (unless you are dealing with multiple locations).

No bond? Case from Michigan I think about 4 years ago, sponsor went to jail for refusing to get bond, big fines, barred forever from being a fiduciary. Make it very clear the person is an absolute idiot for not getting a bond, they are very inexpensive.

First we need to know what kind of plan it is. If it is a pension plan (DB, MPPP, Target, CB, etc) the answer is a resounding NO - see the 'Keystone' case. If it is a defined contribution plan (401k, psp, etc) the answer is maybe. Why can't the 'in kind' be sold, and cash contributed? SO much easier, cleaner, safer, efficient.

Also note that the IRS has recently issued a Notice/RR that specifically states severance pay does not count. SO if pay is not counted, hours would not be counted.

What is the source of the $16,000? Is it one of those listed as permissible rollover sources? It would be very rare to have any after-tax money in a permissible source.

And the language can get you confused. There is a 'deemed IRA' available in a 401(k) plan. Need amendment to plan, corporate trustee qualfied to handle IRA accounts, and that is about it. There is no such animal as a 'deemed Roth IRA'. Then there is the Roth 401(k) which I was discussing and which I admit that I assumed John was talking about.

Oh dear Mbozek! No longer reserved!!! Roth 401(k) regs have been released are are effective for plan years beginning after 12/31/05! Subject to ADP testing, same distribution restrictions as rest of plan, including RMDs, earnings taxable in first 5 years AND if not a 'qualifying distribution.' Participant chooses split between k and ROTH contributions, separate accounting, funny things happen on give backs. That is why johnpetrancosta must review the releases on ROTH 401(k) from reputable sources, like the IRS. Trade rags ALWAYS get it wrong! www.irs.gov/ep and get it from the SOURCE john!

Better look again. Anyone telling you deemed IRA rules is reading from the wrong book. The ROTH 401(k) rules ARE different. YOu need to go to the regulations 1.401(k)-1 etc and check the rules.

Most interesting question, and somehow I didn't read/understand/see whatever Andyh's post. Just thinking about it... I would say that if someone is benefitting for 410b, then they HAVE to be considered benefitting for 401(a)(26). And I would argue strongly for that position. If I lose, then I would argue for exclusion for numerator and denominator for a26 under the process the person is technically retired and should not be considered. Any regulations? Nah, just me trying to be logical and argumentative.