rcline46

Are you saying that the 410(b) test fails both the 70% AND ABPT? If so, you inna heap of trouble boy!

Look at the 'Overall Report' test which lists the HCEs and test results - last column should be a PASS and if so you are ok.

The answer is no. A SH match or SHNEC must be given to everyone eligible (and deferring for the match). No exceptions, no end of year rule, no 1,000 hour rule. Document type does not matter. Only eligibility to defer.

Sunguard's Relius system is supposed to have it in the next release. Do not know about Omni systems.

Is he becoming a director because of his investment? Then that rises to self-dealing, or benefitting from the assets and smells like a PT. Why doesn't he pay for a legal opinion? Or are you an attorney. If not an attorney tell him you can't give a legal opinion, but it smells bad and he had better get a legal opinion.

Wake up and smell the smoke folks. This is coming in ALL mutual funds unless ASPA can get them rescinded. It is the 'law of the land' currently. Better get used to it!

The participant is entitled to what is in the plan document. The employer cannot change it nor deny it. If they try the participant will have recourse in the Federal Courts. Or put differently, what does the 'bad boy' clause state in the document? The Plan Administrator must follow the terms of the document.

Since I have seen this before and was perplexed as to how an accountant, presumably a CPA could screw this up, it occured to me ask a question... Is the LLC taxed as a corporation or as a partnership? ( I know - gave you a 1065 not an 1120) If taxed as a partnership, under what code section are the partners receiving W-2 income from the company they own? Any other authority? They tend to get real nervous when I ask that in terms of a plan qudit!

Sorry, I did not specify this was a distribution from a qualified plan. Read what I could on 35.3405-1t and as I suspected it did not shed any light on the subject. Still waiting to hear from the insurance company. Funny thing - when I challenged them on their original quote of 1.884-5 as authority, they would not talk to me, insisted on going through an intermdiary. 1.885-5 deals with Foreign Branch Operations - a far cry from a qualified plan distribution! And I will not accept 'Cuz I said so'. My turn to demand a cite!

A benefit is being paid from a group annuity contract at an insurance company. Because we only have a PO Box for the participant, but do have a valid SSN, they say it is not a 'Legal Address' and must withhold 30%. I reviewed the only reg I could find on topic - 1.1441-1(b)(3)(iii)© and found no support for the 30% withholding. I also looked at 3405(e)(13) (no regs found) and still found no support for the 30% withholding. Also a search of RIA using 'legal address' did not turn up anything useful. Does anyone have support for the insurance company, or are we stuck with...... "Because I said so"

(opinion of legal counsel deleted in good taste) If a default and deemed distribution made, it does NOT remove the need for the additional payments!!! That can only happen when there is a distributable event. So, the participant still has to repay the loan. And now there is a 'cost basis' established which will complicate future distributions! That is NOT a good result. Lawyers are not thinking this through, and they don't have to administer the plan in the future.

I have heard of it but...... Is it a prudent investment for the trustee to invest in a start-up? IE would an independent trustee do it?

Well, he is still alive and kicking, maybe a new pseudonom? Or maybe really busy!

Thinking out of the box..... You cannot STOP a SHNEC, but you can issue a MAYBE notice and decide next december. You cannot do a MAYBE on the match, but you can give a 30 day notice and stop it for periods after the 30 days in the notice. So give the SH notice in December and give notice of suspension. As long as you know ahead of time it seems to work

Let's be practical. Did the recordkeeper tell the plan administrator the loan was in arrears and had to be caught up by date x? Was the PA notified of their liability? Is it in writing? If the loan is paid within the 5 years I really don't think the IRS is going to disqualify or penalize the plan, and if you 'cure' the loan with the missing payments no one will raise a stink under audit. IMHO

What kind of plan? What benefit forms were offered? What benefit form was taken? Need to know these answers. Then just a non-amender filing, maybe. Maybe he signed a prototype and didn't know it. Who was document provider? Lots of questions here.

Participant didn't 'miss' payments, only was late. Since not beyond 5 years must continue to make payments until loan paid. No default.

There is nothing official that I am aware of. Of course, in my opinion there isn't any question! On the other hand consistency does count in the eyes of the IRS.

Another question that comes up regulary. And the answer is sooooooo simple. If you replace '401(k)' with 'CODA' (for the uninitiated that is a Cash or Deferred Arrangement') and remember the rules for a CODA- Election must be made before there is constructive receipt of the funds. Then what is constructive receipt? When the recipient can control the money. And they con't control until they receive the money! See, the answer is simple - A - the first PAYDATE on or after the Entry date.

Must be a lot of this going around. Exact same thing just happened with one of my clients. Amend the plan and make the amendment state exactly what you want to happen, including hour and pay adjustments.

After noting that we do have our SAS 70 audit, my personal opinion is that it is a waste of time for a TPA who does not handle client money. It is just a money maker for the CPAs. But guess who gets to demand them? Sort of a self fulfilling income generator, and they have to be done every year!

I love this question. It comes up so often! If you look to the document for the definintion of a short plan year, it only happens when the plan year is changed. The same in the regulations. Now some documents are actually written that the first year MAY be a 'short year' or may be an election in the document. So you must first determine if the DOCUMENT creates a short first year. By the way, if you DO have a short first year you had better make sure you do all of your prorations of limits, comps and so forth!!! Otherwise you just disqualified your plan. Now your problem is what period to check for compensations for the HCEs. Well, that is based on the 'limitation year' that precedes the current plan year. You have to go back to your document and see what it says for the limitation year, and go with that for HCE determination. Oh, and by the way, watch out for such quirks as calendar year elections. And don't forget that a 'limitation year' is ALWAYS 12 months, a 'limitation period' may be less, so if you have a short year - watch out for the NEXT year, because the look-back will be for 12 months, NOT the short year! Oh yes, did I mention that reading the document is recommended here? I'm sorry, reading the document is mandatory because they are full of surprises!

410(a) and its regs is where you will find entry dates - use your reference provider to check it.

Neither the DOL or IRS has given us ANY deminimus amounts on accrued benefits, so cut the check.

The law REQUIRES the effective date of the plan to be an entry date. So your entry dates are 5/1 and 7/1 based on the information provided