rcline46

First and foremost, send the bill to a collection agency. Then, do not respond to any questions, refer the supposed client to your attorney. Do not provide ANYTHING to this person. Send him a letter, certified return receipt detailing services performed, lack of information to you, failure of deposits, whatever, and terminate any future responsibility for him or his plans. If contacted by anyone in the future for your records, provide them a copy of the letter.

I think the process is calculation of failure of ADP test at the % level, applying 'catch up' where appropriate to adjust the %'s. Then calculating $ to give back, then applying $ by the new rule. Remember, the correction for the ADP testing is still by %'s first, only the giveback piece is calculated on high dollars. The failure is in the %'s and therefore I belive the reclassifying should be on the %'s.

First be sure this is a fiduciary breach!!!! Look at RR 2002-47 and see if it is covered under any compliance program and avoid fiduciary problems. You do not want it to be a fiduciary breach, just a math mistake in allocations!

But they DO count for 415, so you still can't get over 40k. The unanswered question is whether a PSP only can allow a catchup contribution!

Of course, but why? A new comp plan with two groups allows larger contributions!

you cannot do crosstesting in a prototype document. You must use a volume submitter plan.

In every jurisdiction where this has been tried the state has lost because a plan is a federal thing. However, note that the trust and resolutions have to be correct under state law. Since the trust is part of the document it has not been a problem, but technically the preparation of resolutions for a client (not marked draft!) could be construed as practice of law. I have not heard of anyone getting in trouble for this, yet.

Silly question - are the SOURCES clearly set up as relius wants them as ee-pretax and er pretax match? Incorrect sources will mess you up.

The loan was paid on time. It should have a posting date on time. In my opinion, the entity posting the loan payment made the mistake and they are just correcting the mistake.

Start with the AICPA 'Audits of Employee Benefit Plans' and the DoL regulations dealing with audits since they were modified just last year and may not be in the AICPA guide yet.

Also need to know relationship of owners - spouses or lineal ascendents/decendents to determine attribution which could change Katherine's analysis.

Also note - you get different maximum loan amounts when you check max loan from 'new' or 'existing' loans! Relius has ackknowledged problem, I haven't seen it fixed yet.

Since you do not know if GUST/EGTRRA done you are not sure if the plan is integrated. You must know that before you can proceed. Then, do the math, reallocate amounts over 415 like the doc says. Oh, you don't have the doc. Gotta have the doc!

The allowance of participant direction in a plan does not mean participant direction MUST be allowed. Participant direction procedures must be created, investment choices set up, ect. I see no failure to follow document, no correction necessary (in any document I have ever seen).

Set up a formula on points only, give everyone 1 point, allocate $300 X points.

Absolutely no protection as long as she is spouse! Unless she waives after marriage.

This is not a fun task, but it can be done. Work from statement to statement. Slow, tedious, BILLABLE but not to participant!

IF the participant does not want the new spouse to get it all, and the new spouse will not sign a waiver after marriage - is this your question? This is the only situation where I would advise putting a Joint and Survivor rule in the plan. Then 50% of the benefit belongs to the new spouse, the other 50% can have whatever beneficiaries the participant wants without spousal consent.

Ahhh, Gary - the 'in two plans' fun! For the uninitiated, the employee must be considered an employee of BOTH organizations! Leased employee in one and common law (usually) in the other, tested in both plans with full pay, but deferrals of only the plan they deferred to..... Much fun! NOT

Actually Rev Proc. 2002-21. You may also want to review the material in Derrin Watson's column found here in Benefitslink.

Only an immediate gain funding method with bases will produce a cost because you need to create a loss base to get a cost. Ok, you can (now) always fund up to Current Liability regardless of funding method. However, I don't see a requirement to create funding here. It may be wise, prudent, conservative but not required. Since the sponsor MUST sign off on change in funding method and they want no cost, I don't think you can force the issue.

First question is are they really leased employees or are they common law employees of your employer? of both? This dictates your next step(s). Even if leased employees, there are VERY detailed regulations on how leased employees can be kept out of your employer's plan, and a 401(k) at the leasing organization doesn't make the cut. Review the Rev Ruling from this year on leasing organizations and qualified plans and see what the leasing company is doing about it.

The IRS will not fight name classification for several reasons. 1. 401(a)(4)-11(g) amendments permit classification by name for additional allocations. (but is only good for NCEs) 2. An age-weighted plan is either a classification by age or by name, take your pick. In any event everyone is in their own rate group. 3. I don't think they could make it stand up if challenged, but they NEVER seem to change regs even when the law changes. Reed

If you filed with the IRS on termination (recommended) then you don't have a problem. Otherwise, if the plan is audited by either DOL, IRS, or PBGC and it is not in compliance with laws in effect on the termination date they could disqualify the plan, and the more dollars to HCEs, the more likely the disqualification (or huge penalties). Operational compliance does not work because the plan was probably operated not in accordance with the document! Consider your exposure to a malpractice lawsuit should one of these plans be audited, and then decide whether to restate or not.

A GUST restatement is required for EVERY plan in existence after 12/7/94 when GATT was passed. If in existence after 1/1/99 change that to GUST II. Does not matter if terminated and distributed, merged, or on going. If merged you can put the restatement into the surviving plan document but you must include ALL of the stuff which is different for the disappearing plan than that of the surviving plan. THis is too much work so it is recommended that the MPPP be restated before the merger, then merge, then restate the PSP including the fact it has MPPP money in it which will ALWAYS be subject to the joint and survivor rules. In my opinion any other method costs too much for product generated, but others have their own opinions.