thepensionmaven

I agree that it is not fair to the QPA to have to take and pass both ERPA exams to become an ERPA, but an ERPA is automatically designated as a QPA. Having obtained both designations, I can honestly say the ERPA exams were much easier. I can certainly understand the IRS' position that they want all their EAs to start on an equal footing, but that doesn't mean I have to like it. Oh, and by the way, I'm the moderator of this message board.

Participant terminated more than 5 years ago, was 100% vested and was paid out. Participant is rehired in 2012. Does this person start over for eligibility and vesting purposes?

I'm sure there is a penalty for not issuing a participant a 1099R, but I can not find it anywhere. The only penalty for non-issuance of a 1099 mentions a flat $100 for non issuance of a 1099-MISC. Does anyone know what the penalty for non issuance of a 1099R is? I just took over a plan and a participant rolled over a distribution in 2011 and was not issued a 1099R. I'd rather be safe and issue one now, but would like to warn the client that there will be a penalty.

I used to work for a law firm-TPA firm that prepared plan conversion amendments. This was prior to the 411(d)(6) regs- I do not recall whether it was DB to PS or PS to DB. We are speaking of a sole proprietor with no employees. Since we are speaking of an owner-only plan, what is the opinion??

Have an LLC prospect that wants to do a combination 401(K) and defined benefit plan. How do the LLC members pay the elective deferrals to the plan, through a personal account, from their draw??

We've had this issue arise a few times over the years and I was wondering how others handle the situation. Employer/Sponsor approached with questions about the pension plan, either general or participant specific. Employer passes the participant on to the TPA rather than calling TPA himself. In the past, we have told terminated participants that they should be asking their employer and if he does not know, he should come to us because he is the trustee and only he can give out this information for privacy issues. Other TPAs I know have told participants that their E&O policy only allows us to deal directly with the Employer/Trustee and all questions must go through the Employer. An insurance broker I deal with is telling me that this is a HIPAA issue and there is a $1000000 fine for giving out any information. Sounds good, but I don't think this applies to the situation. What do you think and how do you handle situations like this?

Does anyone know of an Excel spreadsheet capable of cash balance and new comparability illustrations as well as testing in one spreadsheet? I found one a few months ago but the calculations for the cash balance portion referred to empty cells, so it is unusable Anyone know of a home grown spreadsheet for sale?

GHBC is the company that has taken over the DB prototypes that were previously offered by MetLife (New England Life before that). For a relatively small registration fee and a small annual fee, an Employer can adopt these prototypes, and the Trustees are not limited to any insurance company investments. We are using these plans for our frugal clients.

Hey, thanks for the compliment! Being a TPA for some 30 years now, I am using Datair and am looking for something better. What does being a "newbie" have to do with the answer??

Actually, I was asking if there is any difference in terminating a cash balance vs a traditional DB. I have been in thepension business for 30 years - I know what I know and ask when I don't I have handled only a handful of CB plans vs over 100 Traditional DBs.

You fund for the shortfalls or the substantial owners waive benefits for underfunded plans. On the other hand, for overfunded plans you allocate the excess, or you transfer the excess to a successor plan. If you want to revert the excess plan assets, get an ERISA attorney involved. From your question, it appears you need to do a lot more studying of how defined benefit pension plans operate. Good luck. Thanks for the information. Didn't realize that criticism would be a part of the answer. That was very useful.

Does anyone have experience terminating a cash balance plan? If the accrued benefit is equal to the hypothetical account balance, how do you handle the disparity between the total actuarial value of plan assets and the total hypothetical account balances of all psrticipants?

Does anyone know of any web-based defined benefit valuation software?

Tom, Do we know WHY the delay with the EZ form? I suppose the immediate solution, especially if we want to get paid, is to file 5500-SF as a 1 participant plan.

Do we even know why the delay?

We currently administer a profit sharing plan for a doctor-sole proprietor with one employee. It was just brought to our attention that the doctor has a P.C. as well, with one employee also. Per the client's wishes, we amended the sole proprietor plan to include the P.C. and its' employees. The salary for the doctor from the PC plus the self employed income from the sole proprietorship brings the doctor over the 415 limit on compensation, and he would be eligible to make the full $49,000 contribution. However, his self employment income is only $150,000 and obviously can not justify a contribution of $49,000. Can we combine the income from the PC with the self employed income so he can contribute the full $49,000; and if so, woiuldn't it have to be split between the PC and the proprietorship? Can he deduct the full contribution from the proprietorship since the PC tax return has already been filed and the accountant took $0 deduction and wanted a $0 deduction.

One of our clients decided to terminate his profit sharing plan because there was a former participant/employee who stole quite a bit of money from them. The client's attorney suggested they terminate the plan as soon as possible. The account was liquidated and all people rolled over except for one. The participant involved had an account balance well over $5,000 and is not married. The client's attorney advised them to pay everyone out by 12/31/10. The participant involved has refused any and all mail from the client, and the client sends everything certified, return receipt. The client still has the check representing the 80% and has not forwarded the 20% withholding yet. Any suggestions on how to handle the check the participant will not accept??

I believe the IRS gives 12 months from the date of termination.

We administer 2 plans of two companies, one company owned 50/50 by husband and wife; one owned 50/50 by the two adult children. This is not a controlled group, there are no shared employees. For HCE status are the non-ownership adult children 5% owners of the corp that they do not own; and likewise, are the parents 5% owners of the corp tha they do not own?

Just wanted to be sure there was no proble, I didn't see one and wanted to ask if I was missing anything. The plan was amended to preclude new Participants at the time the plan was frozen and the plan is not top heavy for the year in question. I always think the worst case on an audit, thinking the auditor will ask about 401a4 and 401a26 which would not apply in this case. Thanks form your assistance.

We were asked to review a DB that has been frozen for about 8 years. It seems as though the Employer had no interest in making any more contributions. Aparently the only people still in the plan as of the current year are those who were in the plan as of the freeze date. when I asked the employer why no one has come into the plan since the freeze date, I was told the previous administrator told him since no new participants would accrue any benefits, they were not participants. Proper 204(h) notices were given, the plan was amended to cease benefit accruals and all required as well as optional amendments have been prepared and signed. The employer has received a letter from IRS that the plan is being audited for 2008. Any ideas on how to proceed - they do not want to use the current administrator, some disagreement over fees!

To clarify the clarification, CPAs, Attorneys and enrolled Agents who are active and in good standing within their licensing organizations are exempt from the competancy testing requrements, as are Enrolled Actuaries and ERPAs. It's not on the 2009 5500 forms and won't be on the 2010 forms. So, if you are preparing a 2010 form in 2011, you will have to have a PTIN but there won't be a place to put it. Just to clarify this point, unenrolled preparers will be able to get PTINs through the new system when it is running. They'll eventually (Dec 31 2013) have to pass the competency test or become enrolled to renew it.

It is my understanding that if you complete the ERPA requirements and are granted ERPA status before these tests are required, you do not have to comply with these "competancy tests." (That's one of the reasons I just took and passed ERPA I.)

This has been the subject of much discussion over the last few years. As pension professionals and preparers of Form 5500, we are indeed tax preparers as much as we may not like to be called such. I draw your attention to an ASPPA asap 08-24 which you will have to get from the ASPPA website as I do not think I can duplicate it for you here. Basically, The Small Business and Work Opportunity Act of 2007 expanded the definition of a "tax preparer" and expands coverage to include preparers of any return (not just tax returns). Further clarification can be found in IRS Notice 2008-13, and the three Exhibits contained therein. These Exhibits are lists of what the IRS considers "tax returns", and guess what? Form 5500 is included in Exhibit 2. Exhibit 2 is a list of "information returns that may subject the preparer to a penalty.