thepensionmaven

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.

I believe this comes about as a result of IRS Circular 230. Additional guidance on this matter is to be found at the following link: Proposed reqts for 5500 preparers.

No, just 410(b) If you are failing the 401(a)(4) general test with the allocation you want, the answer may vary depending on what the document says. Does your document say the allocation must satisfy 401(a)(4)? From a long discussion of this last year, I gather most documents to not require satisfaction of 401(a)(4). The document we use does require it. An -11(g) amendment can not reduce benefits. The terms of the plan will determine what those protected benefits are.

That's the question.

Welcome to the new ERPA message board. Feel free ask your questions, express your concerns.

Thanks.

Sorry, the terminated employee worked less than 500 hours. Would you have any language for the corrective amendment to make the feature available? And exactly what is the failsafe language that would not make this possible? Thank you.

Do you still have this because I would like to see it.

We are working on the contribution for a new comparability plan (no deferrals) for the 2009 plan year. There are two groups- owners and all other employees. Eligibility is ages 21 and 1 year of service, entry is 1/1 nearest completion of eligibility. Definition of compensation is w-2 for all tests and limits. One of the NHCEs terminated in 09 with less than 500 hours. ABT was passed and so was 401(a)(4) for prior year. Plan passes gateway but not ABT with current NHCEs for 2009. We do have an employee hired 9/08 who would otherwise be excludable because she had not met the 1 year eligibility IF we bring this employee in as of 1/1/09, all tests are passed. Is this Ok and must this person receive credit for 1 year of service as of 12/31/09?

Where can I find these?

No, I am asking if the testing is the same for all types of cafeteria plans.

We are qualified plan TPAs and I have been asked by one of my clients to quote on and/or take over the admin of their 125 plan. Is there any testing other than the Section 125 eligibility test; the Section 125 Key Employee Concentration Test; and the Section 125 Contributions and Benefits Test? Are these also the tersts that are performed on a premium-only plan. Thanks.

I have been in business for the last 28 years, have acquired some plans, and have lost some plans. We all have. Clients move their plan investments all the time. Usually a TPA loses a client because the client is either unhappy with the way the TPA has been handling the business or because of fees. However, over the last six months, I have lost 3 clients for neither of these reasons- these employers were approached by John Hancock agents to move the investments from wherever they were to Hancock and/or Hancock related products. Nothing in and of itself wrong with that. It's just that most reps will ask the employer if they are happy with the TPA services --= these people do not even ask, they sell a bundled product, "go with Hancock and, oh by the way, you have to use our TPA." I got a little suspicious after I lost the first case, but this looks like a pattern. I complained bitterly to one of the regional marketing reps for my area when I lost my third case. He did not see anything ethically wrong with this business practice. Hancock seems to be the only company that condones such practices. I am wondering if anyone else is or has been in the same situation.

I was wondering if there was some sort of a survey as to what people are charging for the restatements. Prototype vs non-prototype and DC vs DB. I've held off doing the majority of my restatements as I do not want to under- or over-price myself out of the market. Is there some sort of a range that people are charging?

Go with Datair, Accudraft is about 5X the cost.

I've been using Datair for over 5 years. Every time I think of switching, I'm amazed at what the other software vendors charge, so I'm sticking with Datair for now.

My client was just asked by their CPA to obtain an engagement letter as the TPA for the plan. The client was also told this is a "requirement". I have been in business for over 25 years and have used an engagement letter once in that time. I have found that most clients will not sign. My engagement is getting my fee up front. If there is a requirement to do a retainer/engagement letter, who is requiring??

Can hardship distribution be take from Employer 401K safe harbor contributions? Document says yes but insurance company says IRS says no and will not allow.

We recently took over a 401(K) plan and the definition of compensation is W-2 Gross (Box 5). The client also sponsors a Section 125 plan. The previous TPA was using W-2 box 5. The plan document states that the ADP/ACP tests shall be based on Gross W-2 w/o reduction for employee deferrals or employee contributions to a 125 plan. Client wants to reduce W-2 by contribution to the 125 plan. Would this be OK??