RRB

Hi, Does a Puerto Rico plan that has its trust in Puerto Rico need to complete form 5330 to report non deductible contributions for return of excess (ROE) contributions after the ROE deadline has passed? If so, is the ROE deadline for the form 5330 that of the US plans, e.g., 2 1/2 months or 6 months (for a plan with a EACA) or is the deadline the Puerto Rico plan deadline, i.e., tax filing deadline. Thanks

Hi, I realize that Puerto Rico plans (non dual qualified plans) are not subject to all the testing requirements under the US regs, e.g., top heavy testing. However, my colleagues and I have not found any indication that PR plans are or are not subject to benefits, rights, and features testing. Does anyone know whether Puerto Rico plans (non dual qualified plans) are subject to BRF testing? Also, does anyone know a good source where I can find an english version of the PR regulations? Thanks for you consideration to these questions.

Hi, I am assuming that a (3 year cliff vesting schedule), (a 20% after 2 years and 100% after 3 years vesting schedule), a (2% after 1 year, 40% after 2 years, and 100% after 3 years vesting schedule), and a (25% after 1 year, 50% after 2 years, and 100% after 3 years vesting schedule) would be considered equivilant such that Benefits Rights and Features testing would not be required. Any thoughts?

Thank you all for your replies. They confirm what we had been thinking.

Hi, My peers and I have had a discussion as to whether a person who sits on a board of directors for a corporation is considered an employee under the defenition of an employee with respect to a qualified retirment plan, e.g. 401(k) plan. Would such a director, if his/her only responsibility to the corporation was to serve on the board, not be considered an employee under a qualified plan and be considered excludable for coverage testing purposes similar to an independent contractor, or would such a director be considered an employee, and if excluded from participation, need to be considered as non excludable for coverage testing? Thanks,

Thanks for your help. Can't seem to find the option for a new posting. Went to Help but didn't seem to help.

Hi, Can the transition rule for coverage testing be applied to both the seller's controlled group and the buyer's controlled group? For example, if the parent of controlled group A (controlled group A is made up of A and subsidiraries 1 and 2 for which each has its own plan) sells one of its subsidiaries to the parent of controlled group B (controlled group B is made up of B and has subsidiaries 3 and 4) in June of 2011, can both controlled goups A and B apply the transition rule to all of the plans in thier respective controlled groups through 12/31/2012? Assume all of the plans have a calendar year plan. I did some research and its clear to me that the buyer can apply the transition rule as long as all of the requirements are met but it is not clear to me that the sellers controlled group may use the transition rule, i.e., in the example above the plans of Parent A and subsidiaries 1 and 2 would not require to resume coverage testing until the 2013 plan year. If the seller is not allowed to consider the transition rule, I assume that the plan that is sold from contolled group A would not have to be taken into account in the coverage testing as of 12/31/2011 for controlled group A since as of that date, the plan was a member of another controlled group. Thanks in advance for you review and reply.

Hi, I'm reviewing a plan for possible Benefits Rights and Features testing with respect to vesting. For the general population, per amendment effective 1/1/07, vesting is a 3 year cliff (0 after 2 years and 100% after 3). Prior to that, vesting was at a 5 year cliff. In addition, the plan had transferred balances for certain populations as of 12/31/2006 which remianed on the old vesting schedules, i.e., 5 year cliff and 6 year graded vesting schedules. Does anyone know if Benefits Rights and Features testing would be applicable for the differences in pre/post 1/1/07 vesting schedules vs. the current vesting schedule (3 year cliff)? I am assuming that since the regs treat the 6 year graded as equivilant to the 3 year cliff, there would not be a BRF test required for that scenario. However, for the 5 year cliff, I am not so confident. Any thoughts, documentation that would assist in my research? For those participant populations mentioned above that went from a 6 year graded to a 3 year cliff, they went to a 3 year cliff where after 2 years they were 20% vested and after 3 years they were 100% vested. I am assuming that this vesting schedule is equivilant to a 3 year cliff where particpants are 0% vested after 2 years and 100% vested after 3 years for purposes of determining whether the pre 1/1/07 vesting, i.e., 6 year graded, is equivilant to the current vesting schedule, i.e., 3 year cliff. Also, since there are currently different vesting schedules for certain populations for active employer contributions, i.e., (0% after 2 years and 100% after 3 years), 20% after 2 years and 100% after 3 years), (20% after 1 year, 40% after 2 Years and 100% after 3 years), and (25% after 1 year, 50% after 2 years, and 100% after 3 Years), it appears that BRF testing would be required unless these deferrent vesting schedules are considered equivilant. However, I have yet to confirm. Does anyone know the answere or can anyone lead me to documentation that can help me with my research? Thanks

Thanks, That did help. RRB.

Thanks, I had read the instructions and that language, to me, does not directly answer my questions. I'm looking for a more direct reference. I will keep looking. RRB

Hi, I'm trying to determine if excess deferrals due to an ADP failure that are recharacterized to catch-up are subject to the 10% employer excise tax penalty. I do not believe so but I could not find any documentation supporting this view. Also, with respect to ACP failures, I have found that non vested match excesses amounts should be included as part of the calculation. However, I am not certain regarding ATM. It seems to me that since ATM is subtracted from the match prior to running the ACP test, it would not be included in the calculation. But again, I cannot find documentation to suppor this. Any assistance would be much appreciated. Thanks, RRB