PFranckowiak

Plan is just over 100 participants and is audited. 30-40 EEs will be moving to a new company - but it is part of a controlled group - same identical ownership. Happening around 10/15. 1. Option 1 would be just to do a participating ER for the Prototype Doc and include all. 2. Option 2 would be to have new plan for the new company that would be identical. Both plans would be under 100 EE's thus avoiding the audit for 2012. Would have to combine testing for coverage. ADP test, top heavy etc. When transferring the 30 EE's to the new plan - would you have to 100% vest or could you just transfer all of their balance over to the idential plan? Anything else I need to worry about? Thanks Pat

How long is everyone keeping plan records? I know it's the ER's ultimate responsibility- but we know how that goes. I think we need to keep all years on plans that we still have, but on plans that have left our services - what do we need to keep? I think we would at a minimum have to keep a copy of the plan documents - Prototype we sponsored. One of my bosses thinks we should just box everything up and give it to the client when they leave. I, however disagree and need to give him more information on why we need to keep it. I guess it's becoming a storage issue. Just wondered what others are doing. We are now scanning stuff, but didn't in the past. I don't want to spend the time scanning stuff we dont' need. Thanks Pat

Takeover Plan (We are getting 10/1) Contributions for weekly payroll still being deposited Monthly - usually by the end of the next month - way late. How far back do they need to go to file VFCP? They were under the understanding they were doing things correctly and are going to change to weekly deposits now. Their prior TPA didn't keep up with regulations. Plan also was not amended for EGTRRA etc. Trying to get this small employer out of a big mess with not a lot of expense. Suggestions appreciated. Pat

Okay these always have twists to them Corbel Prototype 1 year/ age 21/ entry 1/1 and 7/1 Employee "Joe" DOH is 5/11/09 Terminated 12/31/09 Rehire 5/23/10 Initial computation period 5/11/09-5/11/2010 525 hours Switch to Calendar Year 1/1/10-12/31/2010 less than 1000, but over 500 From Date of Rehire 5/23/10-5/23/11 over 1000 hours So if you only use the anniversary date of computation period from Original Date of hire - he might come in on 1/1/12. If you start over as of his rehire date he comes in 7/1/11 So can including past service keep an employee from becoming a participant longer than if someone that was just hired. Bob, Joes friend, was hired 5/23/10 , not rehired, on that date and will come in on 7/1/11. So will Joe and Bob have different entry dates because Joe was a Part time Student Employee in the past I have read past posts that state that you can only use the Anniverary Comutation Period on the Original Date of Hire, but it doesn't seem fair to me that his past service should hurt him. Of course this business is not logical. Thanks for your help Pat

Okay - I have a potential takeover plan - trying to determine what needs to be done. Had a Prototype Document - appears to be up to day prior to EGTRRA Restatement. Did not do EGTRRA restatement or any amendments after that. Since it's a prototype - if it's filed with VCP do we have to also file for a determination letter 0r are we good with just filing for the VCP. I am getting differing opinions on this. Also I assume that the effective date on the documents needs to be the date that it needed to be and then the Client signs with a current date- date he actually signs. Client is small and has eliminated the match due to the economy. Thanks Pat

401(k) Safe Harbor Nonelective Top Heavy Company bought out. Plan terminating 8/31 Participant Compensation Safe Harbor Nonelective made for the 8 months to all eligible. Participant Compensation used for 2 new employees entering 7/1. I know that the Compensation limit needs to be prorated 8/12 * 245000 = 163,333.33 Two questions 1. Do the two EE's that entered mid year have to have additional contributions because the plan is top heavy and the 3% was only on participant compensation? 2. Does the 402(g) limit need to be prorated? 415 Limit? I haven't had a plan termination in years - so just wanted to make sure I didn't need to do 1 or 2 above. Thanks Pat

Okay - I just found out one of our ER's was purchased by another company. It's a Safe-Harbor nonelective Top Heavy What options do they have? Thanks Pat

Okay - I re-read the instructions - See item Line 9 Column c - says enter participant's name EXACTLY as it appears on the participant's social security card. Since I NEVER get a copy of the participant's social security card - this will be hard to monitor. (I am not even sure exactly how my own name appears on my card without looking) I would think that the IRS should have these records and can get the exact name themselves by matching with Social Security Number. Paricipants may have been married by the time we report them. Guess this is just another verbage we cannot exactly follow. What do others do - do you get a copy of the SS card before putting them on the SSA? Pat

I called the IRS today. Nice gentleman explained that he has not heard anything on the EZ form and has been told to tell people to just wait until the form comes out. He has no idea when that will be. Pat

Plan is changing Vendors. They have not yet issued Black out Notice Want to start sending new contributions to new vendor 6/1. Rest of Assets to transfer 7/1 Since the Assets will now be at two vendors that makes it almost impossible to do loans or distributions from the plans. Do they need to wait until 30 days after the black out notice is issued to start the contributions to the new vendor? Thanks Pat

okay the new SSA form is due 7/31, but we cannot extend because we are also waiting for a new extension form to include it - so what are we to do - write SSA on the current avalable form????? Are they going to automatically extend due dates for these or are they going to make us RUSH and get them all done? Have a nice Weekend - going to try to forget about this stuff. Pat

As far as I know we have no EZ forms - and they are due in July. They expect us to file on time when they have had over a year to complete the form. I have not idea what the hold up is. We have clients that want to get them files and all we can do is tell them we are waiting. Then we will have to rush to get everything done. I think they issued the EZ on May 10 or around their last year. I am starting to lose what little patience I had. Pat

Okay - we are now within two 1/2 months of these forms being due. We have no extension form that we can use yet for the 8955, We have clients that will need to sign the forms and may have vacations scheduled. Does anyone think the IRS will extend the due dates of the forms without making us file an extension? Seems to me that they should give us six months from the publish date of the form and extension. I am ready to send in some draft forms!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Frustrated that this will be cutting into summer plans. What is changing in the 5500-EZ that is making the form delayed in being published? Am I missing something here??? Pat

Thanks for you help. I just had to have MORE to prove it to the broker. Pat

I want to make sure I have this correct. Participant retired March 2011. He is 70. (Turns 70.5 in August) RBD 4/1/2012 He wants to do a Rollover to an IRA. I say since is is in the year that he is required to take a RMD, 2011. He must take the RMD first if he takes any distribution in 2011. He wanted to take a partial distsribution now and hold the RMD until 2012. I was thinking if he took any distribution in 2011 the RMD would have to come first, even though RBD is 4/1/2012. The broker says since he is 70, not 70.5 yet - he could rollover the balance to the IRA and then take the RMD from there in April 2012. Thanks - I just need something to go back to the broker with. I have looked up the Q & A and most of those are the person was already 70.5. Thanks Pat

Plan cover only 4 participants. Husband and Wife and two other participants that used to be full time and are now part time due to economy. The two PT participants don't participate and don't have an account balance. So we have the two owners. ONe of which bought an asset in his Self Directed Account that is not valued on a regular basis. Do they still need a bond covering 100% of that asset? Thanks Pat

Okay - I have a situation where the client made the contribution on the 8th day - not the 7th business day. This intest is going to be less than $1.00 as the amounts are not large. Since the 7th day is only a "safe Harbor" What are people doing with the ones that are a day late? Pat

Thanks where I was reading the 3/31 date was on the page of the draft instructions page 1 bottom - EXCEPTION. Pat

Except where you have the final 5500 in 2009 - it said the date didn't change under exception. What about who we have to report? Pat

Ok - did I read correctly on the Draft that while we are STILL in Draft format - the 2009 return is Due 3/31/11???? How can it be due if they have not got around to issuing the form yet. Also if you have a participant that should have been listed as an A on a 2009 form, but has since been paid (would have been a D on the 2010 form) Can you just leave them off of both forms. I could not find anyting in the instructions - of course by the time I read all the stuff that didn't apply - like Missing Children - I am sure that I missed some stuff. Thanks Pat

Yes - noncalendar plan year EE has been in the plan for years, but this plan year only one month before he terminated. EE was on workers compensation for that period and then he terminated. Only pay was workers compensation for the plan year. Union contract dictated he gets the contribution while on workers compensation Never a problem when the EE has some pay during the year. This employee had no pay and got paid out his distribution from the plan. I think he exceeded the 415 limit and we need to try to get the excess deposited back into the plan. Thoughts appreciated. pat

What about the 100% of pay limit. If pay is zero -then wouldn't the limit be zero. To complicate matters - the participant was paid out. It was ER contribution money not 401(k) deferral Pat

Company has a 401(k) plan covering Union Employees The Union Contract dictates the ER contribution by a set formula that $ per week. Employee was on Disability for a month of the plan year and then terminated. He had NO regular compensation - just workers comp. Since he had no pay, the union contract said he gets the ER portion. What about the 415 Limit - he has no pay and a contribution? Pat

You might want to contact one of the Rollover Services and let them do the looking. If you amend the plan to allow for forced distributions under $5,000, if you cannot find them to have them fill out paperwork to get a check to- I think you could force them into an IRA. Most of the Rollover Services have better methods for looking for people and send out the paperwork and if they don't respond, will open an IRA for them. P

Need some help. I need to reply to an attorney - Situation. 1. Participant was thought to be terminated, but in fact went to Part time. Company stopped withholding loan payments. This happend in July. Plan allows participant to make payments by check. 2. Attorney said he had until December 31 to make up the last quarters payments Aug/Sept or the Loan will be indefault. (Plan has 3 month grace period) One of the loans have it's 5 year date 12/4/ 2010. Attorney said if he makes the payments through September - he is making quarterly payments and the grace period would postpone the default until 2011 (better tax year for the participant as he will have less income) My research has come up with the Treasury Regs 72(p) don't really address the problem above. It states that the cure period cannot extend beyond the last day of the calendar quarter following the calendar quarter in which the missed installment payment was due. I found something about the IRA Q&A with ABA on 5/9/2003 that said the IRS says that the Cure (grace) Period can apply to the last loan payment, even if that payment is due at the end of the 5 year period. Anything newer??? Are we okay not defaulting the 5 year loan until 2011??? Pat