PFranckowiak

Call the DOL. They might be able to help Certainly can get to them faster. Pat

Company A has a Simple IRA. Company A owners bought assets only of Company B who had a 401(k) Plan that was not part of the assets purchased/ Can a Simple plan be set up 10/1/10 for Company B with immediate eligiblity (Company A is not immediate)? How do the limits work between what they contributed in the 401(k) and if they can have a Simple IRA? Any same desk rule????? Thanks Pat

It depends on how your plan document is written. We have two - one stated that they came in immediately, the other - they waited until the next entry date. It was specific in the plan document. Written purposely so it was easy to determine. Pat

ER stock is an option as well as some Mutual Funds. EE's also have the option of setting up a self directed brokerage account. Thanks Pat

I posted on the 5500 site and got no reponse. Maybe someone here has the solution. Do we need a bond that exceeds the ER Stock? Question realates to Small Plan Audit and Bonding. I have a plan that has employer stock as an OPTION. We are filing a 5500 and Schedule I. I am wondering about the required bonding. The employe stock is over 5% of the plan assets. Employer stock is not traded. (small company) I don't understand the Qualifying Employer Securities below. I looked up the sight and I still am confused. Do they need a bond covering the entire amount of the Employer Stock to get out of the Small Plan Audit Requirements? Thanks Pat I"n the case of an individual account plan, any assets in the individual account of a participant or beneficiary over which the participant or beneficiary has the opportunity to exercise control and with respect to which the participant or beneficiary is furnished, at least annually, a statement from a regulated financial institution referred to above describing the assets held or issued by the institution and the amount of such assets; Qualifying employer securities, as defined in ERISA section 407(d)(5); "

Question realates to Small Plan Audit and Bonding. I have a plan that has employer stock as an OPTION. We are filing a 5500 and Schedule I. I am wondering abou the required bonding. The employe stock is over 5% of the plan assets. Employer stock is not traded. (small company) I don't understand the Qualifying Employer Securities below. I looked up the sight and I still am confused. Do they need a bond covering the entire amount of the Employer Stock to get out of the Small Plan Audit Requirements? Thanks Pat I"n the case of an individual account plan, any assets in the individual account of a participant or beneficiary over which the participant or beneficiary has the opportunity to exercise control and with respect to which the participant or beneficiary is furnished, at least annually, a statement from a regulated financial institution referred to above describing the assets held or issued by the institution and the amount of such assets; Qualifying employer securities, as defined in ERISA section 407(d)(5); "

Have a 401(k) Plan with a Profit Sharing Accont (no match) Joe terminated was paid his deferral, but was 0% vested in his PS account balance. Joe came back to work after being gone about a year. According to the document he comes back in as of date of rehire and want to have his forfeited PS account reinstated. 1. The plan document states that he has to repay his entire vested balance. I assume that this includes his deferral. 2. If he repays his deferral, I assume again this is after tax money. Putting it into his deferral account, once he terminates again - this money would then be taxed again???? Seems like if the above is true, he should wait until he is vested before he repays the 401(k) money due to the double taxation. I have been doing 401(k) plans a long time and have never had anyone want to repay their balance. (I can see why he might want to as the PS was large enough to want to get, I just would wait as he has five years to do it. (Vesting is 3% cliff) What do the rest of you think??? Thanks for your help. Pat

I have a controlled group that has had two of the companies fold due to the economy. I still have a few people that have not taken their distribution yet and they are over $5000. When do I remove the controlled group member from the plan document as a participating employer? The companies themselves will be shut down soon now that the rest of the people have just been let go. Suggestions appreciated. Thanks Pat

Had one of our people go to a seminar in Jacksonville last week. They were told calls were VERY backlogged. We are just putting everyone on extension for now and hopeing that is all gets cleared up soon. Pat

I have read the instructions, called DOL - were nice but just told me to read the instructions or call the IRS on EZ questions, Was on hold with the IRS for over 1/2 hour and gave up. Situation. Controlled Group Both companies covered under one plan. Both companies have one EE each - husband in one, wife in other. Can I file an EZ? I think the controled group issue that I had before went away. Any ideas? Pat

Having he come back in on the rehire date meet what someone else said that isn't on the list - "A year of service is an eligibility computation period in which 1000 hours are worked. The first eligibility computation period is always the 12 month period begininng on the date of initial hire. 12 months after hire the employee was credited with a year of service. He would have come in on 1/1/2010, but was on employeed, so the individual becomes an employee on date of rehire. I am going to a 401(k) seminar next week, so I will see what the speaker says. I appreciate all the input. I think he does come back in on rehire, but the client I guess wants him not to come in and my boss is trying to have me provide some "proof" Thanks again. Pat

I had what I thought was a simple eligibility question. My boss and I disagree on the answer. I have looked the answer up in various locations and have different interpretations. I would appreciate any thoughts and references. Corbel Prototype Calendar year plan. Switches to Calendar year for svc, 1 year svc. 1/1 7/1 entry dates. Hired 8/15/08 Terminated 4/15/09 rehired 4/21/2010 1st computation Period 8/15/08-8/15/09 over 1000 hours, but did not complete 12 months of service. 2009 worked less than 500 hours Was gone over 12 months. I have read the document and I am looking at sections that say "rehired Eligible Employee who satisfied eligibility" He satisfied the 1000 hour requirement, but not the 12 months or doesn't that matter. The other section said Rehired Employee who had not satisfied eligibility. Would appreciate opinions. Eligibility is getting more complicated these days with lay offs and rehires. Thanks for your help Pat

I don't know of any discussions regarding using this small compensation. I was surprised when I got the copy of the w-2 in my hands. It makes a huge difference in the ADP test. Is there any problems if we don't count it are require the owners son to take out more money? I was wondering if they wrote him a check for the .01? Definitely probabaly didn't withhold anything. Thanks for all your help. I appreaciate being able to bounce this stuff off others. Pat

In MI - economy and business down. Owner's son deferred a lot Owner did not take a paycheck, but worked, Got a W-2 for .01. Yes a penny!!!!!!!!!!!!!!!!!!!!! If no compensation I know I leave him off the test and it fails big time( Son has to take out more than he put in due to Interest) If I can use the .01 and have dad in the test, it will help I am, however, not comfortable with the penny for compensation. I have asked for a copy of the W-2. I cannot believe that they issued it. Got it they did do a W-2 for a penny. Anyone EVER had anything like this or have any suggestions. What is the minimum compensation that you think someone has to have to be in the test. I am leaning toward leaving him out. Thanks for your help. Pat

A company laid off workers in Dec 2008. They have a policy that is the employee is not rehired within 90 days they are considered terminated and give a termination date at that time. I have about 10 partipants that are in this state. They have March 2009 termination dates, no hours, no compensation for 2009. Since they could not defer since they didn't work, can I keep them out of the test or do I have to put in with zero compensation? Thanks Pat

A company laid off workers in Dec 2008. They have a policy that is the employee is not rehired within 90 days they are considered terminated and give a termination date at that time. I have about 10 partipants that are in this state. They have March 2009 termination dates, no hours, no compensation for 2009. Since they could not defer since they didn't work, can I keep them out of the test or do I have to put in with zero compensation? Thanks Pat

Thanks - clearer than it was. I need to find out more information and this gives me clearer questions to ask. I am dealing with several trusts in this situation, so unclear what estate planning was done and I just will have to ask more questions. Again thanks for your response. Pat

I have a company where Mr. A. has put his ownership 75% into a Trust for his 5 children. Nonrelated person owns other 25%. I know Mr. A's Children are considered HCE by attribution as they are benficiaries of the Trust. The Children's spouses are not considered HCE. What about the Grandchildren? They don't have any direct ownership and their parents don't have any direct ownership. I know that the 318 rules don't pass the direct ownership down to the Grandchildren. I know that the Trust attributes ownership to the Beneficiaries prorata. I am not sure that the Trust changes anything as far as the Grandchildren are concerned, unless thay are named in the trust as a direct beneficiary, not a contingent. Do I have to find out who the direct beneficiaries of the trust are and make sure that the Grandchildren are not beneficiaries? Need for HCE determination. (Have owner, children, children's spouses and Grandchildren all working for the company) Any thoughts? Am I missing something here? Thanks for your help. Pat

I have a controlled group of 11 companies. Two of the companies are closing due to economic conditions. 1. If we are under the 20% Partial Plan termination and we don't 100% vest. What happens to the forfeiture that originally went to reduce the contribution for that particiular ER? 2. If they are under 20% and the client wants to 100% vest the people affected what discrimination issues are we dealing with. (There aren't that many nonvested EE's) Client thinks this would be easier than trying to determine the 20% threshold. Any suggestions are appreciated. Pat

The ER we are working with is the Primary Sponsor. There was another unrelated company that was a prior participant, but left in 2005. As far as I can get with the information , there is not currently another ER that participates. 1. Since it's on a VS Document that says Muliple employer Plan, I take it we can just restate under our Single ER prototype? Any problems with doing so? Am I restating or do I have to first terminate the Mutiple Employer Plan and transfer the assets?? 2. If I can just restate - do I just then change the EIN number to 001 or 002?? What other questions should I be asking relating to changing the Multiple Employer Plan to a Single Employer Plan? Thanks Pat

Thanks - I don't think that this employer is the PRimary Sponsor - just one of the participating ER's, but I will find out for sure and then I might have some more questions. Pat

Takeover Plan. Document from Insurance company says Multiple Employer Plan. 5500 Filed as a Multiple Employer Plan, but had the name of the ER that we are working with listed as the ER What do I have to do to Make it a Single ER Plan? What about the weird Plan number 333 - does it have to change to 001? Looks like the Adoption Agreement was set for this particiular Employer. I don't know much else except it was done by an Insurance Company. What do I need to look for to change this over to an regular 401(k) Appreciate any insight and where to look for answers. Thanks Pat

Since the owner will still be employed, there might be an advantage to keep the plan in place until year end, to allow him to defer for the entire year. All the other employees will be terminating. Is this a possibility or am I missing something. Thanks for your input P

No sale of assets. Owner will be getting commission from the continued clients. Owner will not be Employee of new company, but will be maintaining the same office etc. From my understanding the employees will be employees of the new company and the customers will be billed by the larger company with the owner getting paid like a broker based on the amount billed. I don't think there is any intention of takiing over the plan or a merger etc. All employees are already 100% vested as it's a Safe Harbor only plan. Thx P

I have a Safe Harbor Match Plan. The ER is terminating all the employees. The employees will then become employees of another company that the owner has no ownership in. The owner will remain as a consultant/broker and will not be an employee of the larger company. 1. Since the employees are being terminated is there any notice required? 2. Plan will fail testing if it terminated now - can they keep the plan in place through the end of the year with the owner being the only employee and getting the SH match to year end and then terminate the Plan. 3. Employees will be doing the same job that they were = but will be filling out applications and will become employees of this larger company. The preious owner will be providing space for the employees. I do believe that the larger company does offer a plan. Anything I am missing here? Plan is updated for EGTRRA and PPA. Thanks Pat