R. Butler

Plan sponsor decides today that they want to elimiate the safe harbor match in their clandar year plan. Safe Harbor Notices were provided for 2010 already. I know that generally plan sponsor must give a 30 day notice to eliminate. Is that true even if they want to eliminate prior to the beginning of the plan year? If we can amendment signed by 12/31 can plan sponsor eliminate match effective 01/01 or does it need to 01/31 at this point? Thanks for any guidance.

Plan sponsor contributes too much employer money for 2 participants. I went to the SIMPLE Fix It guide on the IRS website. The suggested correction is to distribute the excess amount & report it on 1099-R issued to the participant indicating 0 as a taxable amount? A couple of questions: 1. Any good argument to have the money returned to the employer rather than the participant? 2. If the money is distributed to the participant, why is the taxable amount 0? Thanks for any guidance.

Never mind on this. Turns out it could possibly satisfy 414(s). I was thinking that such a definition would not be reasonable, but upon further research I have discovered that excluding comp. over a specified dollar amount is considered reasonable. Thanks anyway.

Have a takeover plan. For some reason the plan excludes compensation in excess of $50,000. (Haven't figured out why yet.) The prior tpa used that definition when running the ADP test. I don't see that excluding wages in excess of $50,000 ever satisfies 414(s) & therefore the limitation couldn't be used in the ADP test. Am I missing something? Thanks in advance for any guidance.

I agree, but the participant agrees those are the rules for a traditional 401k but with the roth it is different due to it being after tax dollars… Any help here? Any money in the plan whether it be pre-tax, roth, match, profit sharing, rollover, etc. is subject to the rules of the plan. The Summary Plan Description will address when in-service distributions are allowed.

I think you anwers your own question -- A participant is still working with the company and has not met the age requirmenmt for an in service distribution.

1. Is the S-Corp. a member of a related group? Does she own other businesses? Do you own a business? 2. The funding deadline for employer contributions is the due date of the employer's federal tax return including all valid extensions. 3. I would recommend that you get a tpa. You are asking fairly basic questions. Do you really want to spend the time to learn the applicable rules and regulations?

How old is Son 1? Is either co. A or B a serivce org.?

Might also have a B-org. between medical practice #1 & the management company.

Does the loan program state that loans will become fully due & payable on the occurence of a distributable event? Most plans thta I have seen requiring payroll deduction also include the fully due & payable provision.

Company has laid off several workers with the intention of rehiring, but no guarantees. Any good argument that this is a leave of absence so loan repayments can be suspended? I can make the argument that if their was some certatinty that they would the employees would be rehired, but without the certainty I have difficulty doing that? Thanks for any guidance.

That is my understanding also, but I have read in a few places that plans where participation is voluntary, no contribution is made by the employer, & the employer does not actively sponsor, are not subject to ERISA reporting & disclosure requirements. I m having trouble reconciling for the employer. Thanks

Start with line 14a Reduce by partner's share of rank-&-file contribs. Reduce by §179 deduction Reduce by other 14(a) adjustments Reduce by 1/2 SE tax reduce by partner's share of employer contribs. It is a circular calcualtion.

http://benefitslink.com/boards/index.php?s...c=10321&hl= I think that ERISA does pre-empt state law. I discussed this in a prior thread on the same subject hoping for an explanation to convince me that I was wrong. Not convinced, but I still acquiesse to the majority that you stop the withholding. Seems like a safer approach more than anything.

I don't really do a whole a lot with H&W plans, but have been asked to look at one briefly. Company offers short term diability insurance to employees. Completely voluntary; paid with after-tax dollars via payroll deduction. Is this a welfare plan subject to ERISA? Trying to determine whether 5500's should have been filed. Well over 100 participants. Thanks in advance for any guidance.

We issue the final 5500's once the check is issued. In many cases it could anywhere from 3-6 months before we know that a check has not been cashed. I suppose we could call the investment borkers to verify that checks have actually been cashed, but we don't. We are not concerned about money reverting to the plan sponsor or remaining in trust because we don't request to be issued to a participant in these cases unless we are positive that we know where they live. If for whatever reason the participant doesn't cash a check the money it will escheat to the state.

The prototype plan & trust agreement should address the issue. There should be a section on affiliated & the issue will likely be adressed somewhere in that section.

I posted this on the Corrections board also Employer sponsors a SARSEP. Employer called us recently concerned about several potential issues with their plan. I just want to make sure that I have a firm grasp of possibe repercussions of the potential errors: 1. Document has not been updated since 1993. I think we can correct using VCP. 2. Potentially less than 50% of the employees participated in a given year. If that occurred the employer ceased to be an eligible sponsor. Is the IRS just going to allow the plan sponsor to cease contributions at this point? It seems like that from reviewing Rev. Proc. 2008-50. 3. Potentially the plan could have failed the deferral percentage test in any number of years. Under VCP employer should be able to correct in any such error by making nonelective contributions for any such and adjusting for earnings. 4. Potentially employees may not have been provided with an opportunity to participate. Under VCP this requires nonelective contributions adjusted for earnings. 5. Potentially excess contributions (elective deferrals) could have been made. Under VCP this requires refunds adjusted for earnings. Am I grasping this correctly; particularly point #2? As I research further I find a lot of information indicating that after the point at which they failed the 50% test, all contirbuions would need to be distributed. So if they failed the 50% test in 1998, all contributionsfor 1998 & beyond would needd to be distributed. Is that correct? I do not see that mentioned in Rev. Proc. 2008-50, but maybe I am missing it. Thanks in advance for any guidance

Employer sponsors a SARSEP. Employer called us recently concerned about several potential issues with their plan. I just want to make sure that I have a firm grasp of possibe repercussions of the potential errors: 1. Document has not been updated since 1993. I think we can correct using VCP. 2. Potentially less than 50% of the employees participated in a given year. If that occurred the employer ceased to be an eligible sponsor. Is the IRS just going to allow the plan sponsor to cease contributions at this point? It seems like that from reviewing Rev. Proc. 2008-50. 3. Potentially the plan could have failed the deferral percentage test in any number of years. Under VCP employer should be able to correct in any such error by making nonelective contributions for any such and adjusting for earnings. 4. Potentially employees may not have been provided with an opportunity to participate. Under VCP this requires nonelective contributions adjusted for earnings. 5. Potentially excess contributions (elective deferrals) could have been made. Under VCP this requires refunds adjusted for earnings. Am I grasping this correctly; particularly point #2? Thanks in advance for any guidance.

That explains why I have not seen it. We don't want to pay Corbel more. Thanks

We use Relius Documents. Where do I find that notice? I've never seen it. Thanks

Can you simply start at the 6% & stay there or would you still have to increase until you got to the 10%? I know that if you start at 3% you can stop at 6%. For whatever reason I thought that if you started at a higher percentage you would still have to increase, but you could never exceed 10%. Thanks for any guidance.

Plan sponsor is trying to terminate a 403(b) plan. Plan sponsor is having difficulty getting forms back from a few participants. Under the regs. It is my understanding that the regs provide that the employer can notify the participant that the plan is terminating & that as of a specified date the contract will be treated as distributed. Two questions: 1. Is that a correct understanding of the regs? 2. If I am reading the regs correctly, but the vendor won't do it, is the plan sponsor SOL or are there other options? They want to get this done before year end to avoid the plan document. Thanks in advance for any guidance.

No need to reply. I found where the Adoption Agreement does provide for immediate entry for prevailing wage.

We have taken over 2 plans with prevailing wage provisions recently. Both plans use a Corbel prototype. Both plans require 21 & 1 for entry to nonelective profit sharing. The prevailing wage provisions are generally covered under the nonelective profit sharing in the Corbel prortotype. Both plans in practice are allowing immediate entry for previaling wage. It seems to me that in the Corbel prototpye that the document should provide for immediate entryin the nonelective profit sharing. I've looked through the underlying prototype plan & trust & I don't see anything in there that allows the plan to have different entry requirements for the profit sharing & the prevailing wage. If someone familiar with the Corbel prototpye could provide guidance I would appreciate it. Thanks in advance.