shERPA

Wow, it's gotten worse. It now totally locks up my browsers. I've tried it in both IE and Firefox.

I had not used the new edition yet until I saw this message. I agree, it does not make a good first impression.

401(k) and 401(m) are mandatorily disaggregated for coverage. This is why you can have something like immediate (k) eligibility and 21/12/1000 for match. If the plan says those under 20 hrs don't get match, they aren't eligible for match. IRS doesn't allow service-based exclusions except what is in 410(a).

I wouldn't. How is this different than saying "part time" employees are excluded from the match. It is an additional service-based requirement that is above and beyond that permitted in 410(a).

I agree the "leasing organization" needs to be a third party. Put the emphasis on "any OTHER person". the "other" implies a third party, IMO.

To be a leased employee, doesn't there need to be a "leasing organization" per 414(n)(2)(A)?

I wouldn't bet the ranch on it. Under 408(p)(2)(D)(i) the code refers to a "qualified plan with respect to which contributions were made...for service in any year in the period beginning with the year such arrangement [the SIMPLE] become effective..." Seems like in your situation contributions were made, so if the SIMPLE were effective in 2012 it would run afoul of this.

Full premium, IMO. Otherwise why would there be a different limit (25%) for term vs. a 50% limit for whole life. The assumption is 1/2 the WL premium goes to CV. If it was calculated on the cost of insurance only there would be just one limit regardless of policy type.

Exactly. Talk about micro-management. Sheesh!

Seems to me the bankruptcy trustee should be getting some legal advice on the plan/ERISA side. There may be some resources available to fund the contribution, who decides how any available resources are parceled out? Does a required plan contribution come before other creditors? Is the bankruptcy trustee making fiduciary decisions with respect to the plan? Lots of questions, maybe some answers. Companies with plans have gone bankrupt before, may be some applicable precedents out there.

Once you get to a certain size you need to structure your company such that you have an advancement path so that you can grow your own. We've have new employees hired for clerical and trust accounting grow into full administrators if they have the aptitude and the interest. My two very strong DB/DC administrators came up this way.

Since the participant is past NRA, presumably any post-retirement death benefit would be part of the retirement benefit under 415. Under 415 a plan can provide a life annuity or a J&S unreduced, but other forms of benefit must be adjusted to the actuarial equivalent of the life annuity. For example a life/10cc benefit would have to be reduced to the actuarial equivalent of a life annuity for 415 purposes because the 10cc is a form of death benefit. So, I think one would have to look at the participant's 415 limit and determine the actuarial value of the post-retirement death benefit and limit it accordingly. Don't see a non-discrimination issue if the plan is providing an enhanced death benefit for NHCEs only. I don't think but have not researched if such a benefit would have to separately satisfy (a)(26).

Yes, what Quicksilver said.

I was not at the LA Benefits Conference, but understand IRS personnel there announced they would be coming out with a DFVC program for EZs "very soon", and for the first year under the program there would be no penalty for late filed EZs.

All good comments. But unfortunately many of our clients view our work as "paper shuffling". We know the complexity and the consequences of getting it wrong, but they don't, and in many cases it doesn't matter. IRS can audit only so many plans. The challenge to us is (1) how to present our services in a way that differentiates them from paper shuffling, and (2) how to convince prospective clients that they would be ill-served by a low cost paper shuffler? I met and discussed offshoring with a representative of one of the offshore operations several years ago. No matter what question I asked, such as "do you have XXX's software?", "can you do trust accounting?", "can you generate electricity from nuclear cold fusion?" was answered with "no problem, we can do everything". Not very confidence inspiring.

Precisely why those of us who earned our QPAs the "old fashioned way" are so annoyed that ASPPA is automatically awarding them to all the ERPAs! Agree, I also did it the old fashioned way. The ERPA program is clearly a shortcut to a QPA. Don't really know how the ERPA tests are scored, but given the few DB-specific questions, I imagine one could pass ERPA knowing nothing about DB's other than how to spell "DB". That's unfortunate, as DB knowledge should be required for anyone to hold a Qualified PENSION Administrator designation.

You get a gold star today!

Depends on where you are experience-wise. When I took the test I'd been doing this work exclusively for almost 30 years. I reviewed the sample tests from AIRE primarily. A friend went to a Sungard program and had their examples as well which I reviewed. I found the actual test to be much like the samples from AIRE and the Sungard questions to be more complex than both the AIRE samples and the actual tests. YMMV of course. Good luck.

Can't really compare profit margins without defining owners' compensation and benefits/perks. Need to assign some "reasonable" value for this based on the work the owners do as employees. Once you do this, then 20% should be a minimum target. If not at least this much, why take on the headaches and the risk?

A variation on this theme. SIMPLE IRA plan sponsor is considering a 401(k) for 2012, they will probably get it going in the 2nd quarter of 2012 just because they have a lot of other things going on to deal with first. So they have notified ees there will be no SIMPLE for next year and the (k) should be starting. They have asked me if for some reason they decide next year not to go thru with the 401(k), can they restart or set up a new SIMPLE IRA for 2012?

Bump

Law firm, two partners, each funding their own SEP to $49K every year. Two NHCE employees, both with more than 3 years of employment, never received SEP contributions. The are looking at a DB plan now and in asking my questions this came up. I've informed them that their SEPs have issues, they want to know the risk/consequences. Obviously the deductions for prior years are at risk and they should correct this, but they've been around long enough to know the probability of IRS finding this is virtually nil. What about the employees? Do they have a claim for benefits and earnings? SEP document obviously provides that employees are covered. Seems like SEPs would be included in the ERISA definition of an employer plan for benefits, even though the funds end up in IRAs, does ERISA apply or does something else give them a cause of action? Of course the SEPs may never have been established by the partnership, that's another issue.

Doesn't an MP run into the NRA 62 issue unless an earlier age can be justified based on industry, etc.?

Most of us are aware of the IRS opinion that an allocation method cannot be changed once the criteria for allocation are satisfied, but have they issued any formal written guidance on this? I recall RR 79-237 that allowed an MP to be amended prior the the allocation date regardless of 1,000 hours or last day requirement, which is sort of on point. Any other written guidance on this?

Plan sponsor adopted plan in 2005. Did not report all employees to TPA, did not fully deposit all deferrals. Plan went top heavy in 2008, sponsor has not contributed TH minimums to date. TPA finally gets all the information, revises ADP tests, calculates VCP correction amounts, TH amounts, delinquent deferrals, with earnings, etc. Total tab to correct under VCP is about $100K. Sponsor refuses to make corrections and directs TPA to terminate the plan. TPA chose to resign because: 1. it won't knowingly prepare an incorrect 5500, and without restoring plan assets, the 5500 cannot be zeroed out. 2. 1099-Rs and distribution paperwork that represents distributions to be eligible for rollover when the plan is known to be out of compliance would be incorrect. 3 participants have a claim to benefits under the terms of the plan, TPA doesn't want to be associated with this. Individual (who is an ERPA) who made the decision to resign is getting push back from various parties, but cannot see any way to help the client terminate the plan without some reasonable efforts made to correct known defects. What, if anything, can a circular 230 practitioner do for this client to get the plan terminated?