Gary

THANKS KING.

I posted this on ira site too to my knowledge a roth ira cannot be rolled into a defined benefit plan (or a profit sharing plan for that matter). Is that correct? I realize it makes no sense to roll a roth into a qual plan but some people seem to think it is a good idea to roll into a qual plan for protection against crediters. thanks

Yeah there seems to be no rules re: a Roth IRA being rolled over anywhere except to another Roth IRA. All kinds of ways to roll over, transfer, convert TO a Roth, but not the reverse. Of course once you have a Roth there really isn't any incentive to move it.

say we have a non erisa 401k profit sharing plan where only a husband and wife participate. say the plan is self directed non 404 c plan. say each participant defers 16k for 2010 for a total of 32k in plan. say they want to make an investment where they loan a non interested party 30k with say a 5 year terms with interest and principle, much like a plan loan to a participant. Since it is a self directed plan i presume this could be accomplished if each participant agrees to loan 15k to the unrelated party. If it were non self directed i presume plan could just write a 30k note. is this a reasonable investment/transaction? I see no problem with it. Thanks.

to my knowledge a roth ira cannot be rolled into a defined benefit plan (or a profit sharing plan for that matter). Is that correct? I realize it makes no sense to roll a roth into a qual plan but some people seem to think it is a good idea to roll into a qual plan for protection against crediters. thanks

So if I'm not mistaken this return can in fact be completed on the computer and then printed and delivered to IRS? thanks

I have a one participant plan who is not eligible for 5500SF for 2009 and of course not permitted to f ile 5500 for 2009 so a 5500EZ is required. I don't have a form 5500 software program so my understanding is that I need to contact the IRS and have them deliver paper copies of form 5500ez. If I am not mistaken I would have to either hand write or type to complete 5500ez, i.e. I can't complete it on the computer. Is that correct? Is it really that primitive? If so it feels like 1968. Perhaps I should light up a cigarrette when completing the return too ;-). Thanks.

The plan and trust are one document. I'll see if there is provision on whether or not both have to sign. Thanks.

A volume submitter plan generates a plan document signature page where a representative of the employer/plan sponsor is listed to sign the plan (eg. an officer of the employer) and the trustee is listed to sign the plan. If the plan has two trustees (say a husband and wife) do both trustees have to sign plan or is one sufficient? Thanks

If a plan sponsor does not restate plan by 4/30 does that mean the plan loses its qualified status? Or atleast have to go through VCP corrections program? What would happen if plan restated in May and is then submitted to IRS in May? What would happen if plan restated before 4/30 and submitted to IRS after 4/30? If plan not submitted by 4/30 is it pointless to submit and better off not being submitted to IRS? Thanks.

say a plan sponsor signs a new 401k plan in april 2010 and does not submit for det letter until may 2010 does the IRS say that plan cannot be corrected for a plan document defect or is there some sort of relief for a new plan? Thanks.

Say we have a db plan (i suppose a 401k plan applies to) with 5 active participants (1 owner and 4 common law employees). Situation 1 If 95% or more of plan assets are qualified assets than no IQPA audit required. However, my undersatanding is that an ERISA bond for 10% of assets is required (assume less than 500k) and s/b renewed or increased each year. So if at then end of 2008 plan assets were 100k the fiduciary ahndling the money would obtain coverage for 10k. And if at end of 2009 assets are 150k the fiduciary would increase bond to 15k. My understanding is that one of the approved surety companies can assist with the details and implementation. Is this understanding correct? Situation 2 Say a plan has 200k in assets and invests 100k of such assets in private real estate and the other 100k is invested in qualified plan assets. Once again the ERISA requirement is to purchase a bond for 20k coverage. However, the plan would be required to engage an IQPA. Alternatively, if a bond for 100k was purchased than the plan would not be required to engage an IQPA. Is this understanding correct? Specifically a plan sponsor is purchasing a pension investment in a private company for $1,000,000. So my understanding is that a bond for $1 million is necessary to avoid the audit requirement. Is that correct? If an IQPA is required does anyone have suggestions as to where to go for this assistance? Thank you.

So one idea is to contact IRS and ask that the current submission be tossed out and that we intend to file a new submission at a later time w eff date of 1/1/10. IRS not accepting volume submitter GUST plans anymore so we would wait until EGTRRA plan approved and submit that. Not a bad idea. Other views appreciated too. Thanks.

A plan sponsor signed a plan in late december for 1/1/09 effective date. Just a few employees in plan who only get 0.5% accrual and an owner. The plan was submitted to IRS for dl. Sponsor now says he wants plan effective 1/1/10 and just redo dates and he will sign now. What do we tell IRS agent? Anyone experience this? This is on basis that employees won't have a problem and the plan will provide benefit service at least as far back as 1/1/09 so no impact on their pension. Thanks.

Looking at 414(b) again it says that the deduction is allocated to each employer in accordance with regulations prescribed by the Secretary. Are there regs that specify how it should be allocated? Are two entities in the same controlled group considered "multiple employers" for purposes of 412 and 404? If the two entities are considered one employer period; than what is a reasonable and prudent way to allocate deductions? The separate employer method seems to be conservative and perhaps a safe harbor. Thanks.

A husband and wife own two small companies. Both companies sponsor the same pension plan. Regarding allocation under 404. My understanding from 414(b) is that each employer is treated as a separate employer re: allocation of deduction. Any other views or does that cover it? Thanks.

A 401k profit sharing is drafted such that each participant (of a plan with say 5 participants) gets its own allocation group. So after the plan year the employer decides on an allocation formula for each participant that meets the non discrimination rules. Once this is decided is the provision incorporated by means of an amendment for that plan year and then another amendment the next year and so on for each year's allocation rates? Thanks.

This has been a bit of a pet peeve for me. I generally work with clients that have about 10 employees (when they have employees). They frequently implement a safe harbor (3% non elective) 401k profit sharing plan. If the plan sponsor wants to invest than the employees are not relevant and the company invests how they choose and pays out benefits upon termination. Not a problem, though few plan sponsors choose this route as they typically want some or all of the investments self directed. With that said they look to me for guidance on the set up. My understanding is that there are many rules to adhere to for the plan to have 404c protection and perhaps not a necessary feature. So where do I direct them for self directed plan? 1) One idea I have is to have them set up individual sub accounts with Schwab where each participant invests in his own brokerage account in whatever he wants. 2) Another method I believe is to have the sponsor work with a broker at some financial institution where they establish a menu of reasonable and prudent investment options for each participant and they each have access on line to their own account. The clients I have just want something simple to work with and understand. I don't have to suggest anything complex and extremely custom made. Just something to get them started. So in conclusion based on the two methods I mention above and my goals, does anyone have suggestions on how to implement what I am trying to do? The more specific re: procedures the better. I want to establish a comfotable procedure for implementing these plans. Thanks.

I agree with the comments in the post, but I still haven't gotten a response to the "consequences" to plan sponsor for not having a val and schedule sb. Assuming no funding deficiency my guess is an IRS audit would result in either taxes and penalties or plan disqualification all together, but that is my guess. Thanks.

A company sponsors a one participant/owner pension plan. The sponsor wants to contribute $0 for 2009. If a valuation were performed a $0 minimum funding requirement is certain to be achieved. However, plan sponsor does not want to pay for val or schedule sb. The plan has less than 250k so no 5500EZ required. A valuation and schedule sb is required to be furnished to sponsor, but of course sponsor does not want to spend money for it. What are the consequences? It's not a funding deficiency excise tax because if a funding were computed it would be $0. Is this grounds for IRS plan disqualification? What else? Thanks.

I agree it's an excess loan and a disqualifying event, but why wouldn't it also be a PT? Is that because a disqualifying event would just trump the PT? If not a dq than it would have to be a PT right? Thanks.

Form 5330 instructs a filer to calculate the excise tax for a PT using Schedule C FOrm 5330. Schedule C has a column called "Amount involved in pt" It seems this amount is based on the amount for the use of the money. So for example say a employer or owner of company takes $20,000 out of his one participant pension plan. We'll assume it is all a PT since he already took a maximum loan of 50k. Say he takes $20,000 from plan on 1/1/09. When completing the Schedule C form 5330 what is "Amount involved in pt"? It seems that it is not the $20,000 but the amount or value for the use of the $20,000 for the year. What would that be? What interest rate should be used? If an interest rate of 0 is used than there amount involved is $0. Any comments? Thanks.

Yes NRA amended to 62.

A DB plan was terminated in summer 2009. Is it reasonable to apply for dl letter now? Assets were distributed in 2009 and plan was a one participant plan not covered by PBGC. Thanks.

I was informed that a one participant plan sponsor has a private investment in a REIT. The owner/participant terminated plan and wants to receive distribution in-kind so as not to sell investment at a low price. He is being todl that since it is a private investment it must be liquidated. Anyone know that to be accurate statement? Thanks.