JanetM

See rev proc 2006-27

Balances attributable to participant directed assets are not included in the 5% transaction report. The participants in essence elected the option of letting the Insuarance company do the transaction rather than take the time to initiate it themselves. By not doing something differecnt they elected to move to funds indicated by the mapping notice.

You never want to be the last man standing.

Regulations allow under 401(k)(2)(forget the rest) for hardship from all sources. Would be up to the sponsor to decide which way to go. Back when I did TPA work I had PS plans that had this. Regular group of employees would skip the Oct, Nov, Dec house payments and go Christmas shopping then take distribution to catch up in January. In my view it opens up the door to free money that many can't resist.

If nothing specifically prohibits continued loan payments via coupon after termination or requires immediate payoff then you have the flexibility to allow. Tricky part is making sure EVERYONE is treated exactly the same. What ever you decide to, incorporate the details in the loan policy.

You must have lazy auditors. We require proof age and SSN before any payments - lump sum or annuity.

Distribute the assets until count is zero and file final 5500.

CEBS is good training. ifebp.org is the site

To add to Masteffs post. Ensure the POA does cover this. I have seen some that are limited to endorsing checks and writing checks to pay bill, but not to open or close any accounts.

OP said participant not in the military. If POA is designated as having authority for act on behalf of participant for financial matters why question it. If participant terminated employment to work for govt contractor you have distributable event. Does the plan have language that describes POA policy?

Unless there is other plan language that says those on LOA can't participate then the salary folks getting paid by the company can defer. Hourly paid by 3rd party can not.

I agree with Bird. Get an audit done. If you try and skip this year the process will be more painful next year when the auditors insist on looking at 2009 and 2008.

The beginning.

Yes it does. We actually started doing SAS112 last year on all out plans.

David, what a moral buster for the participant who enters on 7/01 is what I meant. Plan has vesting schedule that was applicable to all, but now it only apply to the new guy/gal. What a way to promote loyalty and hard work.

From the AICPA. There are lots of articles if you google "sas 112". Understanding SAS No. 112 By Charles E. Landes, CPA In an effort to help practitioners better understand and implement the requirements of Statement on Auditing Standards (SAS) No. 112, Communicating Internal Control Related Matters Identified in an Audit, the AICPA staff has developed an Audit Risk Alert entitled Understanding SAS No. 112 and Evaluating Control Deficiencies: A Companion to SAS No. 112, Communicating Internal Control Related Matters Identified in an Audit. This Audit Risk Alert summarizes the important aspects of the new standard and presents a number of short case studies designed to guide the auditor though the process of evaluating identified control deficiencies. To obtain this new risk alert go to: https://www.cpa2biz.com/stores/sas112. During this summer and fall, the Audit & Attest Team has become aware that some practitioners may be misunderstanding certain concepts that are important to SAS No. 112. The most common misunderstanding is the belief that the auditor’s drafting of the client’s financial statements automatically results in a material weakness. Asking the auditor to draft the financial statements does not cause a control deficiency; however, it may be the result of a control deficiency. A control deficiency exists if the client does not have controls over the preparation of the financial statements, including the footnote disclosures, which would prevent or detect a misstatement in the financial statements. This misunderstanding and others are debunked in the Audit Risk Alert. The following are some key underlying concepts that will help in successfully implementing SAS No. 112: · The auditor cannot be part of a client’s internal control. Becoming part of a client’s internal control impairs the auditor’s independence. · What the auditor does is independent of the client’s internal control over financial reporting. Therefore, the auditor cannot be a compensating control for the client. · The client’s designation of an individual who possesses suitable skill, knowledge, and/or experience to oversee a service performed by the CPA (Ethics Interpretation 101-3 Performance of Nonattest Services) is not a control. Therefore, having such a designated person does not mean that the client does not have a control deficiency. · SAS No. 112 does not require the auditor to search for control deficiencies, but rather to evaluate them if they have been identified. · A system of internal control over financial reporting does not stop at the general ledger; rather it includes controls over the preparation of the financial statements. · To properly apply SAS No. 112 the auditor has to have a working knowledge of the COSO framework. COSO’s Internal Control-Integrated Framework describes the elements of internal control over financial reporting. SAS No. 112 directs the auditor to evaluate control deficiencies when identified, and communicate certain deficiencies to management and those charged with governance. Keeping these simple but important underlying concepts in mind will help auditors successfully implement the new Standard.

Reimursements would begin when you became participant. Was there a waiting period or were considered covered from first day of employment? If plan has 30 day waiting - maybe to coincide with you actually getting a check if employer pays arrears - you entered Plan the end of Feb. Sorry I know that isn't what you wanted to see. QDRO reminded you there is still special tax treatment for the two months.

Keep it simple. The testing part is split out by money type - pre tax, after tax, match, safe harbor, profit sharing. Coverage test for deferrals are tested such that if you are eligible - even if you don't make any - meaning if you have immediate entry you always have 100% coverage. For the other types - you can exclude those under 21 with less than year of service. If plan is SH you get free pass on ADP (and ACP if you don't allow after tax contributions)

Since the person who would enter on 7/01/08 would not have earned a right to enter the plan until after 6/30 is over. If the plan is amended before 6/30 then the participant will follow eligibility of plan as it is written on 7/01. I agree with John that this smells bad. If this is small company that thinks it will grow in the future - vest all those employeed and treat new hires different. Seems to be slap to NHCE who must know about the plan to change it like this. You WILL have to give out SMM so it will be noticed.

Ask the auditor to show you where in the AICPA audit guide does it say that the TPA must have SAS70.

I don't ever recall them being treated differently. No rollover and taxable to participant with possible penalty. IRC 402©(4)©

CCH online has- Journal of Deferred Comp Journal of Pension Benefits Journal of Pension Planning & Compliance Sounds like you are looking for more indepth detail then the pubs normally publish. Try ASPPA or CEBS pubs instead.

My understanding is you only file the 8905 with IRS if you are also submitting for your own determination letter. If you are simply relying on the M&P or VS letter you just have to keep to keep in on file. If you signed form intending to adopt the XXZ plan but never adopted it, and then moved to new provider and adopted the ABC. I would just keep the NOP, and ABC forms to show the continuity.

I agree with you for the 5500 - I was thinking of the financial statements.

Rev Proc 93-42 and Rev Proc 95-34