kwalified

hi, a small calendar year MPPP that was frozen mid plan year 2010 had a new participant in 2010 that received their first and only contribution. The 2010 contribution was not funded until Sept. 2011. Let's say the new participant's contribution for 2010 was $1000, so at 12/31/10 his account balance was $1000. Historically, the plan has allocated earnings on an account percentage based on the beginning account value. Since the participant was new in 2010, he received no yield. The sponsor requested 2011 interim statements as of 8/31/11, therefore the participant had a beginning account percentage based on his 2010 contribution of $1000. Since the plan lost funds for the first 8 months we allocated a loss to his account, though technically the 2010 contribution had not been funded. How erroneous is this? The investments are pooled and the document states earnings are allocated using a weighted average. Should we have excluded the participant from allocating a loss to his account and just gave the older participants a greater share of the loss? For plan and reporting purposes, the 2010 contribution receivable was considered a plan asset. Thanks in advance for your thoughts.

They are not past NRA, however that age could also be amended as well to the earliest age possible 59.5, correct?

a small FROZEN MPP plan that will ultimately be terminated in the next few years, wants to amend to allow for In Service Distributions. I do not know of any obstacles that would prevent this. Assuming the plan sponsor provided a summary of material modifications and resolved to allow for In Service this would be ok, yes?

a dutch dual citizen has appx $100K in his plan overseas. He now resides in the states and is wanting to establish a plan for his sole prop. company here and avoid taxes. I did a search on foreign plans on this thread and did not come up with anything. My guess is that any U.S. DB/DC plan would NOT accept rollovers from other countries unless perhaps if they were a U.S. owned company. Any suggestions? Thanks

I agree. I think he is getting off cheap. His CPA was doing his annual admin. He should have been with a TPA. I believe his CPA was reporting his MPP with zero contributions for several years which probably triggered the audit. Thanks for the response.

A one participant plan started a ps and mpp plan in the mid 80's. Our company (a TPA) was engaged to prepare the documents for the plans. This is years before I took over the company. Administration (5500 EZ) was handled by his CPA. Recently his plans were audited by the IRS. He has not been making contrbutions to the MPP plan in years and his CPA failed to terminate that plan when it was no longer necessary to have two plans. So I believe the trigger to the audit was that he was filing EZ's on his MPP and reporting "0" contributions for several years. Anyway, upon review the IRS slapped him with a $25K penalty for failure to restate his plans. Ultimately they were able to negotiate that down to $4k penalty for each plan plus his CPA is charging him $1500. He is wanting my company to pay for the penalties. I nicely told him I am sorry, but I can not do that. Our files were shredded a couple of years ago and the only correspondence he has from our office is dated December 1986 when the plans were set up. I explained that ultimately he is the plan sponsor and is responsible for maintaining the tax qualified status of his plans. His CPA worked on the plan annually and did the admin and that he should approach him for relief. I have worked for my company since 1994, took over it after the death of the president in 2000 and have never done any work for this man. My employee has worked for us since 1989 and she does not recall ever doing work on the plan either. We clearly were brought in to provide document services only. Generally in the past when we only provide document services and its time for restatement, we would send out a letter to clients advising them of this and to make certain that they wanted us to still provide this service. However, with no files, I can not prove that was ever done. Personally, I don't think anything will happen, but if should I get a call from his attorney, I would just forward it to a local ERISA attorney I know. Any thoughts on this matter?