MJ Hartman

why is it taking 1 hour to get document downloads from relius asp? i realize there is traffic due to cycle 3 restatements but this is unbelievable

I had the same issue a while back. Service provider (bundled) taking over a plan called and said the restatement for EGTRAA doc. was signed late (Feb. of 2010) and needed a VCP filing. these vendors have people who do nothing but go through a checklist and if it doesn't match up with what they see its obviously wrong in their world.

In the process of preparing a loan form for one of our platform 401k providers, it appears they deduct the loan processing fees from the loan check, thereby netting out the amount a participant will receive. ie a person requests a loan for $5000 but receives a net check of $4900 after fees are deducted for processing. however the platform deducts their loan maintenance fee quarterly directly from the participant's account on the 401k platform. How is this correct when it was my understanding that fees are not taken into account for tax purposes when receiving a distribution from a plan but a participant is somehow obligated to repay the administrative fee to the plan when taking a loan. The platform is also including any express mail delivery fees to be deducted from the loan check amount as well. If the participant has no ability to receive this $ in the actual loan, why are they obligated to repay it as part of their outstanding loan ??

thanks! this felt like an asppa test question and I'm still tired from 5500 filings!

ira owner born March 1941 dies 7/2011. spouse gets the inherited IRA in 2011. does she need to take an rmd in 2011 or can she wait until April 2012 if she isn't born in 1941 or later and base it on his rmd age 70 1/2. no rmd taken by 2011 prior to his death in July. does she even need to take an rmd?

thanks Tom. I'll send in the certified mail receipt that we sent in on behalf of all of our clients we filed extensions for. (we had many extensions due to our oh so fine 5500 software being so late in working correctly) along with the copies of the extensions that we filed. can't wait to see how many of our plans get this letter.

what's the story with the irs now sending out letters to clients that filed extensions timely, filed their returns through efast with confirmations of receipt and being told their returns were received late? why is it we are constantly responding to erroneous gov. correspondence that takes more time to prove we were meeting all of their "rules"? I thought this new system would eliminate all of this?

has anyone tried to file a return directly in the dol website using ifile? I just spent a good hour loading up a late return for a client (yes they gave me all of their filing info so I could log in on their behalf) what a nightmare! there is no way this is going to work with the general public... I have never encountered such a contrived process to file an informational return online.

called UT yesterday and explained the sequence of letters received. I was told to ignore the $15k penalty letter, that they would receive the updated correspondence that was forwarded by the client indicating the proof of DFVC filing prior to the date that the penalty would be applied... I didn't get the excuse that they were backed up in their scanning, but its pretty obvious that things are very much out of synch in their processes. are there planes flying low overhead there too?

my client got a letter from the IRS in Dec. stating their 5500 for 2006 wasn't received and they could file under the DFVC. the client filed immediately under the DFVC & filed the forms correctly and paid the $750 to the DOL client got another letter from the IRS dated Jan. 26th 2010 saying they needed a copy of the cancelled check and the form letter was asking for an explanation of the late filing, reason for delay, the name of the person involved causing the delay and if the person had the sole authority to pay the taxes... responed to that letter today (2/16) client just got another letter from the IRS today with a $15k penalty (dated 2/15/10). they refer to a proposed penalty notice CP213 ---- never got this letter. what should they send now?

update. talked with one of the brokers (of course there will be more than 1 involved). now they tell me there will be 3 hce's in the 412i plan plus the 2 nhces. I still told them thanks but no thanks. Any takers?

I'm not! thank you for the response; I have decided not to accept this plan as a tpa, there are too many issues that aren't making sense per what the attorney, the investment advisor(s) the actuary and the client are telling me.

I have been asked to draft a 401k s.h. match plan that will only cover hces' (7 hces)as the nhce's (2) will be covered in a 412i plan. no hce's in the 412i, just the non-highlys another tpa will be administering the 412i plan (actuary) I know that you can set up plans that just cover the nhces using a s.h. 401k plan to load up the db plan for the hces., but this is a new one to me. I know that coverage should pretty much pass. they are telling me the excluded staff aren't excluded by any classification of employee in the s.h. plan; I don't know if they will be cornering them in the parking lot to make them sign an enrollment form not to defer or are actually expecting to just exclude them altogether. this type of design just seems fuzzy, maybe its the 412i portion for funding? any comments would be appreciated.

my guesses are: #2 Casablanca #18 The Fly #20 Taxi Driver #9 is a real long shot; Monty Python & the Holy Grail???

I just got our new quote for e&o coverage for our tpa firm. premiums up 45% from last year? I realize that the premiums increase when our annual revenues increase, but this is unbelievable. is this standard practice? a $15k deductible is in place and the vendors we work with (Nationwide, Hancock)_require 1million in coverage... in business for 6 years and 25 years of admin. experience and no claims... this seems unreasonable. any comments? thanks.

A soap opera setting. Owner of a company dies in an accident in 1998. Beneficiary designation shows that he had put his children as beneficiaries but form was not completed correctly: spouse (2nd wife/trophy wife) never signed off on the form (the broker's fault, not hers). The story goes that there was a pre-nup. where the wife signed off on the company ownership/benefits and was set up with a life insurance policy of some kind so the children were supposed to get the $. Children are each paid $15k in the year after death from his plan account balance(PST/401k Plan). No further payments are made to them. 5 year dist. rule is coming up fast. The trustees are planning to pay the balance of the distr. benefit to the spouse/widow. It would seem as though this account has begun to be distributed. Shouldn't the $ due the spouse be paid out or started to be paid out in some type of annuity format? The current tpa is telling the trustees that they don't have to do anything with the death benefit and it can stay in the plan. Should the trustees force the $ out (approx. $300k)? call their attorney,? call Lifetime Movie Channel?

I've seen lots of plans set up that only have rollover deposits in their first year or 2. Mostly for new co.'s that have owners getting plan distributions from prior employers and setting up a plan in their new co. that will have a loan provision so they can borrow against their rollovers.

let me explain. The aunt is currently 100% owner of the company. Once this daughter reaches 25, ownership will start to transfer to her behalf. The trust that exists for the children is for assets held outside of the company (life insurance proceeds?). The aunt is the trustee/guardian of these assets. Sorry for the confusion. The daughter has no account balance in the plan, she does not defer. There are no top heavy issues to worry about. The aunt has a small balance in the plan which is nowhere near 60% of the plan assets.

thanks for all of your responses. I just need to determine the year that this girl was no longer considered an owner(key employee) for 401k testing purposes. based on the effective date under EGTRRA she was a former key employee effective with the 2002 calendar plan year, correct? You are correct Katherine, when she attains age 25 she will start to acquire percentages of ownership incrementally. Her aunt is controlling the trust that was set up for her and her brother, who is not an employee of the company at this time.

the company is currently owned by the deceased sister. she is currently deferring and is the only owner since his death in 1998

looking at a plan where the owner died in 1998. Daughter becomes eligible to participate in the plan in 1999. She had no actual ownership since her date of participation but was included as hce due to attribution. She will acquire no ownership of the company until 2005. The current administrator is showing her to be in the hce group which I know is not valid based upon her current ownership (0) and her wages are not in the hce classification range. the adp test is using her to pass the tests because she isn't deferring. moving her into the nhce group will fail the test in the first year she is being considered a former key employee. My question is when did she become a former key employee? 2001? If this plan has been using prior year testing what year did she fall into the nhce group, 2001 or 2002? The plan has not been updated for gust or egttra yet either.

I would have a resolution prepared by the employer authorizing/notifiying the plan trustees of the cessation of payroll deferrals being paid to the plan as of a specific date. A letter should be provided to each participant notifying them that there will be no 401k deferrals being paid to the plan as of this date (a reason why they are stopping deferrals would also be good). If they ever want to start deferrals into the plan again they should do the above procedures that would allow the start up of deferrals as authorized by the employer. It might be helpful if there was another re-enrollment form required so employees have the right to decide if they want to start deferring again.

try this: http://employerbook.hypermart.net/multemp2.html its by Darin Watson and is pretty informative

thanks. I believe that the not for profit is also expecting to increase the hce's salary by the amounts that would be deferred into the 2 salary deferred plans, so he wouldn't even be paying in those amounts as well.

a not for profit currently has a 403b plan not subject to title I of ERISA (no er $ paid to plan). They are considering amending their current er sponsored defined contribution plan to allow for cross testing/rate groups. If everything works out we expect to get the hce to $40,000 in this plan. Am I correct that these plans do not need to be aggregated for 415 because there are no er $'s being paid to the 403b plan? that the hce can actually get $52,000 put away between both plans in 2003 (and another $2000 catch up?... and they could actually put in a 457 plan so he could defer another $12k right, bringing his amounts to $64k? Sounds like it works but it smells a little.