MJ Hartman

a quarterly valued 401k/profit sharing plan allows for participant directed investments. a quarterly deposit made on behalf of one of the doctors was made to the money market fund in the last quarter of 2002 and was reported as paid to the money market fund for the 12/31/02 participant statement. Subsequent deposits were paid and shown on statements prepared 3/31/03 and 6/30/03 as being paid to the money market. After 3 timely statements had been provided to the participant (and a good return on the equity fund account that was where the money was supposed to have been paid all along) the participant calls and says that his $ was being paid to the wrong account!! What is the plan's obligation to reimburse for gains to the account? I believe that the only adjustments due would be for the 1st quarter that deposits were shown as made incorrectly; the plan/trustee/(tpa) is under no obligation to correct to-date as statements have been provided. Any comments, cites? thanks

the employer has a self-administered 125 plan (over 100 employees) and has and eap, an ltd/life/add plan, and a health and dental plan that is pays premiums to a couple of hmo's in the area. No self-funding of plans. I guess I need to check with their hmo carriers to determine if they have provided the correct documentation for their coverage. Listing this out it would seem that they'll need a Plan amendment and certification and a privacy notice for each plan?

I have another question. I have a not-for-profit entity that needs HIPAA language added to their plan(s). In researching this I can't find anything available other than Relius that offers their "Documentation Package" for about $2k. This seems like a lot of money for something that is just being added to an existing plan. Can someone provide a reference/link that I can review and give the employer some more details as to what they will be getting (and why it is required) that justifies this type of a cost? thanks.

I posted a question on sarseps rolling into a 401k plan before: is this considered a related rollover? should I be looking for top heavy consideration of key ee's $ being transferred from a sarsep into a new qualified plan? or is this just a hybrid IRA account that dosen't count? thanks.

the bank is wrong. In 2002 you can roll sarsep $ into a qualified plan; you can roll just about any type of IRA into a qualified plan with the new EGTRRA rules. (simple IRA's are a little more strict). You could always roll qualified plan $ into a sep anyways, because its an IRA account. I suppose if the plan document hasn't be amended for EGTRRA you'd have a problem, or if the qualified plan dosen't allow for rollovers. Both of these options are easily added by plan amendments.

A client had a sarsep that has been rolled into their new 401k plan during 2002. As this is from an ira type plan is this considered a related rollover? Its not from a qualified 401a plan, but is technically from the employer. I'm thinking about having to include this rollover $ in the test for top heavy, correct?

what you are describing is not a plan termination, it's in-service disttributions. If the plan administrator only does pst plans (which is pretty light when it comes to tpas these days) she/he could freeze the 401k accounts and keep the current plan intact. There is no point in terminating the plan just to maintain profit sharing accounts in a new plan. This company should seriously rethink moving to an administrator that is so narrow in its methodology and possibly technology that they cannot maintain more than employer contributions in their system. Let me guess; the new administrator either dosen't charge as much for their work or they are a relative.

the credit is only available if you have at least 1 nhce that is participating. No tax credits for this guy's plan.

I'm using corbel's document volume submitter (their document format when you fill out "their checklist" and they print out a plan & trust document w/ attachments). they've added multiple employer language to it, but also provided their volume submitter statement that would be used if I was filing under form 5307. a gentlemen has since called me from corbel and said they generate both 5300 and 5307 forms in their supplement package. He also wouldn't give me a straight answer about which form I could file. He said I could file a 5307 because it was a volume submitter doc. with no language changes, but I had to file a 5300 because it was a multiple employer document. I did reread the 5307 filing instructions and it says that a multiple employer plan has to file a 5300; which seems like a real rip off to me because there is one section in Corbel's document that says the plan could be used by non- related multiple employers (which might be standard in their own computer generated plan in Jacksonville) so the client pays the IRS $700 for nothing special at all.

I am in the process of filing for a letter of determ. for a multiple employer plan. I am using a Corbel drafted prototype (their determ. letter, not mine). Is it mandatory that I file a 5300 when no changes were made to their language and the participating employers don't want their own letters of determ. on the plan? It appears that I have the availability of just filing a 5307 and thereby eliminating any filing fees or sched. attachments.

the company in question was an sold in assets, not stock. employees were terminated from the old company and rehired as new employees of the "new company". that was our question. because this was not a sale by stock it would seem that the old plan would not be recognizing the owners of the superceding company. co. was sold in april, so contributions made under the old plan should not have to be concerned with new ownership, new hce deferrals, correct?

does anyone have any insight as to the issues as to amending a peo plan to a multiple employer plan? I realize that this will require a multiple er document and individ. letter of determination. As long as our software can be set up to test separate "divisions" and we file individual 5500's should we be concerned with any other "quirks"? This would seem to be a lucrative source of income if done correctly and priced sensibly. Any comments would be appreciated.

since a simple 401(k) is merely another form of 401k plan that has limitations of deferral/match amounts in its formula why does the plan need to be terminated at all? why not just amend the plan to a full 401k effective 1/1/02? this avoids the distribution/rollover issue altogehter.

I am in the process of amending a davis bacon plan for gust. does anyone know if the dol(especially the nysdol) is still requiring an individual IRS letter of determination on these plans? any comments are appreciated.

does anyone know if the dol is still requiring that prevailing wage plans receive an individual letter of determination? I have been asked to update a davis bacon plan for GUST and wondered if anyone has any up to date info on irs plan filings for these types of plans?

thanks for your replies. it gives me a lot more to work with on amending my current plans and giving the employers the real story on immediate cash outs.

in the past it seemed that our admin. group would tell an employer that if they did not receive a response from a terminated participant that they could cash out the term. part. balance without consent if it was less than $5000. Sometimes the employer would, sometimes they would not. After reading the detail closer in the regs. it appears that electing involuntary cash outs the employer dosen't really have a choice, anyone with less than $5,000 is paid out immediately. So does this mean anyone with a balance of less than $5000 in a plan with an involuntary cash out provision MUST BE PAID asap , irregardless of plan distribution rules stated in the document, and/ or the possibility that they might be due additional $ from a year end profit share or forfeiture allocation? and dosen't this present more of an administrative burden than the standard distr. rules? I'm hesitating to include this provision in the new docs. being drafted/amended for gust. any comments or thoughts on how others are using this option?

is anyone else having problems with getting satisfactory results when there are invoicing issues with Corbel? It seems for the last couple months I am constantly trying to get corrections and even software updates for forms I subscribe to; specifically their 1099 package which our office started using last year. It's Dec. and I've already heard from Corbel in Nov. that they would be invoicing me for the update for 2001 before they would ship the update.... my question is how long does it take them to generate a bill for something that should be an automatic issue? In aug. when their prototype was approved they were quick to announce that they had prepared an additional admin. manual that was to be useful in using the new doc. updates... when I still hadn't received in by the end of Oct. I started calling to find out where it was (they had no problem posting the $400 to my amex accout!). Turns out the manual wasn't even ready yet, so I cancelled the order in the middle of Nov. It's still on my amex account but in the process of being credited (after calls to amex and corbel). I am getting really frustrated with their whole method of doing business. If I billed for things before I had them ready for delivery I would be out of business!

A new not for profit org. was established in july 2001. it was created from combining 2 other organizations which had 403b plans. The new not for profit is setting up a 401k planasap. It has been found that payroll from the new company has been continuing to pay 403 deferrals into the accounts of employees who were former employees of one of the old groups that are now in the payroll in the new company. (in summation, they mixed oil & water)... Can these deferrals be returned/refunded as a mistake of fact and run through payroll correctly for 2001 in the new not for profit? any comments/help is appreciated. fortunately our company is only working on the new plan, not the termination/dissolution of the old plans.

I am the TPA owner's worst nightmare. After 20 years with a company doing everything from admin (85 year end vals and 20-30 quarterly vals), to plan document drafting, to sales and working understaffed for 2 years (while getting my CPC through aspa) and finally being the sales contact for the brokers bringing in the business, I left and set up my own tpa shop. I saw what it took to make a profit through working admin. staff to tears, promising to get in more help (which was too little too late). Every tpa group has their own comfort level for what an admin. can handle comfortably, enjoying what they do and being rewarded for outstanding performance. Profits come easier when staff is working together as a team. And guess what...part of the business I've gotten in my first year is clients from my previous tpa employer who still hasn't gotten it right as to how to manage caseloads, quality and administrators.

just for clarification, I thought that simple IRA's weren't considered sucessor plans because they don't fall under code sec. 401(a)...so couldn't the SIMPLE IRA be set up immediately after a plan year in which the 401k terminated; ie plan terminates 12/31/01, Simple gets set up 1/1/02. and the 401k assets could be distributed during the 2002 plan year?

the mpp plan must be amended for gust even though it will be terminated/merged.

unfortunately they must wait until Jan. 2002 to start a new plan; no other types of plan can be effective in a year in which a simple IRA exists (contributions paid )

not being an accountant I'm not sure how a taxable entity is re-established from one type to another, but the plan and trust are separate from any company. A document may state the type of entity estatblishing the plan (corporate, sub-s, not for profit, etc.), so certain provisions may need to be amended at the time the accountant modifies the company. I have never seen a plan terminated because of a re-classification by the sponsor. You'll need to be amending for GUST anyways, so you could incorporate any changes to the plan for change in tax entity at that time.

unless the son is under 21, I don't think there's an attribution issue here...especially if neither dad or son is an employee of each other's company. this dosen't seem to be a controlled group at all. no common ownership, no way to connect the companies by family attribution. it would seem to be a multiple plan situtation.