pmacduff

I guess have a different take on this...I might have thought that the question was referring to the actions (or not) of the Trustees and or Fiduciaries of the Plan. Is the investment firm either of those? In reading the question again however, I suppose once the "fraud or dishonestly" causing the loss was discovered by the Trustees/Fiduciaries, then it might follow that you would answer "yes" and report accordingly on the return.

I completely agree that the "right thing to do" is to inform the participant, I was trying to get a sense of whether or not the Plan was obligated to do so. mbozek answered that for me...

A few years back I had a terminating plan & sent the letters to the IRS locator in June. Didn't hear from the IRS and many of the participants found me through others that were getting paid out. Then almost a full 12 months later the IRS sent the letters out. Most had already been paid out. I received a flurry of phone calls. People called again to see if they had more money coming. Not a big deal I suppose but was a pain for me and took that much more time addressing all of the phone calls and explaining the IRS letter......

I have another question...if the levy is determined to be acceptable and the balance will be paid out to the State - does the plan have an obligation to inform the participant that the account is being forwarded to the State for payment of arrears child support per the levy?

masteff is correct - I wasn't citing to "avoid" RMD but perhaps a way that the plan wouldn't have to deal with the RMD before termination.

I think her first RMD could be delayed as late as 04/01/2013 per the following from the IRS website, does this help? "An account owner must take the first RMD for the year in which he or she turns 70 ½. However, the first RMD payment can be delayed until April 1st of the year following the year in which he or she turns 70 ½. For all subsequent years, including the year in which the first RMD was paid by April 1st, the account owner must take the RMD by December 31st of the year."

Thanks ERISA. Due to the nature of the business, the client does have distinction between the two. However in rare cases some of those layed off do not return to work and are then formally termed. They didn't want to have an issue with the Plan if this participant for any reason does not return whereby a review of the Plan would say he should have gotten an RMD in 2011.

Construction Co - non-owner participant over 70 1/2 still working and contributing to his 401(k) account; has not begun RMDs per plan provisions. He may be temporarily layed off for one or two months this winter. It's anticipated he will return by Feb of 2012. If the participant was layed off December 1st, for example, is the plan required to pay out an RMD for 2011?

Thank you both for the information. This particular plan requires a two year break-in-service before payout. However the participant in question is due to be paid out at this plan year end (which was 10/31).

Our client received a child support enforcement levy letter from the State against a former employee's vested balance in the Plan. Balance has not yet been paid out. Should the client refer this back to the participant to obtain a DRO or does the State have the authority for this request without a DRO? The levy references "section 5232(a) of the Civil Practice Law and Rules" & the client is in NYS. The client will consult their attorney, however I'm curious what others have done in practice in these matters. any input appreciated.

Can I push this back up?...Jim...anything......??

I know I'm being thickheaded - but that this is even an issue (funding safe harbor with forfeiture $$) has continued to baffle me. The safe harbor contributions are 100% non-forfeitable when contributed/allocated. Past forfeitures are simply being used to "fund" the safe harbor contribution. Someone else once mentioned - isn't this a good thing for the government because it actually reduces the Employer's deductible amount, thereby (in theory) increasing the Employer's tax liability? "can't fight city hall"

No - the ownership for both Companies has always been the same - 3,4 & 5 never had any ownership in Co A.

Here's the setup... Company A = Owner #1 50% and Owner #2 50% Company B = same Owner #1 20% ; same Owner #2 20%, Owner #3 20%, Owner #4 20% and Owner #5 20% All of these owners receive payroll under only Company A and the owners plan balances are all under Company A. Do you concur that for top heavy determination purposes on Company A I use only the balances for Owner #1 and Owner #2?

I have a LOT of clients this year calling me about the 2012 limits and any increase (or not!) Tom - When is it actually known for sure what the limits are for 2012 or is that something that might be pushed off until the last minute if the gov so chooses? I guess everyone is antsy this year because it's been awhile without an increase.

thanks EBDI. I actually now have one for JHancock and I'm not sure that I can get JHancock to process the correction as earnings. Therefore I think a 'transfer in' will work in this case. The reports will then reflect the amounts separately for proof of correction as well.

curious what others do when submitting the lost earnings for participants on any of the 401(k) investment vendors such as JHancock, American Funds, Nationwide, etc. with regard to how the deposit is coded. I don't believe it should be made as a "contribution" as that would impact the current year's tests. I think it could be coded as a "transfer in" on most vendors; just trying to get my arms around the mechanics of the actual payment to the Plan participants. thanks in advance.

I agree with ESOP Guy and as "reinforcement" was at a seminar (Janice W. I think it was) a couple months ago and we were specifically told that the special extension box need not be marked for the 2009 and 2010 filings.

most of our filings are pretty small but we have had success with both 2009 and 2010 filings going well. It hasn't taken longer than 3 business days to receive confirmation from the FIRE site and I've gotten a "good" filing status on all.

I found this on the IRS website. Not much help to answer your questions, but I see at the top of page #3 that they refer to the 2011 8955 SSA form on a calendar year plan would be due to be filed by July 31, 2012 without extension. So...in my opinion they will be producing a 2011 form. Whether or not they bother to do a 2010 form (because it could be filed on the 2009 form) is another question. I've noticed in the past that Relius refers to the software releases by the release year (for example, their software for the 2010 5500 forms is actually called the 2011 version) instead of the form year. Meaning IMHO, if Relius refers to a release in January of 2012 that will be the 2011 8955 SSA forms. IRS_a_11_21_SSA.pdf

I'm old enough that I remember when people would ask what I did & when I would say I was a "Pension Administrator" they would say, "oh - you're in insurance?" I have found even with the masses more educated in the DC/401k arena nowadays if I say I work with 401(k) Plans they think that means I'm a 401(k) investment advisor and try to corner me on what funds they should be picking in their Plan at work. I don't even try to explain anymore!

Bird - are you saying that you don't report the premium payments as an expense because it is an SF form or you don't do that in general? If not - I'm just curious how you do report the premium payments from the plan?

We have a plan that is alittle larger but the premium payments are made directly from the Plan accounts and then shown on the valuation and participant statements as a transfer out to the insurance account. That way in years when there is no profit share the premium is deducted from each participant's individual balance. We account for the premium payments on the 5500 reporting as a plan expense.

Jim - as an addendum to Tom's reply, "TCC" stands for 'Transmitter Control Code' & "FIRE" stands for 'Filing Information Returns Electronically' We are a small shop and don't have that many SSAs to file for our clients anyway. We create a separate batch in Ft William for each client and plan year and are uploading those files individually (as required) to the FIRE system. It's been working great so far....

Hello Jeff, I requested a TCC and received it quickly. We are sending the SSA forms to the client & advising them to review, date and sign that copy and keep it with their records. They are instructed to phone or email me after review and then I go ahead and file electronically on the FIRE website (no signature required). I have found it to be a fairly easy process. We use Ft William to create the file for each client that I upload to the FIRE site; but I imagine that any of the big vendors including Relius will also have a way for you to create a file in the proper format for the FIRE system. Good luck!