pmacduff

my two cents FWIW: I've had the same experience as chc93. I have had many final returns where I have the hard copy in hand and the "final return" box is checked. But when viewed on Freeerisa the "final" check in the box does not show. Never had any issues....

It is odd that the 5558 and 5500 instructions all refer to extending beyond the "normal" filing deadline. I would hold that your short plan year has a set "normal" filing deadline and you should be able to extend another 2 1/2 months. Not sure if it helps but I did find the following in the 2009 5500 General Instructions on the IRS site (my emphasis underlined and bolded): "Short Years. For a plan year of less than 12 months (short plan year) file the form and applicable schedules by the last day of the 7th calendar month after the short plan year ends or by the extended due date, if filing under an authorized extension of time. Fill in the short plan year beginning and ending dates in the space provided and check the appropriate box in Part I, line B, of the Form 5500. For purposes of this return/report, the short plan year ends on the date of the change in accounting period or upon the complete distribution of assets of the plan. Also see the instructions for Final Return/Report to determine if “the final return/report” box in line B should be checked."

Hello Tom, I had a client today asking me about the HC comp limit of $110,000 and whether or not I had the 2012 figure yet or info on any increase. Since this is a plan limit and from reviewing the historical comp limit info that number is also based on the same figures, correct? If memory serves, I think ASPPA lets us know each October for the next year anyway.

Austin - does the attached help? pcir230.pdf

IMHO - I think you should be fine due to the "special" allowance that 2009 and 2010 can be combined per the instructions.

When I go to the IRS FIRE website I get a message that there is a "certificate error" with the site and I should not sign on. (I'm going to "https://fire.irs.gov" per the instructions) I'm not very computer literate...can anyone tell me how I should address this issue? thanks in advance! edited for outcome... I sent an email to the IRS help for the FIRE system and was advised that I would need to contact our ISP about the security settings we might have that would cause this error. They said that a lot of people have this issue. I was under the wrong assumption that certificate errors meant a problem with the website but apparently that isn't so.

I was "trying" to be funny...I took all of those exams to get my QPA and was rather shocked when I read the OP and saw that the ERPA allows them to be eligible to receive the QPA designation. I think they should have to take all of the exams that the rest of us did for QPA, just as I will have to take the ERPA exams to get that designation. I'm not sure I follow your post entirely (i.e. the wording of your first sentence). It sounds as though you are saying that QPA's should not also automatically be awarded the ERPA designation but that you found the EPRA material was less comprehensive than the QPA material esp. with regard to the DB Plans. In any event - I was just joking but being sarcastic that an ERPA can be awarded my designation but I cannot be awarded the ERPA designation.... all tongue in cheek as I noted in my original post

Wow - I did not know that the ERPA designation allows you to forego all the QPA exams? I have my QPA...does that mean I can forego the ERPA exams? (tongue in cheek)

Jim - not sure if you have access to the "Pension Answer Book"; but I have a copy of the 2010 edition and question 12.2: "How are restorative payments treated" might answer your question. The answer is quite lengthy but the first sentence of the answer is: "IRS has ruled that an employer could deduct in full a restorative payment made to its defined contribution plan in response to actual and potential claims for breach of fiduciary duty because the payment was considered an ordinary and necessary business expense and was not limited by the plan deduction limits. [Rev. Rul 2002-45, 2202-2 C.B.116]" There is much more there but I thought this might help you get started....

ok - Plan Sponsor moves plan assets from product with surrender charges. There are individual accounts. Sponsor wants to reimburse the surrender charges. Charges are not unreasonable but Sponsor wants to reimburse just the same. I know these have to be treated as Employer contributions not restorative payments. Am I reading things correctly that Sponsor can amend the plan for a special formula for this allocation and then must test the allocation to be sure it is not discriminatory? I did see a method described whereby the Employer "bonuses" each affected participant through payroll and then gives them the option to defer some or all (provided the Plan Doc allows). Are there any issues with this scenario?

Yes Bird, I agree. The account for the wife probably has enough to process out her RMD. But the owner's balance is substantial and he does not have enough left in there to satisfy the necessary RMD amount. The broker on the plan also handles the personal investments, so the fix should be (hopefully) relatively simple to process.

Thank you both. No Sieve - 2011 is not the first year for minimums I think they began RMDs in 2007 or 2008. This was the first circumstance I have had where the owners are continuing to work as opposed to actually retiring and having to take the RMD out before the rollover. I agree in reading through the previous threads and the regs, the minimum is required prior to rollover. I will contact the client and the broker and see what we can do to fix this issue.

I know this has been discussed previously, but I cannot find a thread exactly on point. Here's the situation: Small Company with owner and spouse on payroll. RMD for both for 2011 is due by 12/31/2011. Plan allows for in-service distributions after 59 1/2. Owner is transitioning the business to his son so he and the spouse rolled the majority of their accounts out of the Plan and into IRA accounts last month. It seems to me that the RMDs for 2011 should have been made from the accounts before the rollover was done. I know that if they retired then the RMDs should have been made before the rollover, but what about these 2 owners who are still on payroll and will still be making contributions to their plan accounts? I think the broker planned on making the RMDs from the IRA accounts. At this time there is not enough in the plan accounts to process the minimums and I'm not sure if they will have enough by the end of the year. Thoughts?

Based upon a situation a client has - I've been researching and I found an ASPPA ASAP from 2009 in reference to the treatment settlement checks. The article states that there are 3 options: reallocate pro rata to current participants with balances, reallocate per capita to participants with balances or reallocate to affected participants only. It also mentions that the $$ may be used to reduce plan fees if the Plan Doc so dictates. The article also states that "the settlement fund proceeds should not be used to benefit employers, fiduciaries or other parties of interest, other than through the payment of reasonable plan expenses". Here is my question: Doesn't the payment of "reasonable plan expenses" benefit the Employer? I'm trying to understand why the payment of fees would be allowed but not using the $$ as forfeiture $$ to reduce the Employer obligation.

I, too, have a client that received this GAO survey. They contacted us to see if it was legit to complete and to get our input on some items. The humorous part of that to me is that this particular client pays ALL of the Plan fees even the asset management fees, none are charged to the individual accounts/participants which is not the norm these days. I found that ironic.....

calendar year safe harbor 401(k) plan with safe harbor basic match. Plan specifically excludes a category of employee that they call "TAR" (time as reported) which is basicially a per diem definition. There are 2 employees who were full-time & participating, went part-time continuing to participate and now are moving to the "TAR" category as of July 1st. After referencing the Plan Doc info these participants are no longer eligible to defer and receive the safe harbor match. I also believe, although cannot find it clearly stated, that they cannot receive distribution of their vested account balance until they completley sever employment. My questions really relate to their eligibilty to make a deductible traditional IRA contribution - Are they considered "covered" for 2011 since they were active in the plan through June 30th? Therefore 2012 would be the first year that they can make a deductible IRA contribution (depending on their AGI)?

IMHO - I believe that the 5558 is for any 5500 form extension (and now the 8955-SSA) so the new "zip plus 4" change would be for any 5558 you are filing.

FWIW - we use ft william and we too can attach the "accountant's opinion" as an attachment.

FWIW - I can't really remember back on any of the age weighted formula plans (ours have all changed to cross-tested) but I would think it's basically the same premise...per the plan doc if the Employer's contribution is not sufficient to utilize the cross testing allocation then the profit share is simply allocated on the old fashioned comp-to-comp basis. In other words, yes you could allocate the 3% across the board. I think that your Plan Doc should address that somewhere in the formula, allocation or top heavy verbage?

sorry - my bad - you are correct and the plan document states that fact. In this instance, that is actually better for the Employer because his participant is contributing 15%.

ok - I think I know the answer but want to double check. here is the situation: Mutliple Employer Plan; calendar year Allows for Employers to choose safe harbor match to pass 401k testing Plan uses prior year testing for non safe harbor Employers Safe harbor Employer ceases safe harbor match as of 04/30/2011 with proper 30 day notice to participant, participant didn't defer in 2010 making the prior year NHCE 0%. When the end of 2011 arrives we know this Employer will be subject to 401k testing and since the Plan uses prior year testing that will mean a refund of all deferrals for the owner on the ADP test side. Does he get to keep his safe harbor match as long as the ACP portion passes?

Thanks Austin. I, too, use FT William software. I have a question on your post, however - you mention to check the box "this is a prior year filing" but it isn't a "prior" year it's "current" year (2011 in 2010). Does that make any difference? I have changed all the dates in the forms to 2011.

ok thanks. I'm waiting on one last bit of information (Schedule A) and as soon as I have that, I'm going to give it a try. I will let you know how it goes.

agriffith I'm wondering if you ever heard on this? Did you get it to work using the 2010 form and changing the dates to 2011? thanks in advance!

when filing a 5500 form for a client (with the authorization form and completed signature page) someone inadvertently did the attachment with only the signature page (page 1) instead of BOTH pages of the 5500 form as required. Does this filing need to be amended to add the second page to the "Other Attachment"? We will correct this going forward but what would others do in this circumstance? I see that I posted the same thing last year with 2009 forms. Not a big deal then as it was the first year of filing. But now we are on to 2010 and I would like to know what others think.... Thanks!