pmacduff

Yes - we use the TED files for import - you don't have to do any formatting of the file if you use the Interface. If not, then I guess you could put the file into excel and import through a DER. I'm not sure how the funds would combine using that method, but maybe the TED files have "total" lines in them. JHancock provides TED files quarterly. You download a *.zip file and, when you unzip that, there are 2 data files in *.txt format. [i keep them in separate directories by client.] Each quarter when you unzip the file there will be 2 files, one is a quarterly period file and one is a year-to-date file. If your client is annual, you need only the final year-to-date file to import. I rename the files when I save them using the quarter end date (i.e. 0307, 0607, 0907 and 1207). In Relius, we set up an Investment in the Investment Table that is simply "John Hancock". Then under Account Definitions, we set up all of the source accounts using the John Hancock investment from the table. When you are ready to import using the Financial Interface, there is a spot on the second page that you mark to "import to one fund". The system combines the contributions, gains, transfers, etc. and imports into the John Hancock investment by source for each participant. I'm sure if you contact Corbel they will help you through the process. Good luck!

We use the Financial Interface. We set up one fund in Relius, ".John Hancock" - for each source in the plan. You can import totals and do not have to import each fund. We've been doing this for a long time and it works well. We also do not import beginning or ending balances. Since you can choose what to import, we import the gains & losses and sometimes the contributions (depending on the client). We use the loan module and don't import any of the loan info but do all the loan transactions individually so our loan bals are per the amortization. I don't know how large your plans are, but I have a few that have over 200 participants, I'd go out of my mind if I had to hand key! If you don't want to use the Financial Interface, I have other vendors where I copy the whole *.pdf file contents, convert to a text file and then convert to Word then Excel. You can go directly from text to Excel, but I like to look at the data in Word first to be sure that the data is as it should be. I've had success with this method, but have found that sometimes it can take just as long as hand keying, depending on the size of the client and the layout of the data.

Believe it or not, every surviving spouse I have had rolled the benefit, so the taxable amount was always $0.00. I thought that there was an amount (for example $10,000) of death benefit up to which there isn't any taxation. My instincts tell me that the taxable amount in this case is the $3,500 and that whoever files the decedent's tax return for 2007 will do the reporting accordingly.

I did a search but can't find this particular question. I have also been through both the General instructions for forms 1099 and the specific 1099-R instructions. There is a death benefit distribution that was paid to the decedent's estate in 2007 (no beneficiary designated, no spouse, no family). It's not a huge amount...just over $3500. Participant died in 2007 - a personal return (1040) will be filed. Participant made roughly $16,000 in payroll in 2007. I know that I use the code "4" on the 1099-R form. My question relates to the amount boxes on the form. The gross distribution is $3,500, but what do I enter into the "taxable amount" box, if anything? The box is there to check for "taxable amount not determined", but I was advised some time ago that checking that box is "frowned upon" and the Service wants the plan to make every attempt to determine the taxability of the distribution. I know I'm probably overthinking this whole thing, but I want to be sure the forms are accurate.

An update... Client's counsel advised that unless the Plan Doc distribution provisions specifically address "termination for cause" then the client should go ahead and send out the paperwork/process the distribution. This is a basic prototype plan and the Plan Doc doesn't address termination for cause. We are sending out the dist. forms per the client.

It's actually an employee leasing company that changed the plan back in 2003 from single employer to multiple employer to conform with all of the requirements that the regs set in motion. (I now have to test each Employer separately for everything from ADP/ACP to top heavy etc..) Derrin Watson's 'Who's the Employer' book(s) helped a great deal in understanding all of the issues. This plan operates very well and I consider us lucky with many of the Multiple Employer Plan horror stories I have heard. I went to a Multiple Employer seminar at ASPPA however a large focus of that seminar was Defined Benefit Multiple Employer Plans. Thankfully we only have DC Multiple Employer Plans!

We have a PEO Multiple Employer Plan for which we file one 5500 form (approximately 75 - 90 participating employers). Ours doesn't have pooled accounts, per se, but uses a National vendor group annuity product with individual accounts per participant. Anyway, the plan has been audited by the IRS twice now (if you can believe it) since inception in 2003 and "passed' both audits with flying colors. Hope this helps.

I went to a loan & distribution session at ASPPA this year. The speaker mentioned that there is still controversy over this issue. He said that "the IRC starts the 5 year period from the date the loan is made" however "the TEFRA blue book states that the 5 year period starts with the first payment as long as the payments start within 2 months of the loan origination". Our loan forms say that the first payment is due "no later than" 30 days after the loan is issued. We have had IRS plan audits and never had this brought up as an issue so long as the repays began within that time frame.

you can "gross up" by taxes, fees, etc., but I don't think that's going to get her from $2525 to $13000!!!

So far the client is not delaying the payment. The plan states that the distribution period is "the quarter following the quarter in which termination occured". The participant terminated in the end of Sept. '07 so is due to be sent forms/request payout in the current quarter.

Client is prosecuting. The amount in the account is "close" to the amount stolen. Client and counsel are discussing and will advise me accordingly. Client was concerned about the timing issue, because distribution paperwork would otherwise be provided (due very soon) and there may not yet be a legal resolution before that time. Thanks for all the input!

great info...thanks! One problem I forsee is that the plan distribution policy is "as soon as administratively feasible following the plan year quarter in which the participant terminates employment". The normal course of events is to send the distribution paperwork at that time. Is there valid support to delay sending out the paperwork as a remedy is pursued?

We have a client who has fired an employee for stealing (not related to the Plan). The plan is a non-standardized safe harbor 401(k) using the safe harbor non-elective 3%. No other contributions in the Plan. Of course the client is spitting nails about having to pay the participant out the Employer portion of the account (can't say I blame them!) Anyway, in the interest of the client, I thought I'd grasp at that straw...anyone have any ideas on how the Employer could delay or deny payment or does anyone have any experience with this situation in the recent past? I have advised them to check with counsel.

I didn't see where J4FKBC answered re: top heavy - ... if you have an eligibility wait on the safe harbor piece, the plan is subject to the top heavy rules. You must give the safe harbor immediately (upon eligibility to defer) to be exempt from top heavy. Also, if there are ANY employer non-elective contributions (including forfeitures reallocated), top heavy is back in play as well. The plan must consist soley of 401(k) contributions and safe harbor to be exempt from TH. my 2 cents...

I enjoyed the conference this year. I hadn't been in a few years. Even for those of us who have been in the business awhile, you can still get information overload, but you learn something every time! Anyway...here's the form in *.pdf DOC071025_001.pdf

I have a copy of the sample 2008 5500-SF from Janet's presentation that I could scan and post. Is it ok to post that Tom? I don't want to do anything I shouldn't !

Sully - yes, I tried to thank you earlier but was unable to post. The attachment is great.

Isn't his 1st RMD due by April of 2008, not 12/31/2007?

I've been asked by a client if I could tell them an "average" matching contribution formula or perhaps what the most common match formula might be that we see in Qualified Plans. I've been in pensions for 17 years and in the old days it was very common (in our area anyway) to see a 50% match up to 6% deferred. But...that WAS in the old days. There are so many different possiblities now, along with the safe harbor match plans, that I can't even begin to imagine a general average match formula. Also, many of our small clients have suspended or eliminate their match formulas for economic reasons. This particular client uses a 50% up to 4% match and was told by an employee on their benefits panel that the match was low. Any thoughts?

Thanks too Tom. Working with this IRS auditor, there have been times I can't see the forest for the trees. I wasn't thinking of the "employer" aspect attributed to the 401(k) deferrals. There is an employee in the ABT who did not make any 401(k) contributions or receive match and was not eligible for the ps (worked 85 hours in the py and termed). He has a 0.00 ebar in the ABT of course and the auditor was thinking he shouldn't be showing in the test at all. But since he was eligible to make 401(k) deferrals and simply opted out, he should be there. As a side note, although ROTH contributions are after tax, they are still "elective deferrals", so I assume that they would be in the same category?

Thanks Merlin.

Ok - my Relius software produces a report called "Average Benefits Percentage Test Under 410(b) Tested by Annual Accrual Method Without Permitted Disparity" (whew!) Anyway, this is the test that is including ALL employee and employer contributions for the plan year. I have been reading through the 410(b) reg. section (see below) and am confused by the bold underline section as it appears to say that you disregard employee contributions. Can anyone point me to where in the regs it defines all types of contributions to be used for the ABT? Sec. 1.410(b)-5 Average benefit percentage test -------------------------------------------------------------------------------- (a) General rule. A plan satisfies the average benefit percentage test of this section for a plan year if and only if the average benefit percentage of the plan for the plan year is at least 70 percent. A plan is deemed to satisfy this requirement if it satisfies paragraph (f) of this section for the plan year. (b) Determination of average benefit percentage. The average benefit percentage of a plan for a plan year is the percentage determined by dividing the actual benefit percentage of the nonhighly compensated employees in plans in the testing group for the testing period that includes the plan year by the actual benefit percentage of the highly compensated employees in plans in the testing group for that testing period. See paragraph (d)(3)(ii) of this section for the definition of testing period. © Determination of actual benefit percentage. The actual benefit percentage of a group of employees for a testing period is the average of the employee benefit percentages, calculated separately with respect to each of the employees in the group for the testing period. All nonexcludable employees of the employer are taken into account for this purpose, even if they are not benefiting under any plan that is taken into account. (d) Determination of employee benefit percentages—(1) Overview. This paragraph (d) provides rules for determining employee benefit percentages. See paragraph (e) of this section for alternative methods for determining employee benefit percentages. (2) Employee contributions and employee-provided benefits disregarded. Only employer-provided contributions and benefits are taken into account in determining employee benefit percentages. Therefore, employee contributions (including both employee contributions allocated to separate accounts and employee contributions not allocated to separate accounts), and benefits derived from such contributions, are not taken into account in determining employee benefit percentages.

IMHO - It was still pretax $$, even if participant was ineligible. I think the 1099-R form ought to have a "1" code.

Thanks again Mike. Yes, simplest, easiest solution & I'm all for it; I think the client will be too. This is the 2nd audit within 5 years and the 3rd within 10 for this particular client. Priors went well, but the plan didn't have the 401(k)/SH/Cross tested piece (used to be a straight PS plan). I can't wait to be through this......

True. Do you see any way this can pass as is?