pmacduff

Appleby - I don't think I'm confused...I was referring to the original thread, "Can a participant who has had money in simple plan transfer money from simple ira plan to employer qualified plan? or does it have to go to a conduit ira?" and I am saying that the Simple IRA $ cannot go directly to a Qualified Plan.

I don't think the answers here have been accurate. Simple IRA plan monies can only go to other Simple IRAs or a regular IRA not a Qualifed Plan. That would be the "work around" (roll to regular IRA and THEN to the Qualifed Plan) however I don't know how that would be viewed in an audit. Simple 401(k) monies can be rolled directly to a Qualifed Plan. Anyone else care to agree or disagree?

I don't have a problem with the Sponsor/Administrator paying the administration fees from the plan...what I have a problem with is one of ennemm's points (I think)...that once it was decided to begin paying admin fees from plan assets, they went back and deducted for the prior 9 months (3 quarters) admin fees and then began deducting at the start of each period. I think if the Plan Administrator/Trustees decided to begin paying fees from the plan on 07/01/01, then that's when they should have started. The fees would have come out evenly (dollar cost averaging works both ways, deposits and expenses). If, for some reason between the Employer, Investment firm, etc. wires got crossed and the fee deductions weren't initiated when they were supposed to be, I think that the fee deductions should have started at that point, not retroactively. If the Sponsor was that concerned about the fees, it would have seen to it that the deductions started July 1, 2001.

I'm looking at your chart, I assume that the dates are wrong at the bottom...shouldn't it be 2002? Otherwise, in addition to 6% you also paid twice for the 07/01/2001 - 09/30/2001 period, right?

You can code the son as 100% owner also, (Relius accepts this coding; ie., two people with 100% ownership) then the son will show as key.

My vote goes with PAL100579, I always understood that the spouse was the beneficiary unless a waiver was obtained. (Although I don't know that a divorce would negate a prior designation.) It seems to me that we have seen past discussions on these very boards and in articles which indicate that some courts have found in favor of the beneficiary on the beneficiary designation form. It would be interesting to see how this turns out!

Richard - thanks for the replies! I didn't want to post to the payroll data and let Relius do the splits because I know that there would be slight variations each month between the client's actual split and the Relius split due to rounding differences (surely only pennies, but then I'm one of those who MUST balance things to the penny!. ) I did import with my DER and then use the takeover transaction for the first month and it worked fine. It actually doesn't take much time, either, so as long as I save my *.csv import files, I can do it rather quickly should I need to reverse and rerun. Thanks again for your time and input! Patti

I do have a DER to import the contributions by fund...My problem is that if I do this monthly and post a takeover transaction for each one, I then lose my data, right? So if, for some reason I have to reverse and repost, I would have to start all over again and reload each month. It seems like there must be an easier way!?!?!?!?!?

OK - Here's my situation. I have a 401(k) plan where the Employer splits the money up among the plan funds and sends the $ directly to the funding house. I receive monthly spreadsheets with the splits by individual and investment. Isn't there a way for me to import this information into Relius? I tried setting up a DER with SS# and each account (there are 3 deferral accounts and 3 match accounts). However, when I import, it doesn't ask me for a date (story of my life ). In any event, I want to import these monthly splits and then run monthly transactions. Can anybody help? Thanks in advance.

Relius pulls that 01/01/02 entry date from the Plan Specifications Plan Entry page. Are you using a takeover transaction for any data? Did you try checking the "estimate prior entry dates" on your first eligibility run? Otherwise, I have also had to enter the dates for those who had prior entry dates. Luckily, on the larger clients I have had an Excel file and have simply imported the prior entry dates to Relius. Sorry I can't be more help.

We have an employer who sold the assets of the Company to a "person" in 2002. However, this "person" was already an employee of the original entity (since 2000 but not highly compensated). There is a new plan under the new Company, but we are involved in termination of the old plan. Here's the question...original owner was paid in 2002, but did not defer. No problem there...0% for ADP test...but new owner (formerly a regular employee) did defer into the old plan for the first two quarters of 2002. He did NOT have any ownership in the original sponsor (the plan we are terminating). Is the new owner considered highly compensated for 2002 testing purposes?

no problem - sometimes it's nice to have a message thread that is so easily answered!

From the EZ Instructions: Pretty clear cut: "Note: All one-participant plans must file a Form 5500-EZ for their final plan year even if the total plan assets have always been less than $100,000. The final plan year is the year in which distribution of all plan assets is completed..." FYI - the BOLD items are emphasized in the instructions, not my emphasis!

I'm happy to say that I think I have found a way to make this work. I did a census DER entering a distribution to the loan account for this employee, then ran a takeover transaction and it recognized the loan distribution. My only problem is that the "vested" balance on the report I'm using, still shows the loan principal balance. (Ending Balance does show as "0.00". Any way for me to get to that loan account vested balance amount and "0" it out?

I'm getting frustrated waiting for Support when trying to finish up a 06/30/02 val report... I have a participant who defaulted on his loan in a prior investment vehicle. That investment manager will be issuing a 1099-R next January. When the plan moved to the new funding provider, the loan was not included because it was already defaulted. I already had the loan in my software, and cannot now get it out. How do I default and distribute a loan balance without distributing the participants remaining cash balance? I tried following the Relius help screens, but it didn't work the way I was told to do it; it would default the loan, but also distribute the rest of the participant's balance! Any help is appreciated. (FYI I'm on version 7.1)

I am embarassed to say, (although it was only 4 days ago), I cannot remember how I eventually fixed this issue! The plan is working fine now. There are no source eligibility issues, as the only contributions are deferral $. I think for some reason I may have had "1" hour coded in the elig requirements in specs, and since I only entered payroll for 06/30, Relius thought she didn't have any hours yet. Thank you for your time and input, it is always most helpful.

I did that. I have two eligibilities posted, 01/01/02 and 06/30/02 and the contribution for the 6 months posted as a 06/30/02 contribution transaction. It is not working this way.

Relius 7.1 - I have a plan with no eligibility requirements. I have "0" coded in the Plan Entry Requirements Specs for hours, no years or months of service, no age, etc. I do, however, have 1000 hours in the "vesting" hours fields. Under entry dates, I have "date of event" coded. I ran elig as of 01/01/02 and 06/30/02 (semi-annual val dates). I have an employee hired 01/02/02 and after I run elig and transactions, it says that she is ineligible. When I check the employee census data, it says "fails service requirement". Am I crazy? I thought I saw prior threads saying that I shouldn't have to enter elig transactions for each entry date and, in this case, I couldn't feasibly enter 183 entry dates anyway! Any guidance is appreciated.

The plan must have a stated formula for allocation to participants, but in a discretionary Profit Sharing Plan, the formula for the Profit Share is just that...discretionary.

Thorton, I think you misunderstood the question - Can you REMOVE the last day requirement for a 12/31/2001 allocation. I think that means that more participants will receive an allocation not less, right AdminFL?

I've looked all through the message boards and can't seem to find the thread I wanted to review. What is the story with an employee who might opt to defer 100% of pay? As has been mentioned, I'm thinking of the second income earner making, oh let's say $11,000 a year. How would the FICA taxes be paid? I know that in today's economy, we probably won't see much of this, but how to address it when it happens? I know that prior threads mentioned putting in a document limit (for example 75% of pay) for administrative ease, but what about those few clients who insist on the 100% of pay limit? I thought a CPA responded that the employee would then have to "pay" the FICA taxes to the Employer, but that doesn't seem acceptable. What would go on the W-2 then? Any input is appreciated.

In the "old" days, you could accomplish this by taking a loan out against the policy for the entire amount of the cash value. That amount is then deposited to the Plan Trust and can be rolled out "tax deferred" to an IRA or other Qualified Plan. The policy ownership is then transferred to the participant individually. With a "0" cash value, there is no taxable event. The participant would then have to "repay" the loan to the policy with personal funds in order to replenish the loan. I'm no insurance expert and not even sure if this can still be done this way, but we used to do it all the time to allow a participant to keep the coverage with no taxable event. Others ideas?

Thanks for the reply Tim! I don't know what area of the country you are in, (I'm in the Northeast) but it is funny your point about your client's maximizing and being ok with refunds because they know they have maximized. That makes alot of sense to me.....but we have taken over a number of smaller clients who are annoyed that they have had to to take refunds every single year; they want us to monitor and tell them when to stop so that they don't have to take money back. Also -we do have most of the investment firms give us accrued reports, but it is only at plan year end, not quarterly or semi-annually. I didn't figure that there was an easy out for this dilema, but it was worth a shot, right? Thanks again. Patti

I'd like to know how administrators out there handle clients when using the Financial Interface in Relius with regard to ADP/ACP tests. We have many small clients that we test at June 30 to project to year-end and prevent test failures. When using the financial interface, the data contains a prior year receivable and does not yet have the current last payroll receivable. At this point, we still request census data including deferral/match every six months, but I have to have the client in the database twice, using one for account balance data and one for testing. How do others do this? Is there an easier way? Any input is appreciated.

Per the instructions, "2R" is the new code for a plan that has participant brokerage accounts. It is new on the 2001 form. Hope this helps.