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jpod

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Everything posted by jpod

  1. jpod

    last day provision

    jpod replied to EBDI's topic in 401(k) Plans

    Last day of employment must be 12/31. What is so difficult about this?
  2. jpod
    If there isn't a discount or some other significant incentive to pre-pay service provider fees doesn't that raise a fiduciary breach issue (which is already staring us right in the face in view of the need to allocate unused forfeitures to participants)?
  3. jpod
    I thought the "safe harbor" was 10 years and anything less is facts and circumstances and you have to justify. Maybe there is justification here, but a mere one-year pause suggests otherwise IMHO. If 5 years is the new safe harbor, I am happy to learn that for multiple reasons.
  4. jpod
    There was, arguably, a "permanency" issue raised by the termination after only 5 plan years. Wouldn't the establishment of a new DB plan after only a one-year pause make this more of a the problem (if there is a problem)?
  5. jpod
    FGC: There's the rub: In the case of an IRA, all of the conditions in Section III, including the one you cited, are waived.
  6. jpod
    This is kind of weird but upon closer inspection it appears that while 86-128 says it would apply to avoid the excise taxes under 4975, it does not state (at least explicitly) that it would apply for purposes of IRC 408(e), which makes me think that 408(e) could still be in play. So, never mind.
  7. jpod
    Appreciate the comments but if we can stick to my question: Assume 86-128 applies (I think it does). Therefore, there is no PT under 4975. In that event, shouldn't 408(e) be inapplicable?
  8. jpod
    Let me re-phrase a bit. I am not talking about purchasing insurance through an individual retirement annuity. I am talking about an IRA for a registered rep of a broker dealer, and that registered rep wants to receive his commissions for trading in his own IRA account. Is that covered by 86-128? If so, doesn't that cure the IRC 408(e)(2) problem?
  9. jpod
    Resurrecting some ancient history here. Why couldn't the broker rely on DOL's Class Exemption 86-128 to receive commissions for trading in his own account, and if he can rely on it why wouldn't it prevent his IRA from blowing up under IRC Section 408(e)(2)?
  10. jpod
    Substantively I am pretty darn certain they can qualify as one of the 404© eligible investments, but haven't the disclosure requirements been moved to the 404a-5 regulations?
  11. jpod
    All right, I'll admit my ignorance: What are "white label" funds? Do you mean separately managed investment accounts packaged just for the Plan in question? If you do I think they are addressed in the 404© regulations.
  12. jpod
    I suspect Mike Preston's intuition is correct. The payroll manager either has known about a systemic problem for years but kept quiet and now someone's calling him on it, or he has now learned that he has a systemic problem well beyond this one employee. Either way he is paralyzed by fear.
  13. jpod
    What kind of "expense recovery" is this? Are you sure it is a plan asset and not a recovery of part of an employer-paid expense? Is it a DC plan?
  14. jpod
    That's about how I would do it, although I would jump right to have a nice day and not offer an opinion on the likelihood of assessment. Bottom line is that the client has no obligation to do anything other than to fix the problem by depositing the lost earnings.
  15. jpod
    So, you are making the assumption that you are in the context of a DOL audit. If that is the case won't it be very easy to whip out the 5330 instructions and show the auditor that there is no excise tax for a 403(b) plan?
  16. jpod
    I am all for practical solutions Austin, but your suggestion is no solution. First, why pay 15% when the penalty is only 5%? Second, if no penalty is assessed you end up paying 0%. Third, if the plan is a 403(b) plan nobody from the IRS should be inquiring about missing 5330 and excise tax payments, but if they do all you need to do is show them the 5330 instructions (I realize that showing them the actual law may be a waste of time).
  17. jpod
    I don't understand why one would file 5330s and pay a 15% excise tax when there is no liability for it. And, you could end up getting dinged twice: once for the 15% excise tax (good luck trying to get a refund after you've already filed and paid) and again for the DOL civil penalty.
  18. jpod
    Just out of curiosity what are we talking about here? Late deposits of elective deferrals? If so it is going to be disclosed on the 5500 and that's what will trigger the DOL's assessment of the civil penalty (assuming it has the resources to actually undertake this kind of assessment).
  19. jpod
    In any event a plan never files a 5330; the disqualified person who is liable for the excise tax files the 5330.
  20. jpod
    I think the way it works is that because there is no 4975 exposure the civil penalty in Section 502(i) would apply.
  21. jpod
    Not at all sure what you mean by "fixed dollar," but I assume you mean a specific annuity form of payment. It's been a long time since I have seen such a plan, but I don't see any problem with a plan mandating a single, annuity form of distribution, subject to the J&S requirements. If I am answering a question you are not asking, please clarify (at least for me).
  22. jpod
    The trustees don't have authority to mandate a form of distribution, unless you mean the trustees as the drafters of the Plan document. Only the Plan document can address distribution options (or lack thereof).
  23. jpod
    Why don't you just adjust the purchase price down in some fashion and let the buyer handle it after the year closes as usual?
  24. jpod
    Was the plan not operated in accordance with its terms, or was the plan operated in accordance with its terms but the W-2 and 941 reporting and tax withholding were done incorrectly (i.e., income taxes were over-reported and over-withheld)? Nevertheless, I think the IRS could be very sympathetic to allowing a retro amendment to cure the problem via VCP notwithstanding what the Rev. Proc. says or doesn't say explicitly.
  25. jpod
    Is there any reality associated with the concept of merging one 403(b) plan into another?
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