Pension RC

Column b of the Form 6088 asks that you indicate if each participant listed is an HCE. For this purpose, is a former HCE considered an HCE? Thanks for any responses!

My understanding is that, for valuation purposes, accrued dividends are not included in the market value of assets. Is that correct? Thanks very much.

I work on a mid-sized DB plan that generally doesn't pay lump sums, but has opened up a lump sum window until the end of the year. One terminated participant, who would like to take the lump sum, was born on 7/1/1960. Therefore, he will complete 59 1/2 years on 12/31/2019. If his distribution is not processed until 12/31/2019, can he avoid the early withdrawal penalty? Thanks for any responses!

It's a Sub S corp. Thanks!

I have a client who receives income on a W-2 and on a K-1. For 2017, his W-2 is $140,000 and his K-1 income is -$26,000. Do I need to subtract the K-1 income from the W-2 before calculating the 25% of compensation limit for profit sharing, or can I ignore the K-1 negative income? Thanks for any responses!

I just had a client ask me how long she is required to retain records (employment and other). Her auditor is telling her that she has to keep record forever. We generally keep paper copies for 7 year, and I just learned that we keep everything electronically - forever. Is there any formal guidance on this? Thanks for any responses!

Is there any issue with unfreezing a plan and soon thereafter (maybe a month) terminating the plan? Thanks for any responses!

Thanks for your response regarding the consent issue. Assuming that this would be addressed, would an RMD be required?

A participant in a traditional DB plan retired and elected a life annuity to begin at age 65. When he is 85, the plan sponsor terminates the plan and lump sums are offered to all participants, including current retirees. The participant elects to rollover his remaining benefit, and the rollover is processed on 6/15, after he's already received 6 life annuity payments during the year. Does an RMD equal to 6 monthly payments need to be paid before the rollover is processed? Thanks for any responses!

The IRS instructions for calculating an Required Minimum Distribution from an IRA state that you use the age that the participant will turn on his birthday in the current year. I assume that this applies to any DC plan RMD. I've been told that one could use attained age as of the last day of the prior plan year (as long your consistent year to year). Is there any basis for this? Thanks for any responses!

Form 5330 has places for the filer (plan sponsor) and paid preparer to sign. It's not clear to me from the instructions if both of them need to sign. Do they? Also, I see that the Form 5330 instructions only provide a mailing address for filing, which suggests that they need original signatures, but the instructions also allow for the paid preparer to electronically sign. Is it true that this form must be mailed and that the plan sponsor's signature must be a wet signature? Thanks for any responses!

Does an election to apply the balances to the required minimum or quarterly need to specify the amount applied? Specifically, Plan year is 6/1 - 5/31. 6/1/2016 Minimum is $700,000. Prefunding Balance as of 6/1/2017 is $150,000. Plan was frozen 6/1/2017. 6/1/2017 valuation is not complete yet, but minimum will surely be much less than $700,000 since there is no target normal cost. It will probably be about $300,000. Therefore, the 9/15/2017 quarterly will probably be about $67,500 (=$300,000 * 90% * 25%). Can the plan sponsor just elect to apply whatever is needed to cover the quarterly? Should he elect to apply the whole $150,000? Thanks for any responses!

We have a DB plan that terminated in February 2017. After all of the participants were paid, there were still surplus assets. The plan sponsor would like to reallocate 20% of the surplus to the participants so that the excise tax on the remaining surplus is reduced to 20%. A couple of questions: 1) A participant terminated employment in May 2015 and was paid in November 2016. Must she be included in the allocation? 2) The plan benefits were paid to participants on various dates, as the distribution forms were returned. As such, the PVAB's were adjusted to the dates of the payouts. Now that we are allocating 20% of the surplus (and assuming that allocating based upon PVAB's isn't discriminatory) the PVAB's for the allocation would all be as of a single date - correct? Any responses would be appreciated!

Involved in a PBGC plan termination and the Form 500 was already filed, so the 60-day review period has started. I just found out that one person, whom we assumed never worked 1000 years in a year, actually did work 1000 hours in 1 year and, since the plan is terminating, is 100% vested in a 1 year benefit. We plan on sending distribution forms to this person. Is it necessary to file an amended Form 500, which would start the 60-day clock again? Thanks!

If a terminating plan has a short final plan year due to the completion of distributions, but files a 5558, is the extended due due what it would otherwise be if the plan wasn't terminating (9 1/2 months after the normal end of plan year), or is the extended due date based upon the end of the short plan year? Would you happen to have a citation? Thanks for any responses!