Flyboyjohn

The last 2 audit cap sanctions our clients experienced were $5,000 and $12,000 so if it's "only" $3,000your client should consider themselves lucky.

I'm now reconsidering. Notice 2013-54 applies to "any" arrangement that pays or reimburses individual policy premiums making it an "employer payment plan" subject to the draconian $100/day/person penalties. While the 162(l) tax deduction might still be avaialble it's certainly not worth the risk of penalties.

Despite the new general prohibition on pre-tax payment or reimbursement of individual health insurance premiums it appears that corporate payment or reimbursement of 2% S corp shareholder premiums is still essentially pre-tax via the IRC 162(l) deduction taken on the shareholders individual return. See IRS Notice 2008-1 which has not been rescinded to my knowledge. Anybody disagree?

So essentially the folks eligible for the k plan have to be eligible to defer from date of hire also

Not if the account meets the 5 year clock (while death is a triggering event for "qualified distributions" you still have to meet the 5 year holding rule)

How do you meet the universal availability rule on the 403b?

Is the problem that the SIMPLE investment accounts are still being recordkept and included in the 5500 as if they are part of the 401k plan? If not then I'd be inclined to say let sleeping dogs lie...

FWIW it's my understanding that the majority of sanctions imposed on CPAs by the AICPA (and state CPA societies) are for deficient employee benefit plan audits.

Forget about what your "program" is telling you, here's a simple approach for your situation: 1. Determine the number of active employees on 1/1/2013 (anybody not actively working on that snapshot date can't defer so can't be an "active participant") 2. Add the number of folks who had a balance in the plan on 1/1/2013 and aren't included in #1 3. If the total is 120 or less you don't need an audit for 2013

I've heard of these but haven't seen one, can you redact the client identifying information and post a copy for us to see? Much appreciated.

Yes to the extent her income exceeds the foreign income exclusion (that is, the income that she's sheltering would otherwise be subject to US income tax). But if her income is fully sheltered by the foreign income exlcusion she wouldn't want to have a US qualified plan unless it was just for a Roth deferral.

Sounds like what you have is a profit sharing plan that never applied for a determination letter. If you can convince yourself that there's probably nothing inherently wrong with the existing plan document why not see if your client wants to amend and restate on a PPA pre-approved profit sharing plan document and go on with life? If your client wants review by ERISA counsel that's certainly an option.

Good point, our document provider has hard wired the retroactive effective dates so all we have to choose is the effective date of anything that's changing.

It is a defined contribution plan, the ERD seems to be meaningless so I'm dropping it from the PPA restatement, thanks to all who replied.

Is an Early Retirement Date a protected benefit or can it be deleted without any concern? Does it matter if the ERD is effectively "meaningless" in that it requires 6 years of service (full vesting) and doesn't provide any distribution option not otherwise avaialble in the absence of the ERD?

Short answer assuming calendar year plan amending in 2014: If safe harbor election in effect for 2014 or if you're not making any substantive changes you want effective in 2014 use 1/1/2015 If not safe harbor for 2014 and you're making substantive changes you want effective in 2014 use 1/1/2014

Other than qualified replacement plan to reduce reversion penalty are there other creative techniques to reduce/eliminate reversion for a terminating 1 man plan? I've heard mention of a technique to purchase and distribute a J&S annuity which soaks up more assets than a lump sum cash distribution? Thanks

Minimum wage applies to the gross pay before elective deferrals (and payroll taxes), not after

I know a sale of an overfunded DB plan can be problematic but does anybody have an underfunded plan (preferably in Virginia or mid-Atlantic)that would like to talk? Are there still "brokers" out there trying to do these deals? Thanks

Have a PT where the plan paid fees to a party-in-interest/disqualified person. Fees are going to be restored to the plan. TPA preparing the 5330s is saying the amount involved is the lost earnings on the fees (as if they were a loan to the DP) while I contend the amounts involved are the gross fees paid. Am I wrong? Thanks

It's a one-participant DB plan so the only party hurt would be the debtor.

Yep, I'm talking up EPCRS as the likely alternative to IRS disqualification but that guts the Trustee's opporutnity to reap her big windfall commission.

Since no one else has responded I'll offer my suggestion to submit 3 VCP applications and not muddy the waters with trying to amend first. Once you've gotten the 3 compliance letters then do your merger.

If the bankruptcy Trustee can show that the plan has a disqualifying defect then the plan assets lose their bankruptcy exemption and go into the bankruptcy estate. I'm dealing with a particularly agressive Trustee who gets a commission of 10% if she can find a plan defect and I'm arguing to the Judge that even if there are petty defects even the IRS would not disqualify the plan, hence the need for statistics if available.

Does the IRS still publish statistics on the number of plans they disqualify every year? In the modern era of SCP, VCP and Audit Cap I would have to guess that the number is very low (and probably in only the most egregious and publicity worthy situations) but I need to persuade a bankrupcty judge that it's not an every day occurrence. Thanks