ccassetty

I really appreaciate all the helpful suggestions I've received. I have made a list of all the accountants in the phone book and intend to contact them to offer a partnership. I thought I would suggest that a partnership with me would help them compete for business they are currently losing to the bigger firms who can offer more breadth of expertise to their clients. Thanks!

mal, Could you possibly give me some suggestions as to which conferences would be best attended by this target audience? Your other suggestions are great too. Thank you so much.

Katherine, Your observations are all excellent, thanks! I sent my information packet to one gentleman who said "I think it's a great service and would be wonderful for employers....but we aren't interested." Talk about mixed signals!:confused: Anyway, I've already started modifying my materials so I can present a packet of materials to accountants. Thanks so much for the suggestion and the points about needing this service! Carolyn

GBurns What I mean is consulting only work. Writing articles and reference materials, training other professionals, plan design projects, consulting on fiduciary issues, etc. I know the work is out there, I'm just having trouble finding it. Katherine (my sister's name:) ) I have been contacting local financial institutions. I haven't tried any local attornies so far, but I suppose it never hurts to try. It's interesting you mentioned due diligence and prudence. I tried marketing a Fiduciary Liability Assessment in which I would come into the client's office and look at their policies and procedures in regards to the plan and make sure that they were protecting themselves as much as possible. However, the employers I spoke with all thought the accountant that handles the annual plan audit for the 5500 would tell them if there was anything amis and wouldn't consider another service. I, of course, try to persuade them otherwise but to no avail. Your suggestions about the CPA's seem to me to be the most promising. If they are already doing plan audits, they might be interested in partnering with me in order to offer more indepth audits of the client's fiduciary issues. I'm going to start calling the larger local firms. Thanks!

I would provide these notices because nobody ever reads the SPD, at least not all the way through. Providing a generic notice to rehires highlights that particular information making it less likely that an employee eligible for this benefit would miss out. I still think its a good idea, but as has been pointed out, isn't mandatory. As I mentioned before, if the plan administrator can't identify all rehires, the plan is in trouble. How can the plan meet the break in service rules for crediting past service and reentry if rehires cannot be identified? The fact that data is lost or just blown away after a certain period of time doesn't change those rules or relieve the plan fiduciaries from liability if the break in service rules aren't met. Even though the record keeper may not have complete records, the employer/plan sponsor certainly should. I'm happy to agree to disagree.

mbozek, Thanks for your response, I see your point, but I have to disagree with your concern about the administrator having to keep track of who is eligible should they be rehired. No one said the notice must say that a participant is eligible. I think a generic notice, outlining the eligibility and benefits could be given to all rehires and if the participant is interested and thinks they are eligible come and talk to the plan administrator who can then check into that particular participant's records. If the plan administrator doesn't know who is a rehire(not who among the rehires is eligible for the payback) the plan is in major trouble because the break in service rules are probably not being observed. Although not directly on point, I think the IRS response posted by kJohnson (Thanks!) definitely makes me lean further in the direction of providing a notice.

I'm wondering if there are any web sites out there that specialize in listing freelance pension consulting work. Prosavvy is a great site for computer experts and such, but they have almost nothing for qualified retirement plans. I'm just starting my own consulting firm (been in the business almost 30 years and have my CPC and QPA designations) and have always worked for others. I would like to sell information only and not do administration or investments. I am an excellent writer and pride myself on the ability to put technical explanations in plain English. I am also a good public speaker. Any ideas on how to generate leads? I know you think I'm ill prepared from a business perspective to start my own business, and your probably right, but I was tossed to the wolves by my previous employer and just decided to go for it rather than look for another position. Thanks for any help.

Cathy from Chicago: For the excess deferrals: First of all, you will want to make sure that excess deferrals are corrected by refund and reported on 1099-R from now on. That is the only method of correction allowable. Never allow excess deferrals to be corrected via w-2. You didn't specify exactly how this was handled. Presumably the excess deferrals were "forfeited" and used to reduce the employer's next contributions, and a check for the correct amount was given to the employees as additional pay. As to how to handle the earnings on the excess deferrals after the fact; I think I would be inclined to go back and correct the entire method of reporting the excess deferrals. In other words, instruct the employer to go back and correct the W-2 to reflect the actual deferrals made to the plan, then prepare 1099-R forms reflecting both the deferrals and earnings being distributed. These distributions should show the proper code for making them taxable in 2001 (unless the entire distribution, including earnings totals less than $100). If the earnings were distributed to the employees prior to March 15, 2002, then they should be included with the deferrals on the same 1099-R. If the earnings were distributed after March 15, 2002, then the employer owes the 10% penalty on them and a separate 1099-R would be issued showing the earnings are taxable in 2002. I wouldn't try to go back and actually start transferring money around or cutting new checks to correct this. The excess deferrals and earnings are out of the employees' accounts and the plan is where is should be, so I think correcting the reporting is good enough. But again, it is imperative that the correct method of correction be used from now on. Ineligible employees: There are several schools of thought on how to correct ineligibles. The IRS correction method of choice is to amend the plan to bring them in retroactively. Others recommend refunds reflected on either 1099-R or corrected w-2s. Since the refund method has been chosen by this employer, and the previous refund was reflected on w-2, I see no reason to switch to another method at this point. What I would do is forfeit the earnings in the same manner the deferrals were forfeited and have the employer add them to a corrected W-2 for 2002. If that’s not possible at this point, then I would code them as an excess deferral on a 1099-R. In this instance it would also be a good idea to document how the ineligibles came to be allowed in the plan and what changes are being made to procedures to make sure it doesn’t happen again.

QDROphile, It just makes life easier. Whenever you recommend more work for the employer, someone is going to say "show me where it says we have to do this". I can make a good case for it without a specific on point site, it just takes more time than saying see reg. such and such. Especially when I feel like I'm swimming up stream. Like I said, non of the TPAs I've worked for do it or recommend it.

Austin: My thoughts exactly, I just wish there was some guidance out there to back it up. Thanks for the verification. Carolyn

AJR: Read your plan document. Chances are it says total comp for the entire plan year except for those who became eligible during the year. For them compensation would be used from date of participation. Whatever the document says, you must use that definition regardless of when the match started.

Kirk, I did check but there is no mention of it.

You stated the reason at the beginning of your question. The loan must be paid off within 5 years. This isn't just a document issue, this is the requirement in the code and regulations. The fact that several other participants have also been allowed to exceed 5 years doesn't make it right or have anything to do with it. I would say that the remaining balance of the loan as of April 15, 2003 becomes taxable immediately, since the 5 year deadline would be April 14, 2003. See Q & A 4 of 1.72(p)-1. There is nothing that I'm aware of that allows participant loans to be defaulted on a group basis for administrative ease. However, I'm always willing to learn.

I have tried to research this question, but have not been able to find anything definitive. When a partially vested terminated participant is rehired, they must be given the "opportunity" to pay back the employer portion of the benefit they received so that the forfeiture account can be reinstated. The question is, what constitutes "opportunity"? Is the fact that the plan allows for the pay back sufficient "opportunity"? Is mention of the option in the SPD considered sufficient "opportunity"? Must the participant be given some sort of notice upon rehire to have the "opportunity"? Any help or cites would be greatly appreciated! None of the TPAs I've worked for have ever done a notice about this but it seems to me that participants don't have the "opportunity" if they don't know about it?!?!? Thanks!

Thats pretty much what I thought, but I wanted to make sure. Thanks, I appreciate your help! Carolyn

This might be a stupid question, but here goes. A QDRO says that the former spouse is to be treated as the surviving spouse for the participant in a 401(k) that is subject to the QJSA rules. The participant does not remarry. The participant then terminates employment. When he wants to take his money out of the plan, does he have to get spousal consent since his ex is till his spouse under the QDRO or is the ex only considered his spouse for purposes of getting the death benefit should the participant die? Thanks Carolyn:

Thank you. You make it sound so simple. Carolyn

I think I'm pretty clear on how to reduce the pool of possible beneficiaries after the participant's death and prior to the September 30 deadline, what I'm not clear on, is how to determine the pool in the first place. Example: A participant has died and has named his spouse as primary beneficiary and their children as contingent beneficiaries. Are the children in the pool or not? If the spouse completes a proper disclaimer, will the children or the estate then be the beneficiary? What if the Grandchildren are named as remaindermen beneficiaries? Let's say the participant married again to a much younger spouse, who is actually younger than the children of the participant. In the above scenario, if no one disclaims or is paid out prior to September 30, will the age of the spouse be used since he/she is primary beneficiary or will the ages of the children be used since they are older? Same question pre-death for determination of the participant's minimum distribution? Thanks so much! Carolyn

In reading USERRA and all the guidance I could find on the calculation of compensation to be used to determine the amount of contributions to which an employee is entitled under USERRA, it seems to me that the "theoretical" compensation must take into consideration increases that the employee would have received (i.e. annual performance review and salary increase) had he/she remained employed. Everything I read sort of hints at this, but doesn't come right out and say it. I would like to get confirmation that this is correct or reassurance that this is something we don't have to worry about. Thanks to all who respond.

Thanks for the reply. I have checked with someone here who is pretty knowledgeable about Word and Access and she thinks it is doable. Thanks!

We have developed our own volume submitter document and have received our opinion letter. We want to develop a searchable data base to automate its production. Does anyone have any suggestions on the best way to go about doing this? We know that there are folks out there with documents and data bases already to go, but we don't want to scrap our document to buy theirs, at least not without checking out the alternatives. Thanks for any help!