maverick

I don't use ftw software these days, but I've been told to follow these steps: Go to Portal Setting, Email Settings and turn on the Confirmation Emails. The confirmation email would go to the Master Admin user if there are no users assigned to the “Review/Assign/Detail Status” grid. If could be that the Master Admin User is already getting emails and not letting you know. Maverick

I ran into this same situation several years ago, except that the TH issue was discovered during an IRS audit of the plan. After hearing that the company would go out of business if it had to contribute the top heavy minimum, the IRS examiner allowed the plan to return the key deferrals. And no, I don't remember the auditor's name.

Although not related to the electronic versus 8109 fling issue, I'll just throw this out there because I've run into it before. Some banks (even the plan sponsor's bank) will not accept withholding and 8109 forms. I read somewhere (could have been the instructions for the 8109) that banks do not have to accept the withholding. Maverick

I've also noted that the final return block is not checked on final returns. free5500.com does have an 'x' in the final return of the same return I just checked on freeERISA.com. Go figure. Maverick

On 1/1/09 Employer X (3% nonelective safe harbor plan, plan year runs 7/1 to 6/30) is merging into Employer Y [non-safe harbor 401(k) plan, calendar year plan year]. Employer X's plan will into Y's plan on 1/1/09. If I am reading 1.401(k)(3)(e)(4) correctly, this merger would be similar to a termination and Employer X's plan would maintain its safe harbor status (as long as the safe harbor contribution is made through 12/31/08). Am I on the right track here? Any other options out there, like merge the plans 6/30/09? Recommendations or suggestions would be appreciated. Thanks. Maverick

Plan document client terminated his plan and is attempting to roll the money over to an IRA. Current custodian is insisting that employer provide a copy of the IRS letter that assigned a trust ID number. His accountant prepared and filed the SS-4, but did not retain a copy of the IRS letter or any other documentation to "prove" that the TIN is valid. Is there a process for doing this, possibly similar to getting a copy of an IRS determination letter? Thanks. Maverick

If the employer insists on posting the pre-funding into participant accounts, here's another idea: Set up an additional profit sharing source (current year contributions) with 0% vesting. For all those who meet the hours requirement, transfer the pre-funding and earnings into their "regular" profit sharing account. The pre-funding account is forfeited for anyone who does not work 1,000 hours. I'm sure someone will say that this is a bad idea (can't remove money from a person's account once it goes in), but it's a way to do what the ER wants. I won't even comment on how it's poor plan design to pre-fund and impose a 1,000 hour rule (and/or last day requirement) for employer match or profit sharing contributions, because it's already been said many times. Maverick

I am in the same situation as Mr. Burns. Sometimes I return to the site after 10 minutes and have to log in, other times I come back after several days and the system recognizes me. Maverick

ER terminated d.b. plan and will deposit excess assets in the 401(k) plan (a qualified replacement plan). They are being told that amending the 401(k) prototype to allow deposit of excess d.b. assets will cause the plan to become an individually designed plan. I don't have a problem with that. However, they are also being told that once the d.b. assets move into the 401(k) plan and are allocated as an employer non-elective contribution, the plan can be amended to "discontinue" the d.b. deposit amendment, and thus go back to reliance as a prototype document. I looked at the IRS det ltr guidelines, Tripodi's ERISA Outline and prior benefitslink posts and found nothing on this issue. If anyone has had this situation come up in the past I'd appreciate comments or references. Thanks. Maverick

Http://www.planeterisa.com/ used to, but I tried the link the other day and it's dead. Not sure if they are 'out of business' or what. Maverick

Early retirement benefit for a school district includes employer contributions to 403(b) plan for 5 years. Are there any reporting requirements? Someone came up with the idea that, since the early retiree has no compensation during this 5 year period, a W-2 should be issued showing zero compensation, but with an "X" in block 13 indicating participation in a retirement plan. The W-2 instructions indicate that a person is an active participant in any year in which an employer contribution is made to his/her account. Maybe nothing has to be done, so any comments would be appreciated. Thanks. Maverick

Page 2 of the 2007 instructions for 5500-EZ (who may file form 5500-EZ) indicates that an EZ can be filed if 5 conditions are met, one of which is the plan does NOT cover a business that is a member of an affiliated service group, controlled group of corporations, or a group of businesses under common control. It goes on to say that if the 5 conditions are not met, "...file Form 5500 instead of Form 5500-EZ.". There is no exemption from filing a 5500 if the assets are < 250k. Sounds to me like a 5500 is required. Maverick

I haven't obtained a trust ID number online for a couple years, but here's a new wrinkle. Plan was established late last December, effective 1/1/07. Using the IRS online EIN system today, I obtained a TIN. Here's an excerpt from the IRS letter: "Based on the information from you or your representative, you must file the following form(s) by the date(s) shown. Form 945 2/28/08. After a review of your information, we have determined that you have not filed tax returns for the above-mentioned tax period(s) dating as far back as 2007. Please file your return(s) by 2/28/08. Penalties and interest accumulate from the due date of the return until it is filed." Okay fine, but the 945 instructions say: "You are not required to file form 945 for those years in which you do not have a nonpayroll tax liability." Knowing how the IRS has been issuing bogus missing 5500 letters recently, I figured that it would be best to just go ahead and file a 945 showing all zeroes. The alternative, to not file based on the 945 instructions, could result in an IRS follow-up letter and more work to fix the IRS error. Just an FYI in case other people encounter the same problem. Maverick

If you can believe this link, no. http://www.govtrack.us/congress/bill.xpd?bill=h110-3361 Maverick

No, they are not doing this with specific participants in mind; contributions would be made for anyone eligible (not just a retiring superintendent, etc.). Thanks.