maverick

Concur with comments already posted. The highest de-conversion fee I've seen is $500. Two things. 1) The de-conversion fee might be included in the engagement letter. 2) If the losing tpa's electronic package saves you two or three hours of manual entry, it's well worth the cost.

Heard someone saying under his breath at an employee meeting (as he was shaking his head): "We're getting screwed." The company was implementing a 401(k) with a very generous match that was 100% vested. As others have said, even if it's described as "free money" there are people who won't defer. (Yes, there are situations in which a person is not financially able to defer).

We now have enough welfare plan 5500 filings to justify naming someone (not me, thank you) as our "welfare plan 5500 person". I have attended Corbel's 5500 annual update several times, but I'm looking for training specific to welfare plans. I seem to remember that the firm in Kansas City with a name similar McKay Hochman (Meyer Hoffman?) used to provide this training. Does anyone know of training available for welfare plan 5500's? Thanks. Maverick

Career military (jarhead), been doing d.c. plan tpa work for 9 years. CEBS, QKA. Reside in the great city of Green Bay, Wisconsin, home of the 0 - 3 Packers. Last Sunday I napped during the game. When I woke up I asked my wife "How much did they lose by?". Maverick p.s. for Quint. SNL land shark skit: knock, knock who's there? candygram

Just thought I'd throw this out -- how about sending half the letters now and half later? Under 50 = no fee.

KateSmithPA: Maverick username selected because I was in the process of restoring a 1970 Ford Maverick. After I went through the car from the gas cap to the radiator ($$$), it still rode like a truck. Decided I'd stick with new cars.

I found a new number on the EBSA website -- 866.463.3278 (EFAST help line). Call and select option 3. You are prompted for: 1) 9 digit employer ID 2) 3 digit plan ID 3) 4 digit year in which the plan year ended Worked great, too bad the response was not what I wanted to hear (someone "forgot" to file a 5500 for the plan year ending 6/30/04).

Lump sum is defined as payment in a single taxable year, of 100% of the recipient's "balance to the credit" (whatever that means) under the plan [402(d)(4)]. So, I don't think you have a problem if 2 payments are made in 2005. This type of problem (broker making an unauthorized distribution) occurs frequently, and, other than rapping him across the knuckles with a ruler, what can you do? I guess you could change brokers. I'll let some of the technical experts weigh in on the distribution not made in accordance with the plan document. How about amending the plan to allow just this distribution? Makes sense to me, but I've learned that when you're dealing with ERISA, common sense doesn't always prevail. TGIF, Maverick

1. PA courses feature take home exams, so you figure it out. Compared to a couple graduate degrees and a CEBS, I thought DC1 and DC2 were quite difficult. Although there are probably some people who could do it this way and pass, I wouldn't recommend a weekend-prior cram session as your only preparation (like I did for a couple CEBS exams). 2. Yes. 3. All you have to pay is the exam fee. While it would be a pain to share the ERISA outline books and study guide, I guess it could be done. 4. I'll answer this with a question. If you were looking at two candidates for one opening, both with similar experience, wouldn't you give more weight to a person with a certification? I've been doing d.c. stuff for almost 9 years and thought I knew this stuff cold. During my preparation for DC1 and DC2 last year, I discovered there was a lot I didn't know. Also, I found the reading helped reinforce what I already knew. TGIF, Maverick

Don't remember the exact song title (Mrs. Jones, whatever), but I definitely remember the song. I believe it hit the airwaves in late 1972 or early 1973. For the life of me, I can't recall if Billy Paul had any other hits. Wonder if he was a "one hit wonder"? Not that this has anything to do with fidelity bonds.

This happened to me a couple years ago, and yes, it was related to the IRS' deactivating a trust ID number. Rather than make the participant wait for however long it took to get the TIN "un-deactivated" I issued a corrected 1099R using the employer's EIN.

Company name originally Smith Jones Animal Hospital. For whatever reason it was changed to Animal Hospital of Gotham. Corporate return (1120) now filed under new name, but the blank 945 sent out annually by the IRS still indicates Smith Jones Animal Hospital. Is there an IRS form I can use to change the company name associated with a federal tax ID number? I searched the IRS website and got a couple thousand hits. Thanks.

Only allow 1 loan at a time. Also, don't let participants take a second loan, then use part of the proceeds to pay off the first loan. Another dis-incentive is a high loan application fee, say $150 or $200, and require that the fee be paid by the participant (not from his or her account balance). In this case, you might want to pend the loan app until the participant's check clears. But as others suggest, the best route is to remove the loan provision.

Maybe I'm missing something here, but since when are loan payments made on a pre-tax basis?

On page 11.424 (par 5.d.3)of the 2004 ERISA Outline, Sal says: "Normally, matching contributions made to a safe harbor 401k plan must be deposited no later than 12 months afte rthe close of the plan year... However, if the plan uses the payroll period method, the match for elective deferrals and employee contributions made during a plan year quarter must be deposited no later than the last day of the next quarter. See Q&A-2 of IRS Notice 2000-3 and prop treas res 1.401(k)-3©(5)(ii)." I remember reading this when studying for a QKA exam last summer -- gee, I actually learned something.

Moe, you may have been looking at top heavy plans that allocate the 3% top heavy contrib first. So for a plan integrated at 100% of the TWB, 5.7% is reduced to 2.7%. Max disparity for a plan integrated at 80% of the TWB is 5.4%, so 5.4% - 3.0% = 2.4%.

Situation: C (LLC, taxed as a partnership) participates in a multiple employer plan. Plan sponsor (A), C, and one other employer (B) participate in the plan. One of C's partners owns 100% of A and 100% of B. A and B are a controlled group, but C is not in the A/B controlled group (confirmed by an ERISA attorney). When I'm setting up the plan document for C, is the document prepared as if the C plan is a new plan? Also, if A's plan is amended to spin off C's assets, do they come into C's plan as rollovers, transfers, or what? Subject to vesting?? I have about 50 other questions and am hoping someone who has worked through a similar situation would be willing to converse via email or private message. Thanks.

No court cases to cite, but I have a general comment. Situations like this are the reason I (tpa) do not maintain beneficiary designation forms. Things change so often and who knows if you have the most current document on file. The client is advised to keep the forms in employee personnel files. When someone passes away I ask the client for the form. I'd be interested in hearing why tpas should keep benef forms.

http://www.dol.gov/ebsa/5500main.html#section5

Survey: Has anyone ever had someone elect an annuity as the form of payment? In 8+ years at this game my answer is ZERO.

We contacted his father, mailed the forms to him, then he hand-delivered to "number one son" in jail. Figured that the forms might get lost otherwise. Distribution check and 1099-R mailed to son (at father's address).

Coverage and 5500-EZ rules aside, one way to get around the "recurring and substantial" employer contributions requirement for profit sharing plans is to establish a 0% contribution formula MPP. See Chapter 3 of Sal's ERISA outline, pages 3.6 and 3.18. Problem with rolling to an IRA is IRA's cannot have collectibles as assets.

This happened to me a couple years ago. I wrote a letter to the IRS explaining the overpayment, and a "refund" check arrived a couple months later.

You file the 5500 only (no schedules). Complete Part I and Part II (lines 1 - 5, and 8). Use feature code 2L (annuity contracts) and/or 2M (mutual funds) on line 8.

A client asked if he can termate his 401k plan, set up a simple 401k, then roll the 401k balances in. I told him no. He sent an excerpt from the "Guide to 401(k) Plans", a publication I have not seen before. Anyway, under the topic "Rollovers between simple and 401(k) plans" it says "Under Code Sec. 401(k)(11)(B)(i)(III), a simple 401(k) plan may receive only elective and matching contributions. However, commentators have noted that Rec. Proc. 97-9, which provides a model amendment that may be used by employers looking to adopt simple plans, states that no employer or employee contributions may be made to the plan for the year other than rollover contributions described in IRS Reg. 1.402©-2, Q&A-1(a). This language seems to approve rollovers into a simple plan." I checked 97-9, and sure enough, that's what it says. I'm guessing that 401(k)(11)(B)(i)(III) (also cited by Appleby in an earlier post to this thread) supersedes Rev. Proc. 97-9. Comments would be appreciated. Thanks.