Mike Preston

Most?

You may do it. There is no consistency requirement.

I have never heard of such a requirement. EDIT: It looks like the message to which this was responding has been deleted. A good argument for quoting prior messages, huh? For the record, the message indicated that employment by the Mother was required before attribution to the step-son would take place. I think it is fair to say that the deletion of the message indicates that they have re-thought their position.

I don't see the concern. If it were treated as deferrals, it would be a problem, based on the contingent benefit rules, unless it were part of a 125 plan. But for profit sharing? I know of no restrictions.

I don't see why your second paragraph requires the biological parent to be an employee. How is the analysis changed if the biological parent is not an employee? What matters is whether the step-child is an employee and the step-child's deemed ownership interest. And that isn't dependent upon the employee status of the biological parent, is it?

Larry, I don't know how to state it any differently. Maybe by drawing a comparison between attribution (which I agree precludes, by definition, DOUBLE attribution) and some other word, which deals with the direct ownership in community property states. It is this community property direct ownership issue which many think is obviated when dealing with step-children. It is not.

I think it depends on whether the ownership is community. http://benefitslink.com/cgi-bin/qa.cgi?dat...8&mode=read Quick example: Father directly owns 22%; Mother directly owns 0%; Mother's son, step-son of Father, not adopted, owns 78%. Mother is deemed to own 100%. Community property rules (see link) state that Father directly owns 50% of the community which is 11% of the stock; Mother directly owns 50% of the community, which is 11% of the stock. Attribution rules state that Father is deemed to own 22% of the stock (his and Mother's direct interest); Mother is deemed to own 100% of the stock (her and Father's direct interest; along with Mother's son's direct interest); Mother's son is deemed to own 89% of the stock (his and Mother's direct interest). Note that the "non-involvement" exception does not apply in a community property situation.

Doesn't it depend on whether it is a community property state?

And to add a little anecdotal information, I once shared the podium with a representative of the DOL where this question was asked. The DOL representative made it clear that a 5500 filing was definitely required. Is the risk of a $15,000 penalty enough to encourage the filing of an almost empty 5500? It is in my neck of the woods.

It is not the client's risk I'm worried about. It is mine. No matter how remote, I don't want the client to think that, should they find themselves the victim of identity theft, that the method used to file with the DOL was a portion of the problem. That might lead them to think my firm shares n the liability, and that is something I do not want.

It depends on what question is being asked: Does the plan pass the ADP test? or Is the plan required to issue refunds. In most circumstances, the client cares about the latter. The former is of passing interest vis-a-vis trends and planning for the future.

Passes. If we want to be verbose, we say "Passes due to catch-ups."

0 is how I would answer.

It would depend on the contractual arrangement between the plan and the private insurer. It is possible, although unlikely, that the insurer agreed to provide the benefits due under the plan. It is more likely that the insurer agreed to provide the amounts identified to it by the plan as owing to the participants. In either event, proving it is wrong at this point may be a challenge.

Yes, but if the net effect is to make loans unaffordable for NHCE's it can be a violation of the non-discrimination rules vis-a-vis benefits, rights and features.

I don't think you will find one in ERISA. But you will find three references in the Internal Revenue Code; 1 of which is statutory; the other two of which are regulatory. Historically, there have been three partial reasons: 1) deductibility (you aren't concerned with that - but see 404(a)(6)); 2) 415 (the regs indicate that anything deposited after 30 days after the due date of the tax return can not be considered for the prior year); 3) 401(k) (the regs allow things deposited within 12 months of the end of the plan year to count for certain purposes). There may be others, but these are the three that I deal with most often.

It would help if this merged somehow with actuarialoutpost (or PIX, is that still around?). That was brought up there and here's what I answered: "If you argue for 401(l) you also have to argue that Social Security is a valuable benefit and people should be demanding to pay taxes on their salaries in excess of the TWB. They're not. Though the limit on pay kind of equalizes out the discrimination." This is a non-sequitur. The fact that the benefit is substantial in relation to compensation up to the wage base is completely unrelated to whether a hypothetical benefit based on compensation above the wage base would be substantial in relation to compensation above the wage base. The way Social Security works, the benefits are skewed in favor of those whose compensation is less. I would think this would appeal to your socialistic leanings. If we were to just eliminate the cap, the net effect would be to increase a person's social security benefit by the third tier of the bend point calculation. I assume you are familiar with it. If not, go look it up. Surely that is a good enough reason for a sane individual to not demand to pay taxes on their salaries in excess of the TWB. For someone who is quick to challenge the mathematical abilities of governmental representatives, I'm amazed at your attempt to bend mathematical reality in this instance.

Why is it a farce?

When John invokes the phrase "discriminates based on salary", as he does on his blog at one point, all hope for a rational discussion is lost.

Only a dodo bird would implement an age-weighted plan in most circumstances today. At the very least, it locks the plan sponsor in to much higher contributions for those who are not many years younger than the highly compensated employees. John's understanding of tax incentives and plan implementation is so woefully misguided that it would take much more time than I have available to respond to everything. Hey, John, how about picking on coverage while you're at it (you know, the 70% rules)? Or maybe vesting. Surely you think that vesting is yet another scam, don't you? Did it ever dawn on you that the benefits provided by your age-weighted plans are actually higher than the benefits that could be provided through a defined benefit plan? Could you be said to be arguing against cross-tested defined contribution plans just so you can increase your universe of clients, by selling them a defined benefit plan? I won't do that, because I understand what your intent is, and that is to complain about disparity in benefits and argue that the government should be made more efficient so that it has no desire to offer plan sponsors an incentive vis-a-vis retirement funding. Similarly, those who have a basic belief that retirement security is better served through the exact opposite, that is, the private sector, shouldn't be tarred with the marketing brush when what they are doing is true to their beliefs. But you see a scam and a scam artist lurking everywhere. Your paranoia denigrates your argument's efficacy.

Yeah, and he administers "a lot" of cross-tested plans. Sorry, I mean a lot of disqualified cross-tested plans. John article makes it clear that he doesn't understand how private sector retirement plans work. If he takes that same level of competence into his primary area of expertise, public plans, those plans would be better served to find a different champion.

I am time weighting.

So, while the participant might reasonably claim all that you have mentioned, I would think it a good possibility that a ruling would go against them. Especially if the plan argues that the integrity of the entire system is at risk if a plan is held responsible for acts that take place on property or equipment over which it has no control (the participant's home computer). Couple that with adequate disclosure (whatever that means) and I think the participant's counsel has a steep hill to climb.

Well, assuming you've done what you consider appropriate in the circumstance, you just have to decide whether you want to be a part of this or not. Perhaps your counsel talks with theirs?

If you do not submit for a Letter of Determination, I don't think there is a requirement to restate (although, one can argue that it is penny wise and pound foolish not to). If the IRS follows past practice, now that the Volume documents are available, they will require restatements when processing a Letter of Determination request.