Sully

Make the check payable to U. S. Treasury and mail with the 8109 to: Financial Agent FTD Processing P. O. Box 970030 St. Louis, MO 63197 Also, don't forget about any required state tax withholding.

I just had a broker call and ask if I would set up a 401(k) plan for a one member LLC that wants to terminate his 412(i) plan and roll the proceeds to the newly established k plan. The assets to be rolled over consist of a paid up whole life policy and an annuity. There are no other employees of the LLC and there will not be any other employees in the future. Also, there will not be any future premiums on the insurance policy. Does anybody see any problems with this? I have no desire to work with 412(i) plans but am concerned I may end up getting involved with this one in a round about way.

Although I do not have a definition for what is “as soon as administratively feasible” I am sure I will ‘know it when I see it’. Nonetheless, I recommend paying any distribution as soon as you receive the appropriate distribution paperwork. If you need to process another distribution, then so be it. With the way the market has performed recently I would hate to have to explain to a participant (& possibly his attorney) that we did not process his distribution 10 months ago because we did not want to have to do it twice.

I have had plan sponsors that were concerned the discretionary match language in the SPD might mislead the participants into thinking they were going to get a match.

Employer. It was really a question for their payroll company but I thought it would be the type of information that would be readily available either through my reference material or an internet search. No such luck.

Greetings, Are there any states that do not allow deductions for employee 401(k) contributions? If so, is there a list out there somewhere? I have searched and searched but cannot find anything. Thank you.

I recommend looking at Section 4.3(f). Section 4.3(b)(2)(iii) may also apply.

http://benefitslink.com/boards/index.php?showtopic=40717

I think the numbers got transposed. It should be Rev Proc 2008-50

I am the TPA on a PSP that is scheduled to have their 2006 plan year audited by the IRS. The plan sponsor is a member of a controlled group of corporations (2 companies) and both companies participate in the plan and make profit sharing contributions. I just realized that the plan document does not provide for participation by one of the companies. The document says an affiliated employer may participate in the plan if it adopts the plan, but it does not appear that this was ever done. Also, the document says the sponsor is not a member of a controlled group (which is obviously incorrect). Anybody know what kind of sanctions we might be faced with? Also, is there a way to include the other company in the plan at this point in time? Thanks in advance for any assistance.

Partner in an LLC who is over age 50 made 401(k) contributions of $10,250 during 2007 from his guaranteed payments. LLC ended up with a loss for 2007 so he has no earned income and a 415 excess contribution. Question: Is this employee eligible for a catch up contribution? Should we refund $10,250 or $7,250? Thanks in advance for any insight.

I just had to research this issue today and the year in question was 2004.

Unless the plan is top heavy, which would require top heavy minnimums to be made.

I think most 'party lines' today begin with 1-900-

Client has a Volume Submitter 401(k) plan with cross tested language. Plan has last day language for the profit sharing contribution with an exception for termination due to Early Retirement, Normal Retirement or Disability. Plan document provides for Doctors in one group and all other employees in the other group. One of the doctors in the group left the practice due to Early Retirement so he would normally be entitled to share in the profit sharing contribution for the year. Would it be possible to amend the plan before year end to establish a separate group for the retired doctor and elect to not fund that group?

Example 25 under the above mentioned section says to correct the failure under SCP by amending the plan.....and submitting the amendment to the Service for a determination letter. Instead of doing the amendment and submitting for a determination letter you may want to look at refunding the employee's contributions and making him whole outside of the plan.

Maybe I'm missing it, but I do not see how you can interpret it to allow for rounding. I would politely ask him to show me in the regulations where it says you are allowed to round. I would be curious as to what he comes up with. Also, 60.15% is still greater than 60.00%.

IRC 416(g)(1)(A)(ii) - any defined contribution plan if, as of the determination date, the aggregate of the accounts of key employees under the plan exceeds 60 percent of the aggregate of the accounts of all employees under such plan. I think that covers it. No mention of rounding.

Before you do anything else you might want to take a look at Freeerisa.com to see if they have a record of the filing.

Just be sure to complete the amendment and notice by November 30! I agree the notice should be done by November 30, but couldn't they do the amendment as late as December 31st?

Typically, the 1 year lookback applies to the $50,000 limit, although it could apply in this case. You will need to read the Loan Program to confirm the limits for your particular plan. Also, be careful if you are considering a 'replacement loan'. Their limits are a little more involved and may limit how much can be borrowed.

I do not think you round. It is either greater than 60%, or it is not. IRC 416(g)(1)(A)(ii) - any defined contribution plan if, as of the determination date, the aggregate of the accounts of key employees under the plan exceeds 60 percent of the aggregate of the accounts of all employees under such plan.

I think that may be a reasonable approach based on the guidance I have seen. I had a similar case recently with Liberty Funds. Fortunately, I was able to dig up data on who was affected and allocate accordingly. If you have not done so already, you may want to take a look at Field Assistance Bulletin No. 2006-01 http://www.dol.gov/ebsa/regs/fab_2006-1.html The information under 'Plan Fiduciary - Allocation among participants and beneficiaries' should be most useful.

I would also check under freeerisa.com to see if they show the form as being filed. There have been some cases recently where the IRS has said the 2004 return was not filed when in fact it was.

I don't know who is going to throw out the first ball (probably John Elway or Kevin Millar), but my money is on Jonathan Papelbon throwing the last one.