Tom Poje

from Form 5500-EZ FAQs [Part II] found at http://www.relius.net/News/TechnicalUpdates.aspx?ID=518 When amending a Form 5500-EZ or filing a late Form 5500-EZ, what version of the Form 5500-EZ will a one-participant plan use for a late or amended filing? The instructions are not clear as to whether the employer uses a current year form and inserts the appropriate dates or uses a correct year form. We recommend using a correct year form and filing the amended or late filing with the IRS.

well Q-4 on the DOL list of frequently screwed up problems (or whatever) says: since you indicated its a 401(k), I guess there are no attachments. but that would be for the EZ, and now the DOL doesn't take the EZ, so I don't know how you could follow the rules and submit on the current form available when the EZ isn't really available for 2009 for E fast 2. this all sounds like a plot by Dr. Evil to get back at you. There is nothing to stop you from filing a regular 5500, but then you have the attachments, which are to be from prior years. .............................. To submit a delinquent or amended Form 5500 return/report electronically through EFAST2 for plan years prior to 2009, you must submit the filing using current filing year Form 5500, schedules, and instructions except as provided below. The current filing year forms take the place of the Form 5500 pages that would have been included in the prior year's filings. The electronic filing on the current filing year Form 5500, however, must indicate, in the appropriate space at the beginning of the Form 5500, the plan year for which the annual return/report is being filed. Exceptions to requirement to use current filing year schedules and instructions: Filers using EFAST2 must use the following correct-year schedules (that is, the plan year for which the annual return/report relates) completed in accordance with the related correct-year instructions: Schedule B, SB, or MB (Actuarial Information), Schedule E (ESOP Annual Information), Schedule P (Annual Return of Fiduciary of Employee Benefit Trust), Schedule R (Retirement Plan Information), and Schedule T (Qualified Pension Plan Coverage Information). For example, if you are filing a delinquent 2007 Form 5500 return/report for a defined benefit pension plan, you must include the 2007 Schedule B, Schedule R and all required attachments for these schedules. Attach them as pdf images to the current filing year Form 5500 (2009 or 2010 forms can be used as current filing year forms as of 1/1/2010), tagging them as "other attachments." Also, you have the option of using either the current filing year or the correct-year (2007 in this example) Schedule C. Since the Schedule E would not apply to a defined benefit plan, and the Schedule P and Schedule T did not apply for 2007 plan year filings, all other required schedules and attachments should be completed using current filing year forms and instructions. The entire filing should then be filed electronically in accordance with EFAST2 electronic filing requirements. To obtain correct-year schedules and related instructions, go to this listing and print the schedules and instructions of the form year that corresponds to the plan year for which you are filing. Important: Do not attach any Schedule SSA to any filing with EFAST2. Rather, submit the most current year Form 8955-SSA to the IRS (along with all required attachments). See www.irs.gov/ep for additional information. Important: Do not send any penalty payments associated with a delinquent filing to EFAST2. Penalty payments to the IRS or made under the Department's Delinquent Filer Voluntary Compliance (DFVC) Program must be submitted separately in accordance with the applicable requirement. -------------------------------------------------------------------------------- as a side note, though I haven't tried it, on FT William software, you would select your plan, then select the plan year, fill out the proper attachments, then the system converts everything to the e-fast 2 filing format

if the client (becasue they are computer illiterate or for whatever reason) gives you permission to 'sign' for him, then you have to attach a client signed 5500. i assume that is what is being referred to.

this is the warning message I received from the software I use. maybe your file is security locked without you knowing it. thank heavens. i would never have known how to check for this! ERROR! The file is either corrupt or is password protected. The DOL will not accept password protected files. To check if the pdf is password protected open it in Adobe Reader, press ctrl+d, and then select the security tab on the pop-up window. If the 'Security Method' is anything other than 'No Security', then you will need to have the file's author remove the security settings (only the file's author can remove security settings). Once the security setting has been removed, re-attach the file.

Just in case you don't subscribe to it, this is from the Benefits Link daily newsletter (hint: its free, contains lots of useful info, get your daily e-mail from BenefitsLink and then I wouldn't have to post things like this) http://www.americanbenefitscouncil.org/doc...enial072110.pdf

I was going to wait and see what happens. If the DOL worries about $1 from one schedule to another then we are all in trouble.

not in regrads to this error message but in general I had called in regards to another issue, was told if I can see the form on the DOL website it has been 'received', so it wouldn't be considered 'late'. it may have issues/problems, and may generate a follow up from the DOL at al ater date. my particular error was because the Sched A total differed by $1 from the sched H.

or put another way it was indicated there were 8 companies. one has 165 NHCE and 15 hces lets suppose the other 7 companies each hasve 71 NHCEs in total so you would have a total of 71 NHCEs NHCEs not benefiting at the one company. so now you have 242 total NHCE. so 165 / 236 = 69.9% so it would fail ratio % test Mike an actuary so he can 'make' the numbers be whatever you want them to be, or at least that is my understanding of actuaries.

not using that software, but if an attachment is 'password protected' then it will be rejected. the DOL has made that clear. possibly if your attachment is not in a pdf format might be another guess on my part.

are you implying your picture isn't more recognizable than your signature? not sure why the DOL didn't add something like that to the Q and A list, but it was an after-the fact decision to even allow this method of signing so maybe that's why they added the blurb where they did. interestingly enough, despite everyone's grumbling about the electronic filing, I think we actually have more forms filed this year than we have had in the past. I'll go out on a limb and guess it may be the software. we're actually getting ready to make an attempt at filing a 2010 short plan year. Suppossedly we use a 2009 form on the system, create an xml file, and then import that into the 2010 file at the DOL. sounds easy, but who knows.

put another way, what difference would it matter if you performed (on an allocation basis) lets use a simple example Company A 1 NHCE 5% contribution Company B 3 NHCEs 1 HCE 10% contribution coverage for B 3/4 NHCE so 75% now I test the allocation 3 NHCE in the rate group of the HCE, 1 NHCE not, so 3/4 = 75%, passes ratio % It will always work if you are passing coverage AND the nonelective formula is safe harbor.

but this is probably an SCP filing, not a VCP

the DOL website you use to view 5500 that have been filed http://www.efast.dol.gov/portal/app/dissem...?execution=e1s1 contains the following blurb: The EFAST2 electronic filing system allows the plan administrator to authorize a practitioner/service provider to submit the plan’s Form 5500 or Form 5500-SF. If this e-signature option was used, the name of the practitioner/service provider whose electronic signature was applied to the Form 5500 or Form 5500-SF will appear on the image of the form in the signature area above the text “Signature of plan administrator.” The practitioner is not necessarily the plan administrator responsible for the filing. ok, if you don't read all that stuff you might have missed it. so, at least on FT William, the system 'magically' replaces the name on the left side with your own name, while the right side remains the clients name. I know, you want your picture there as well, but that isn't happening at this time.

but isn't there somewhere on the form where it asks if plan was terminated and was there a reversion. if not then it sounds like a glitch in which the DOLedit check is looking for that question but cant find it.

one possibility is item 5a (Schedule I) or 13a and b (Schedule SF) was resolution to terminate checked 'yes'....

basically the folowing repeats what was said, but see also #10 IRS fix it guide. a nice handy chart to have handy http://www.irs.gov/pub/irs-tege/401k_mistakes.pdf#page=2

after a bit of a search, found the following, Q and A 62, from the 2009 ASPPA Conference The final QACA regulations require a QACA to use a safe harbor definition of compensation for deferrals and employer contributions as of plan years beginning on or after 1/1/2010. Does this also apply to SBJPA (i.e., 401(k)(12)) safe harbor plans? If a plan uses unsafe definition of compensation and then fails the 414(s)compensation test, what is the remedy? Under Treas. Reg. §1.401(k)-3(b), the safe harbor contribution under the "old style" (i.e., 401(k)(12)) safe harbor must be based on "safe harbor" compensation, which requires a definition of compensation that meets IRC §414(s) (with some limitations). If the compensation used for the employer contributions does not meet these rules, the safe harbor contributions are likely insufficient and the CODA (and likely the plan) won't meet qualification requirements. The correction would be to make up the difference in contributions using a §414(s) definition of compensation plus earnings for all affected years. By the way, the compensation eligible for deferral in a 401(k)(12) safe harbor plan does not need to be nondiscriminatory under §414(s), but only reasonable. On the other hand, deferrable compensation for QACA purposes must meet the §414(s) definition. See Treas. Reg. §1.401(k)-3(j)(1)(i), last sentence. (And you might want to change the definition of deferrable compensation in the future.)

the opinion expressed by the IRS at the 2009 ASPPA Conference (#44 Q and A) (of course, the disclaimer applies that such opinions might not necessarily reflect the actual Treasury position) you might have missed this while you were collecting toys from the different booths. IRS response: There is no gateway requirement for a general tested plan under Treas. Reg. §1.410(b)-5(d)(5), unless cross-testing is used to determine the rate group testing. The gateway rules are in §1.401(a)(4)-8(b)(1)(I).

That old TV show - Austin Space Agreed that gateway rules do not apply to coverage. but the way the question was worded, the plans were being 'cross tested'. maybe I read more into that than what was intended. If the plans are not aggregated, but only the avg ben % test (which has to include all plans/contributions) was being run on an accrual basis then I agree, no gateway.

I have never heard that being done, and since the regs already provide for corrective amendment (increasing contributions to NHCEs) as a way of correcting the problem, I have my doubts that the IRS would approve reducing (forfeiting) contributions to someone who has earned them. you mentioned testing on an accrual basis, I am assuming you would also provide the gateway minimum, if needed?

I'd add in another consideration, what is your (and/or your help's) learning curve? Having done support for Pentabs (which has evolved into Relius) many years ago, I'd say for a lot of people the learning curve is great (if not frustrating) for Relius. If you also have a talent and an ability at Crystal (Report Writer) you are at a big advantage. I've had no problem running the system, don't think I've called support in years. If you have a bit of logic, you can get the system to do some things which are not directly built into it to make your life a lot easier. but then there are lots of bells and whistles that I've never used (e.g. daily accounting) so maybe I haven't had the problems others have because I don't use those features. And my understanding you pay the price for all the extra features that other softwares may not have. I have no idea.

yes, assuming he was a participant. look at it this way. suppose the person quit 12/2709 he had been deferring 10%, his last check was $1000 and shows up in 2010 I'd assume that 100 shows up as deferrals. note that the w-2 would be for 2010, so usually (unless the plan document specifies otherwise) you count that in 2010. now, someone else is in the same position, but didn't defer. It wouldn't make sense to treat the 2 people differently. when the final regs came out the goal was to make sure such situations were speciifically outlined in the document.

comp is still comp for plan purposes (unless it falls into that category of severance pay), so is eligible for safe harbor. whether you treat that amount in 2008 or 2009 depends on the document as Mr Cline indicated. I am a bit confused as to the statement "Is it included in the ADP/ACP test" and "Are they eligible for the SHNEC". if its a SHNEC then there shouldn't be an ADP test.

interesting. using FT Williams and their edit checks produce no such warning message. I suppose if its only a warning and not a fatal error then its no big deal. on the other hand the instructions for the SF say "Enter "0" if no reversion occurred during the curent plan year."

while example 1 of the same section doesn't discuss 'negative' earnings, I'd say it is implied.(but then what do I know) the correction method simply says earnings - which could be positive or negative. actually see 6.02(4)(e) which for other corrections says ...... earnings (including losses)