doombuggy

I have someone who is "arguing" with me about whether or not he needs a bond on his plan. The plan is a profit sharing plan and he has not made contributions for at least two years. The plan has two eligibles in it - the doctor (who is the sole prop.) and another employee. Only the owner has money in the plan. He feels he doesn't need a bond to cover himself. I was under the impression that he would need a bond - we file a regular 5500 and not an EZ, as the other employee is not his spouse, etc. Am I wrong? Should he forgo the bond until he decides to make a contribuiton to the plan? He currently does not have one, and I have told him to get one. Thoughts, anyone? Thanks!

Jbo, doesn't your retirement plan have an investment advisor you can speak to? If I have any questions about the market, I always ask my investment advisor. He was teh IA for the last company i worked for, but I still use him as a freelance (actually, he quit that place too and started his own firm). Even though I have been in this business since 1991, I am not an IA, and try not to give my opinion (even to my own self ) Bottom line is you need to speak to your plan's investment advisor, and not to your co-workers. The market isn't what it was in the 1980s or 1990s, nor is it what it was in September, 2001.

I agree with the statements said here. It is possbile that the company has two accounts for the plan. I had one of those at my last job, where the 401(k) portion was at Vanguard (before they stopped in August 2002) and was participant directed. The profit sharing portion, however, was trustee directed and held at Fidelity. Eventually, both accounts were held at Fidelity, but remained seperate. it is possible that this is the case at summer's company, and once the PS becomes vested, it is moved from a trustee directed account to a participant directed account. As for the SPD - I have to be totally honest here. While I have worked in the pension & 401(k) record keeping business since March of 1991, I have never, ever received a SPD for the 3 plans I have been eligible for (I am not currently eligible for my new employer, and I am lumping my last job into one employer, even though we got bought out twice, I never rec'd a SPD). I always stress to the plan administrators to give out the SPDs as required, sometimes I wonder if they ever really do, espically based on my personal experience. just my two cents.....good luck with your loan request. I just thought of something else. Most plans that allow for loans require that the loan be for at least $1,000. This means that you have to have at least $2,000 in the account. Could this be why you are being refused? It's a long shot, but a thought. Good luck.

Bump ~ anyone know? Lots of lookers - I finally got the 2001 balances to both of the plans (they later merged into one PSP), so I need to fix this fellow. Thanks!

I just found out that a client had an owner (10%) who turned 70 1/2 in June 2002. This partiicpant should have received a distribution by April 1, 2003 but did not. We need to give him back RMD's, correct? So I need to calculate on e based on his 12/31/01 bal (for 2002), his 12/31/02 bal (for 2003) and his 12/31/03 bal (for 2004). Can this be corrected thru VCP? Penalties? Thanks for your help.

The client just let me know that there was a non-res alien in the mix, when the plan doesn't allow them to be in it. By taking him out, it made the plan pass. Thanks anyway - I hope this doesn't happen again, though!

We tried every trick we knew to get this to pass. There is no passing this test. I certainly agree that the cost of processing would be more than it's worth. I don't beleive that there are check fees involved in the distributions, however. Since the partiicpant is not required to sign off on the distribuiton, no forms are really required, so that nixes that charge. I will have to calculate the g/l to the $6, which would take a little time.....

A client had me re-run a contribuiton calculation for them yesterday, and as a result, they fail the ADP test by 0.01%. This causes two HCEs to each get a refund of $3 (plus earnings, of course). Does anyone know if there is a deminimus amount for a refund, like under $10 or something? I told the client I would look into that , otherwise these two guys will get a refund check and can go to Wendys for lunch one day. I did post this in the 401(k) forum as well. Any help is appreciated.

A client had me re-run a contribuiton calculation for them yesterday, and as a result, they fail the ADP test by 0.01%. This causes two HCEs to each get a refund of $3 (plus earnings, of course). Does anyone know if there is a deminimus amount for a refund, like under $10 or something? I told the client I would look into that , otherwise these two guys will get a refund check and can go to Wendys for lunch one day. Thoughts?

Yes, this looks like the book! Thanks again!

I am trying to get my new employer to purchase the 5500 filing guide that I have used in the past, especially for help with the Schedule H. I can't remember the actual name of the book or the author. The book was in the paperback style like the ERISA Outline books, but not 4 volumes (!) and was green with yellow print on the cover. Anyone out there know the name and/or author? I have found this book to be better than the one that they offer here in the bookstore (by Corbel, I think). Thanks for your help!

We got a strange call from one of our clients this morning. While a coworker actually took the call, I am doing the research. She has a new employee who is asking if he can roll his Roth IRA into the company's 401(k) profit sharing plan. I know starting next year, you can roll your distributions from a 401(k) etc into a Roth, but i have never had anyone ask me the opposite. i want to say the answer is no to this bizare question. Thoughts?

I am doing an amended 2002 & 2003 form 5500 for a new client. I remember doing some of these a few months ago for someone else, and can swear that they get mailed to a different address than the EBSA in Kansas. Anyone know? At my old employer, we had one of those 5500 tips books. They don't have it here, and the gov't has not answered my inquiry yet (surprise). thanks!

I knew there was some period of time somewhere for p/s contributions. Thanks for your help!

I assume that the practice turns a profit, if he can pay himself 1/4 of a million (lol). I guess my safe bet is to mention to him about the "recurring & substansial" and have done with it. It's like pulling teeth to get any info from him anyway.

I have a p/s plan that has not made a contribution since 2000. Again, he is not making one for 2004, which will be the fourth year in a row with no contribution. I could swear that there is a lenth of time (ie # of years) that can go by with out a contribution, but I am having a difficult time trying to find an answer. With Sal's book in my lap, I have some regs I am looking for - Treas. Reg. Section 1.401-1(b)(2) and IRC Section 411(d)(3) - but I can't seem to find them of the web. Any thoughts? Thanks!

There are 8 active ees currently in this plan. 3 of them are HCE; the p/ter is one of the 5 NHCE.

We were just informed that a plan of our has a p/t ee who was eligible to enter the plan on 7/1/01. She works 3 days per week, so meets the 1000 yrs elig. requirement. I see that she entered the plan on 7/1/01 (at prior TPA) and was given a profit sharing contribution at year end. Same for 12/31/02 and 12/31/03. We, the new TPA, assumed that she worked f/t, but declined to defer. Earlier this week, the agent was notified that she was p/t but eligible, and he thinks she was never given the opportunity to defer into the plan. Since more than 2 years has passed, it looks like its VCP for this plan. Either way, how can we make a correction to her (she wants to defer now)? Someone indicated tht we would need to calculate the average deferral % for the plan, and give that to her. I beleive the plan also matches, so the co. would have to pay the match as well. What about earnings? Would you consider this "insignificant" enough to go the way of SCP? Thanks for your help!

Question: With the funding deadline pushed back to 10/15 for those of us effected by Hurricanes Charley, Frances, Ivan & Jeanne, along with TS Bonnie, what have you being doing with the Sch. B? We have drafted a notice to enclose with the 5500 in general (as per IRS Notice 2004-62) in regards to extending the filing deadline. Is there anyone out there who is drafting a seperate notice for the Sch. B? Or is this not necessary? FYI our shop does DB and DC work, and I am the DC consultant, but was in here posting a question in another forum, & was asked to post this thread. I hope I am getting the question over correctly! Thanks for your help!

I agree with the previous poster. I had a similar case with a 401(k) plan I was administrating a few years ago where the death was suspious and the wife was a suspect. She claimed the benes and so did the dec'd's father (on behalf of his grandchildren). We advised the clien tot freeze the account (no pay out to either party) and to get a lawyer to check it out. Good luck to you.

At my old employer (TPA), we filed a sch. R for everyone. At my new employer, we do like Archimage suggests in his first post.

Question: We have drafted a notice to send along with our 5500s as per Notice 2004-62. While all of the 12/31 PYE 5500s that we are working on have had extensions filed, we are questioning as to what needs to be sent with the 5500. My first thought is both the copy of the 5558 and the relief notice. But since the notice is a typed letter, will EBSA "miss it" when they are scanning the other items? My gut would say no, becauce the 5558 does not have a bar code at the bottom. Anyone want to get their thoughts on this topic? Nerves are a little frayed around here after 3 hurricanes in 6 weeks (no more, knock wood) and we need some opions fromthe outside world (I say that because our windows are still borded up). Thanks for your help, guys!

I was just going to post about the FAB 2004-02, but I see someone already beat me to it. Missing participants are a pain in the butt. How about trying an outside service?

IRS Here's a link to get to Notice 2004-62. Min. Funding deadline has been pushed back to October 15. See pages 2 and 3 of the notice for a list of qualifications in order to be eligible for this relief. Thank you to Sandy Turner for working over the past two weeks to get this relief from the government.

My boss lady just got off the phone with some big wigs in Washington. Sounds like they are going to do the min. funding extension until 10/15. EDIT: Sandy Turner just got off the phone with Larry Starr & Jim Holland, and look for this to come down from the gov't relatively soon.