doombuggy

The 401(k) PSP that we administer for this dentist was created on 10/1/2000. REcently one of his former employees got a letter from the SSA stating that he/she had a benefit. Apparently, the client had a plan in the past that began in 1983. I can't help him, but I wanted to steer him in some kind of direction. Yes, he should be looking for his old plan's records but is there somewhere he can turn for help is he needs it? Will the DOL help him try to recover info on this old plan to verify if this person was actually paid out and not due a benefit of $600?

that is what I was thinking too, once i merged the two in my head. The earnings and the P/S portion I have listed as a code 1 for the 1099-r, but the $210 that she had as basis - is that a code B? I still think of the "B" for beneficiaries....

My first Roth distribution! Participant became eligible to enter the plan on 1/1/2009 and elected to make Roth deferrals which totaled $210. Needless to say, she terminated in 2009, and is now requesting a lump sum distribution. She is 42 years old. Her earnings on the Roth deferrals are $30.72. Am I taxing the whole thing or just the earnings, or nothing, since the earnings are so small (assuming that only the earnings should be taxed). She does have a profit sharing allocation that will get taxed, but I wasn't sure about the Roth part, since she has not met the 5 year requirement. I am thikning that the earnings are what's to be taxed; since she has $2082.23 vested balance in the P/S, do I lump the earnings in with that and take the 20%?

The owner of our company feels that an employer can do the deferral off of net (meaning after taxes) pay, but that the safe harbor match should follow, if that is how they do it. A co-worker is arguing with her that the document allows you to exclude stuff from comp (ie deferrals, 125, etc) but not taxes. Boss says there is no guidance on this issue?

It was done on an accrual basis, as the only person who deferred was the owner, and he made the deferral deposit in early January 2009, but procrastinated until the final minute to deposit his SHM. Since he did not provide his comp, we made the assumpiton that this DR hit the comp limit. We turned out to be wrong. The other problem is they don't speak much English, and that is all I speak, so it's very difficult to get the needed info. We found out who the accountant is last month, so we are hoping to have better luck for the 2009 plan year. chc93, thanks for the link!

I finally got the 2008 census data I needed from a client today (yes, I said 2008). As it turns out, the owner made less than the broker estimated on 9/15/09, so the safe harbor match that was reported on the 2008 Sch I was overstated. We'll need to amend the return - can we still do that on paper?

This guy is the only person doing Roth, i believe. He is the only one who poped up with a problem, based on the Safe Harbor Match. The client deposited a SHM based on the fact that the participant requested 5% of comp w/h in Roth deferrals. The bookkeeper wrote back to me today that: Our accountant set up the 401K & Roth IRA in our computer. The percent for Roth is 5% after taxes not before. ??? The PDF files she sent me looks like his final paystub, and indicates that they took 5% of his net pay. The problem is, the SHM is 4% of his base pay.....

I have been working on some prelim calculations for a client, and we are having a problem with a terminated participant. This guy requested that 5% of his pay be withheld as Roth deferrals. The client provided his annual gross comp and the deferral amount; when I do the math, it come to about 4.13%. The participant's weekly gross was $1000, so 5% would have been $50. The weekly Roth deposits that were made were $41.38. Is she doing this incorrectly? We think she should have withheld all taxes off the top (the $1000), but then withheld $50 from the remainder, since he requested 5% of comp to be deferred. the bottom line is that they made too many safe harbor match deposits, because they assumed that he was deferring 5%....

I know this doesn't come up too often (at least not in our office), but we were having a discussion on it. so tell me what you think: Participant A turns 55 in 2009 and terminates on 12/1/2009. She requests a lump sum distribution. Should her code be a 2 and does she get a 10% early w/d penalty? Participant B turns 55 in 2009 and terminated on 12/1/2007. He also requests a lump sum distribution. Should his code be a 2 and does he get s 10% early w/d penalty? Our opinion of the instructions would be yes & no for A, no & yes for B, with his code being a 1. Thoughts?

I did not have to give them any info in order to view the videos that I did. There is a place where they do ask you for contact info, such as name, phone number, email - I didn't sign up for that. I am sure that is so their sales rep can get in touch with you. But I am not the person he or she should be contacting....My boss has been talking to them, and we were just interested in finding out if anyone used them or a company like that. Anyone else? Tahnks for your imput!

I just got off the phone with a client who is being confused by his broker. The broker asked me for a plan termination cost quote on this client's plan last week. When i spoke to the client today, he said the broker told him to terminate the current plan and open a new one (somewhere else, I guess). The plan is a plain 401(k) that has deferrals & rollovers. It covers the owner and his spouse, and doesn't have enough assets to have to file a 5500-EZ. Isn't there a time period that you have to wait before you can create a new plan after terminating the old one? I thought it was 2 years, but I am having problems finding that in the ERISA Outline book....

We recently heard about this company's services and were wondering if anyone in our community was using them (or a company similar). I have been checking out their demo videos on their website this week, and it seems fairly easy. It would sure save time and money to be able to send and amendment to a client via email this way. Anyone have thoughts or comments on this? If you have used this company's services - or those of a similar company - we'd like to hear your feedback. Thanks!

Four of us took test #1 in August; one took both - all passed. I really didn't think I was going to pass the one I took, but they can't take it back! My boss (who took both) said the 2nd one was easier, so I guess I will be taking that one in the spring....he got his ERPA certificate last week and immediately got new business cards!

I recently took over a plan from another administrator in our office and have sound that apparently a QDRO was done for this 401(k) plan that covered the owner and his spouse (now ex). A distribution for the alternate payee was processed in Novmeber, and apparently no 1099-R was issued for her, and no 945 was submitted. She took a lump sum and a tax check was submitted to the government. I figure we need to get her a 1099-R asap so that she can file or refile her 2008 tax return. In regards to the 945, is there another form that needs to be submitted, since it's late? As far as I know, the company has not received anything for the government about the taxes paid, but i want to try and get this taken care of asap. Thansk for your thoughts on this mess! PS: does anyone else here use TAG Data? We submitted three questions to their service last week and haven't heard back. We call and only get their voice mail. We have not received a daily update since 7/14, and our account is current.

Sounds like a revised 1099R is in order, showing the code 2. This would negate any 10% early w/d penalty, I assume.....

I had a client contact me on Tuesday about a distribution that was done in November of 2007. Apparently the participant is questioning the distribution code. Here are the facts: EE's DOB = 11/4/1949 EE's DOT = 7/13/2004 Lump Sum distribution was processed 11/12/07 with a distribution code of 1 Was the correct code used? She was 54 at the time she terminated, and it was a lump sum, as she did not elect to rollover the account balance and she did not have the option for an annuity (this is a 401(k) Profit Sharing Plan). If I researched this correctly, the code is ocrrect, due to her age at DOT. I have been waiting for TAG to get back to me since Tuesday afternoon, but I still haven't heard from them. Thoughts?

We had an ERPA study class in house for the past 10 weeks, and tomorrow is our "review" day. Our owner had bought the study sessions for when she took the test in Feb, and we have used it. I agree about the sessions not hitting on complex material; Sal's books are better for that. I am signed up for part 1. My concern is mostly on the DB questions, since I personally don't handle any of those plans. I took the practice test and got 1 of the 14 DB questions right....I have no clue how to do calculations!

I have this plan that we took over for another TPA and I only have the VS doc that they adopted late in 2005. The old TPA would have been required to amend for Final regs and for the 2006 cumlative changes, and possibly for a change in the classes, as the 2007 annaul valuation has 7 classes when the doc I have has 4. I have just emailed the old TPA for this info (and clarification on some other things), but I had a thought that I wanted to post here for other options. The client says they can't find or don't have anything else (not everyone is organized they are just trying to run their business....). Let's say the TPA did amend the plan for the required amendments, but would charge a fee to resend them (we would). If the client doesn't want to pay, where do I go from here? We need to restate their document, and will include the items I mentioned above (classes are a seperate issue), but if they were audited, what would the IRS think? We would run with the asumption that these were done previously, but we couldn't prove it. The plan sponsor is going to have to get me something on the classes. But again, I don't know where to go from here if they don't..... It's like pulling teeth to get info from this client... Thansk for your thoughts...

I report terminated participants with a balance on the last day of the plan year, the year after they terminated. So anyone who terminated in 2007, and still has a balance on 12/31/08 (for 12/31/08 PYE), gets reported with their vested balance as of 12/31/08/ If they take a distribution in 2009, they will get reported as a D on the 2009 SSA.

yes, they are under 25 ees. the carrier got back to me with a more definitive answer as "I checked with our TPA again and she stated that DFE stands for Direct Filing Entity and that we are not. " So no D. I agree with you 100% about no stupid questions, only stupid people! I actually have a mug here in my office that says I see dumb people..... Today I am tired of client who can't understand the cross-tested calculation we sent because apparently I can't read their mind! I swear I didn't have people like this when I worked in Philladelphia...thanks for your help tho!

Someone settle a "dispute" over Sch. D. We have a client that has their investments with BenefitStreet (now NextStep), and I have been trying to get an acurate balance by fund list so that I can process a schedule D. A co-worker is arguing with me that no D is needed. When i called to ask if NextStep files as a DFE, the girl didn't know what I was talking about.....she said they don't sell insurance products.... Do you guys think I should be completing a Schedule D or not? i wish I could say that a steak dinner was riding on this, but I cannot.....Thanks for your help.

Participant who terminated in 2003 turned 70 1/2 in august, so this is her first year for an RMD. The plan has a 9/30 plan year end. She elected to take an inservice w/d in May of about 2/3rds of her account balance. She was going to take the rest of her balance when the 9/30/08 valuation was completed. I have worked on the trust accounting for the plan while waiting for the employer to confirm their P/S contribution for the PYE 9/30/08. the plan, like many, has suffered losses. As a result, this EE doesn't have the necessary funds left in her account to cover the RMD. What now?

I had a client call us this am concerned about his plan assets. He's in the newspaper buisness, so I think he hears A LOT more than I do. Here's some basics: Client called this am concerned about the protection of the plan assets. This client has a 401(k) PSP and the assets are held at Nationwide. Each participant has their own account and controls their own fund selection. If a participant declares bankrupacy, all assets are protected against creditors, correct? Are the assets of the plan as a whole protected from creditors, including the federal government? This client is very concerned about rumors and discussions that are circulating in the media during this economic downturn. What are your thoughts? I hesitated to ask the client if he felt that the government would go after the assets of the plan if his business was failing, so I am not exactly sure where he's going here. I had another client call the day after the election last week to discuss changing from a 401(k) PSP to a Db or cash balance plan because Obama got elected..... Have any of you gotten calls from clients who are concerned? Thanks for your thoughts!

qua - dro. How do you say Cunard? Since we are taking about q-sounds, the correct pronunciation of this word is "Q-nard."

Yep, I have a client that has this - they have never amended the plan to do the safe harbor, but I checked with him earlier this week to see if they wanted it. If they did, I would have gottne them a definate notice to hand out asap (for 2008) and amended the plan to have it for 2008. I am getting ready to send him a safe harbor maybe notice for 2009...