Lynn Campbell

Has anyone used this exemption approach recently and been successful? Will it work when the owner is the sole participant one year, but there are other participants in the prior year and the subsequent year? Thanks for your help, I am getting too many letters from PBGC on this - it makes sense just to pay the premium and file the form, but it seems to me that a one person plan should not pay PBGC premiums since technically it is not covered by ERISA, right?

What if a DB Plan has 2 participants and is covered by PBGC and then the NHCE terminates and is paid off? Is the plan then NOT covered by the PBGC for the year in which the only participant is the 100% owner? I took this approach and did not file PBGC Form 1 for that year, and the PBGC has advised me that the plan is covered because it "does not qualify for any exclusion listed in section 4021(b)." Is this correct? Thanks for all input.

I am reading about the PBGC's Voluntary Correction Program for the Participant Notices required by Section 4011 of ERISA. Are small plans (less than 100 participants) exempted from the requirement to file these Notices?

If you have Relius, you should have the 2002 forms also, right? if not, I would change the dates on the top of the form, I have done that before when I am filing a return for a short plan year and the forms are not issued yet...

I looked into this when we were doing GUST and concluded that adding fail safe makes things simpler administratively, since the correction is automatic. But it also seemed that fail safe language reduces flexibility in testing and might be more expensive for the client. I decided to leave the fail safe language out. Does anyone agree/disagree? Thanks for all input.

maybe you do not want this client back?

in order to file she will need to find the asset info back to the first filing - so I would suggest she do her best to get records back to the $100,000 threshhold and file for that year and every one after that. The investment institutions should be able to help if necessary...good luck!

in an age weighted profit sharing plan with an end-of-year employment requirement and no other contributions, I have 4 NHCEs and one of them terminated with more than 500 hours. This means 3/4 = 75% passes ratio percentage test. All participants will have the same EBAR due to age weighting. Is this OK? If there were 5 NHCEs - with 2 of them terminating with more than 500 hours - then the plan would fail coverage and a plan amendment and additional contributions would be required for one or more of the terminated employees, is that right? what are the answers if this plan is a tiered plan instead of age weighted with the same NHCE data? If the ratio test is met, must I include the nonexcludible NHCEs in the general test? If the plan fails the ratio test, then must I include all the NHCES in the general test.?

If the rules have not changed, I think the threshhold for filing the 990-T is $1,000 of UBTI - totalled for all investments in the Plan. So the fact that there is UBTI does not mean you have to file or pay taxes, if the total is less than $1,000.

Often this info is included in the K-1. If not call the LP customer service and they can tell you if there was any UBTI.

Perhaps you are talking about the requirement to include in the SAR the name of each institution holding qualified assets in the Plan and amount held - in order for small plans to avoid the small plan audit requirement, regardless of how much, if any, non-qualified assets are in the plan?

mwyatt, I do not have this situation at the moment, I was just making a suggestion. Just for information, though - many of my DB Plans are 1 person plans, so would the funding status be relevant for these plans?

In my experience I call the LP customer service each year and get the "ERISA Valuation per unit". That should suffice, right?

Would it be OK to terminate the DB Plan, have him sign consent and QJSA forms etc. as applicable and then roll the funds to a new profit sharing plan?? My understanding is that the PS Plan would not need to worry about the 415 limit on the rollover account...

I am looking for a sample notice... and would also like to know when you send out the notice (it appears the rules have never been finalized to specify when to send it out?) Thanks for all input.

You said the Pension Plan terminated in 1997. In what year did all the Pension Plan distribute all assets? Did those funds go to the profit Sharing/401k Plan?

When a Money Purchase Plan merges into a Profit Sharing Plan, what, if any, consent is required by participant and spouse? Thanks for all input!

Thanks to Dave and all those who provide helpful guidance on Benefits Link! It is an amazing resource!

all Plans subject to minimum funding = all pension plans, including Defined Benefit, Money Purchase, Target Benefit etc. some profit sharing plans also contain J & S language although it is not legally required - check the plan document.

Is a grandmother of a 100% owner an HCE? How far does the attribution go?

the answer you cite - A-3 (b) says that such contributions are "permitted to be excluded". So your balance is -0-, if you opt that way.

sorry to be confusing. they are the same to me. The 2 HCEs do not want a contribution to the Plan...

Is it OK to set up a plan where 2 out of 3 HCEs are in a classification group that gets zero contribution each year? The 3rd HCE wants to max out. There are 1-2 NHCEs. This is a C Corp. Thanks.

This is a follow up to my earlier post: I just realized that the person paid in this case had NOT terminated employment when his entire balance was rolled over. So he was over 70 1/2, but not a 5% owner and still working at the time of distribution of his entire account balance. I assume this means there is no issue with a RMD for that distribution, even though he did terminate employment later in that same calendar year (5 months later). Is this a correct interpretation? I assume all RMDs would be paid from his IRA Account? Thanks!

If a participant is due only $15 as her vested interest, is this distribution subject to the same consent rules as a $3,000 distribution? I realize it is exempt from withholding, but it seems bizarre to have all that paperwork for such a tiny amount. Is there any exception here? What is the normal TPA practice in this case? Thanks for all input!