Lynn Campbell

I thought a deductible in an ERISA Bond was prohibited, but now I cannot find the citation for that... Can anyone help? Thanks!

Same thing happened to me. Identical letter from DOL. I called and they had no record of our June 2002 response. They suggested Certified Mail for responses in future, but it does not look like that solved the problem for other TPAs...

I answer this question yes frequently, since none of my married participants take a joint and survivor annuity. As long as you have the proper consent forms, you should be fine...

Brian, what rule requires 90 day notice if we delete the QJSA rules? Would this be a Material Modification or what form would the notice take? Thank you.

As far as convincing the client to amend the Plan, I suppose they are not going to be swayed by technical terms such as disqualification. I would just tell them that these amendments are REQUIRED, in the same way that Form 5500 is required... In my mind there is no opting out of this amendment process and I would not give the client the impression that they have any choice (except to go to another provider for the amendment).

What are the filing requirements if the client has an inactive Keogh plus new corporate plans? The corporate plans total less than $100,000 in assets (husband and wife only participants) but with the Keogh added in, the total is greater than $100,000... Would this mean client should file 5500-EZ for all Plans, using old ER ID# for the Keoghs? Thanks for all input.

I think if this were my client, I would put my position in writing and stick to it. If he wants to do it his way, he will have to find a new TPA firm to work with him. Does this seem logical, or what do others think?

In similar situations, I have footnoted the 5500 form to indicate that the Plan terminated in a prior year and therefore no Schedule B is required...

Is the sole participant also the sole owner of the Employer? If so, then there is no SPD required...

See if the document permits an "interim" valuation. Some documents permit this at the discretion of the Trustee. This may be the fairest way to pay these participants off, due to the market drop since 11/30???

I do this routinely and see no alternative, given that the client has no checking account for the plan...

One of my clients is in the process of obtaining a $1.6 million bond from Travelers. I would be interested in hearing from other TPA's as to their experience with bond carriers and these new rules...

The Corbel Web site recently said that a CD to update the Form 5500 forms (including the SAR update) would be sent in "mid-March" . I just checked and the web site now has been revised to indicate the CD will be sent at the "end of March". That is the best info I have...Let me know if you have additional information. Thanks...

In my experience, the IRS agent will provide sample language. Why don't you ask for that? Good luck.

Due to EGTRRA I want to amend an existing Money Purchase Plan to a Profit Sharing Plan, for the calendar year 2002. What documentation is needed? What is the deadline, to avoid a 2002 contribution to the money purchase plan? Document is non-std. prototype with end of year employment requirement. Is 204(h) notice needed?

Robin - I would terminate my relationship with the client and send a letter explaining the reasons.

I have a client with husband and wife as the only HCEs - they have 2 young - ages 22 and 25 - children who are HCEs by attribution - both are eligible to be in the Plan, but they do not help the average benefits test. These 2 young HCES cause the NHCES to get a much higher contribution....If I exclude one of the children, how will that affect the test? Can I then show less than 100% of HCE's benefitting? Or if one family member benefits is the % of HCEs benefitting considered to be 100%?

If this client is new to you and not accepting your advice, I would suggest you decide not to accept him as a client. He sounds like the type who will always second-guess you and not what you are looking for...

It appears that the $35,000 415 limit is effective for Limitation Years ENDING in 2001. But the $40,000 415 limit is not effective for Limitation Years ending in 2002, but for years BEGINNING in 2002...I am looking at IRS News Release IR-2001-115 3rd paragraph. Is my interpretation correct? This seems inconsistent and is confusing to me.

Employee terminated during Plan Year, paid 20% vested amount = $105 , and forfeited the balance. Re-hired in same plan year, completes more than 1000 hours, and re-joins the Plan. it is time to allocate his forfeitures. Since he is back, can I allocate these forfeitures to all participants, including him? Or should I offer him the chance to repay his distribution, as provided by the plan, and hold his "forfeitures" in suspense? Thanks for all input...

I think you have to do one of 2 things: have the "Certification under IRS Revenue Procedure 2000-20" OR adopt an interim prototype document. So if you complete the current Smith Barney document, you are OK and do not need the Certification. This seems the way out of this mess, since Smith Barney cannot help you with the Certification.

Corbel addresses this issue on its web site and even has sample documents to use. See "Merging/Terminating Money Purchase Pension Plans as a result of EGTRRA". They mention that an ERISA 204(H) notice is required to merge the MP into the PS. What is the timing of the 204(h) Notice - is it still 15 days prior to the date that accruals are reduced?

The most recent documentation from the DOL on this that I can find is PWBA Advisor Opinion 2001-01A. This advisory seems to say that it would be OK to pay the expenses of the plan amendments which are required to maintain tax-qualified status. However, if the amendments include analysis of options for amending the plan from which the plan sponsor makes a choice, the expenses incurred in this analysis would be "settlor expenses" which must be paid by the employer.

If the owners and their relatives have segregated accounts, all participants must have the same opportunity, and the Plan must permit segregated accounts.

The bonding requirement is more worrisome than ever, now that the Dept. of Labor has issued regulations that provide that for small plans (less than 100 participants) the plan will need an audit by an independent public acct. unless at least 95% of assets are "qualifying plan assets" or the bond is adequate to cover the entire value of "non-qualifying assets". These rules are in effect for plan years beginning after April 17, 2001. There are additional requirements in these regs. that must be met to avoid an audit for a small plan - expanded Summary Annual Report, mainly. Another thing to worry about - we need that!