some highlights from the ASPA conference

[Tom Poje]

the following were from the IRS Q & A.

the comments only express opinions. they do not reflect any official position, nor have they been approved or reviewed by the Service or the Treasury.

(so basically they were like opinion letters, can you rely on them for your particular situation? well, not really, but they might provide a good starting point.

otherwise excludables - Q. must the employer use the plan's entry dates or the maximum entry dates permissible?

A. use 1st day of plan year or 6 months after meeting the 1 year wait. (That is of course slightly different than dual entry dates.)

for top heavy - include receivable profit sharing contributions.

(That is different than what I ever learned, except of course in the case of a first year plan. Interesting discussion on this one!)

minimum distributions - Q under the new rollover rules can an individual rollover an amount from an IRA to a qualifed plan and delay required minimum distributions? A. YES.

small distributions - Q. ...amounts are small, many are less than $15. Is there a de minimis amount (that one can skip paying)...?

A. No, there is no de minimis rule

[R. Butler]

What was there reasoning on the top heavy question? That seems to be exact opposite of what 1.416-1, T-24 says.

[Tom Poje]

they (IRS) used an example something like

new plan 1/1/2001- 12/31/2001

contribution made in 2002

so for first year (to see if top heavy needed in 2001) you include the receivable.

now you look at 2002. balances as of 12/31/2001 would be 0 unless you included the receivable in 2002 as well.

I think the question came about because someone had a plan that would be top heavy unless the receivables were included.

this individual's argument focused on what :

the term 'account balance' (found under 416) should mean.

or rather account balance plus adjustments for contributions made after the end of the year.

The argument being the the adjustment doesn't refer to receivables - those are already part of a person's account balance for all other purposes - rather it refers to waived minimum funding deficiencies. In other words, the requirement has the effect of determining top heavy status as though the contribution required under 412 had actually been made.

I hope I haven't abbreviated the synopsis too much. I'd copy and post the question/answer from the cd rom, but not quite sure I have the right to do that, and if ASPA is going to do it anyway, then you will read it there anyway.

hope that helps.

[Guest kgsingletary]

Does this mean you should include ALL receivables (e.g. top heavy minimum)?

Here is my situation:

1st year plan - does not allow for ER Discretionary contributions - is top heavy. 3% allocated to non-key as a top heavy minimum contribution. In determining top heavy status for 2nd year - do I include the th min in the account balance? I always understood that if th 1st yr - plan is th 2nd yr.

Here is a reference that I found on the IRS website...

http://www.irs.gov.pub/irs-tege/d7002.pdf (look at pg 4 - "Line b" section)

I appreciate any comments or suggestions for further research.

[Appleby]

kgsingletary,

a typo in the URL

http://www.irs.gov/pub/irs-tege/d7002.pdf