TAILIEUCHUNG - Lecture Employee benefits and retirement planning - Chapter 10: Installing a qualified plan

This brief chapter covers the steps required to install a qualified retirement plan. The process of plan adoption is discussed first, followed by mention of credit for startup costs. The advance determination letter is covered next. Following this, the chapter closes with coverage of master and prototype plans. | Plan Adoption Qualified plan must be legally “adopted” by the employer during the taxable year in which it is to be effective. (In contrast, SEP can be adopted up to filing deadline) Plan can be retroactive to start of the year of adoption “Backdated” adoption not effective Copyright 2009, The National Underwriter Company Corporation adopts plan by formal action of its board of directors. Similar resolution should be used by unincorporated businesses. If trust used for funding, trust should be established before end of year of adoption If funded by insurance contract, insurer must accept application for contract before the end of the year of adoption Plan Adoption Copyright 2009, The National Underwriter Company Small business employers eligible for credit of $500 per year for first three years Credit covers up to 50% of “qualified” start-up costs paid or incurred to adopt a new plan Eligible employer may have no more than 100 employees earning over $5000 Credit for Startup Costs Copyright 2009, The National Underwriter Company Commonly called “determination letter” IRS ruling that plan provisions meet Code requirements for being qualified Not required for plan to be qualified, but highly recommended If plan later found on audit to have disqualifying provision, generally too late to amend. Advance Determination Letter Copyright 2009, The National Underwriter Company A determination letter generally protects the plan from a later finding that the plan document lacked an essential provision or contained a disqualifying provision. Does not protect plan from finding of noncompliance in operation. Employee Plans Compliance Resolution System (EPCRS) programs allow correction of plan errors at all levels without disqualification. Advance Determination Letter Copyright 2009, The National Underwriter Company Retroactive plan amendments permitted under the Internal Revenue Code up to the employer’s tax filing date for the year Determination letter requests extend the time for retroactive amendments for as long as the request is pending Advance Determination Letter: Retroactive Amendments Copyright 2009, The National Underwriter Company Offered by financial institutions as inducement to use their products to fund the plan Examples: banks, insurance companies, mutual funds, various service providers Of interest to smaller employers because they reduce cost of plan drafting and installation Master and Prototype Plans Copyright 2009, The National Underwriter Company Plans are standardized, use language already approved by the IRS Master plan usually uses a single financial institution for finding Prototype plan usually does not refer to any particular funding institution or medium Master and Prototype Plans Copyright 2009, The National Underwriter Company Greatly simplifies plan adoption Fees much lower than those for custom designed plans Determination letter process simplified Document preparation services can be customized by use of checklists of plan provisions from central word processors. Master and Prototype Plans Copyright 2009, The National Underwriter Company

• Quản trị kinh doanh
• Employee benefits
• Retirement planning
• Retirement plan design
• Plan adoption
• Advance determination letter
• Prototype plan
• Employee’s retirement
• Employee benefit planning
• Individual benefits statement
• Employee discounts
• Company cafeterias
• Employee stock purchase plans
• Section 423 plans
• Key employee life insurance
• Corporate owned life insurance
• Simplified employee pension
• Salary reduction SEP
• Scheduled benefits
• Legal services plan
• Lecture Human resource management
• Human resource management
• Human resource
• Quản trị nhân sự
• Employee benefits programs
• Restricted stock plans
• Employee retention
• Strategic Benefits
• Development Benefits
• Financial Reporting
• Financial Management
• Human Resources
• Legal services plans
• Employer select
• Designing retirement plans
• Stock options
• Nonstatutory stock option
• Incentive stock options
• Alternative minimum tax
• Cafeteria plans
• IRC section 125
• Flexible spending accounts
• Medical reimbursement
• Group term life insurance
• Executive carve out
• Split dollar life insurance
• Endorsement method