(Add to Favorites | View All Articles | Resource Directory)
|
|
|
Build Credibility with Expertise
As an Investment Representative you've worked hard to build trust with your pension clients. Now, you can solidify that long term relationship with your expertise on one of the greatest fears of small business retirement plan sponsors. Next to an audit, nothing frightens retirement plan sponsors more than a notification letter from the Dept of Labor regarding inadequacies in their responses on the Form 5500 or 5500-EZ filing. Inadequacies that, if not corrected within 30 days of the date of the letter, would subject the plan sponsor to substantial fines and penalties, not only from the Dept of Labor but from the IRS as well. Following is a listing of the most common filing errors that will generate a letter from the Dept of Labor. 1. The Form 5500 Must Be Properly Signed And Dated Make sure that you have the proper signatures by the Employer and Plan Administrator and dates on the Form 5500, Form 5500-EZ, and any attached schedules that require a signature (Schedules B: Actuary; P: Trustee; and Schedule SSA; Plan Administrator). 2. The Form 5550 Must Have The Proper EIN And Plan Number (PN) It is critical that the Employer Identification Number EIN) used to identify the "plan sponsor" be the same year to year when completing line 2b of the Form 5500 or Form 5500EZ. 3. The Form 5500 Filing May Not Be For A Period Greater Than 12 Months Be certain the time period entered in Part I of the Form 5500 is not greater than twelve months. If the plan is not reporting on a calendar year basis, then input the twelve-month fiscal year period in the spaces provided. 4. Use A Proper Business Code When Completing Line 2d Of The Form 5500 On Form 5500, Line 2d, be certain to enter a valid business code that best describes the nature of the plan sponsor's business. The only business codes that are valid for use in answering Line 2d are listed in the Form 5500 filing instructions section marked "Codes for Principal Business Activity". 5 Use The Correct Plan Characteristics Codes On Line 8 Of The Form 5500. On Form 5500, Line 8, you must check box A to indicate if the plan is providing pension benefits. You must enter the Plan Characteristics Codes in the space provided beneath box A. These codes describe the type of pension benefits provided and other features of the plan. A list and description of the Plan Characteristics Codes is in Section 6 of the Instructions for Form 5500. 6. Properly Identify The Funding And Benefit Arrangements On Line 9 Of The Form 5500 Indicate all the proper Funding and Benefit Arrangements on Form 5500, Lines 9a and 9b. The "Funding Arrangement" is the method used for the receipt, holding, investment, and transmittal of plan assets prior to the time the plan actually provides benefits. The "Benefit Arrangement" is the method by which the plan provides benefits to participants. The responses on Lines 9a and 9b are cross-referenced against information on Schedules H, I, and/or A as appropriate. Be careful to attach the appropriate financial or insurance schedule (H, I, A) that corresponds to the Benefit and Funding Arrangements you indicate. 7. File All The Required Schedules And Attachments With Your Form 5500 Make sure you are filing all the required schedules and attachments with your Form 5500. If you check a box indicating that a schedule is attached, the schedule must be submitted with your Form 5500. 8. Schedule R And Distributions You must prepare Schedule R only if there are any distributions or rollovers from the plan. You must enter both the EIN of the distribution payer and the EIN of the pension plan. Part 3 is only for money purchase plans that have made single sum distributions. 9. File The Appropriate Financial Information Schedule (H or I) With Your Form 5500. Make sure you file the proper Financial Information Schedule with your Form 5500. The Schedule H is for "large plan" filers generally plans with 100 or more participants at the beginning of the plan year). The Schedule I is for "small plan" filers generally plans with fewer than 100 participants at the beginning of the plan year). 10. Complete the Participant Benefit Information on the Schedule SSA Make sure that you list all of the terminated participants with their vested balances from the prior year that still have not been paid. Starting with the 2004 filing year, sponsors are required to list participants, previously outstanding, who have been subsequently paid. When your client calls, anxious of a possible Dept of Labor fine, you can build long term credibility by taking charge of seeing the correction is made by the preparer. Better still, review or have an expert review, the Form 5500 before the client sends the forms into the Dept of Labor and save your client receiving any letter at all. Calendar year plans Form 5500 EZ and Form 5500 with related schedules are due by July 31, each year. Lawrence Groves is the Director of the small business retirement administration services for the Retirement Group with the Solo 401k administration program at http://www.solo-k.com and the special 401(k) "Free for Three" ? administration program. Lawrence comes to his clients with over 25 years as an experienced expert in plan design, administration, and compliance. Lawrence works closely with for profit, non-profit, and government agencies on 401(k), 403(b), 457, Profit Sharing, and Puerto Rican 165(e) small business plans. Lawrence can be reached at Lawrence@solo-k.com or 727.844.7000
MORE RESOURCES: News provided by Yahoo! News and Google News US Celcos Urged To Create New Small-Biz Programs - Telecomweb Apple Reworks iWork for Small Biz - bMighty.com Wage Increase Will Hit Some Small Biz Hard - NBC4i.com Online, Direct to Grow as 26% of Small Biz Ups Ad Spending - Media Buyer Planner 26% of Small Biz Raises Ad Spend, Precipitating Online Growth - Marketing Vox News $1M goes to Mass. small biz supporters - Bizjournals.com Small Biz: New shop strives for global connection - Online Athens Smallbiz Brain Presents America’s Best Companies - PressReleasePoint (press release) Six small biz tips from a CEO who flies right - BloggingStocks |
|
|
|
RELATED ARTICLES
Solving the Late Paying Customer Blues Nothing can drive a business down faster than customers who don't pay their bills as agreed. When you sell to customers on credit you are making an agreement with them. You can't win the game without a game plan It is an American dream to own a business. But sadly, according to the U. Janitorial Cleaning Service: Getting Started A janitorial cleaning service is one of the best businesses for a hardworking, blue collar person to start from scratch. Every business and every building needs to be cleaned once in a while - in some cases, many times each day. Tracking Revenue For MORE Profits The revenue history is a vital piece of your power page and you need to record that information. Keeping track of client revenues should not be done in a paper format, it should be recorded electronically. Slip And Fall Professionals; Service Businesses Since you own a business you probably have liability insurance to help you against a scam of slip and fallers. Some entrepreneurs call them slip and fall professionals. Protecting your small business network Anyone in business today realizes both the natural dependency on computers in the workplace, and also the potential dangers associated with storing important data on them. Today's business owners are constantly being reminded that their company's data is at risk by the daily reports on various news stations, or even their favorite business-related website. How to Define Business Objectives Why does a good business relationship rely on having some common business objectives?As you attend networking events, you will gradually find ways that make it easy for you to mingle and be heard. Your message will need to be clear, focused and consistent each time. Setting Prices - Pricing Your Consulting Services THE PSYCHOLOGY OF PRICINGIn case you hadn't noticed, people can react very differently when faced with the same price for a product or service. In fact in most cases, we'll never actually know what is in their minds when they consider a price and then decide to respond to it in certain way. Seven indispensible secrets to keep the cash flowing in Looking for ways to boost your cash flow? As a small business consultant, I make these recommendations to my cash strapped small business clients:1. Shoeboxes are for shoes, not business records. Expanding Franchisee Advice Franchisor expansion policies are not as simple as one might think. On the mind of every businessperson is the idea of expansion. A year from now, what will you wish you had started today? What will your business look like a year from today?If you're like most small business owners, you have many things to do and not enough time to do them. Can't you just ignore them and procrastinate your way to success?Not likely. Site Selection - Slice of Life, A Car Wash and Detail Center DownTown There is a continual trend we are seeing which I can remember participating in over a decade ago, when cities were trying to figure out how to increase sales tax revenues when the large box stores outside of town came into nearby or surrounding areas. For instance a big and easy example would be Wal-Mart. Seven Common Mistakes Made By Small Business Owners Most new small businesses won't be in business this time next year. That's the cold hard facts. Financial Dose for Business The goals of businesses have undergone much evolution from the times when entrepreneurs were content with anything that they received above the capital invested. Businesses now want to expand their reach globally, riding on the wave of technology. 10 Filler Activities for the Summer Business Slowdown Summer is a time for the outdoors, for that well-deserved vacation, and with everyone out and about, it's also a time that you may notice a slowdown in demand for your products and services. So what can you do during this summer slowdown? Well, it's a great time to do the work that otherwise never gets done during the busy business year. Small Business Owners - Form a Relationship with Your Bank Manager It's just like a marriageTo expect a bank manager or officer to play such close attention to your account that he (or she) knows when you intend to deposit money and to know when to hold back a cheque is a hopeless dream.He has neither the time nor the resources, and you can complain until your blue in the face but, in the end, you have the sole responsibility to manage your bank account. Power Tools for Business How do we keep track of our business deals?If you are only working with one or two deals, keeping track of them is a simple matter. However, most of us have far more than two deals on the plate and even more coming down the pipeline. Tips on Setting Up Your Small Business Bank Account One of the first things you will need to set up is a bank account. We recommend a large bank because:They have locations everywhereThey have longer hoursThey will probably buy out your local community bank anywayIf you are an owner/operator of a small business, you will appreciate having a Debit or ATM card for your business. One Of The Best New Business Opportunities May Be Right In Your Home - A New Daycare Business The day care industry is expanding. There are now more than 100,000 licensed child-care centers and 250,000 licensed family day care homes across the United States. The SBAs Savviest Program Forget everything you've ever heard about the U.S.
|
| home | site map | articles |
| © 2006 |