Lou S.

Registered
 View profile
  • Content count

    1,759
  • Joined

  • Last visited

 See their activity

Lou S. last won the day on December 13 2016

Lou S. had the most liked content!

Community Reputation

225 Excellent

About Lou S.

  • Rank
    Registered User

Recent Profile Visitors

435 profile views
  1. Is it possible - yes but probably requires some sort of plan amendment. Are they breaking rules - maybe (probably) Are there impacts - yes if corrections are required for breaking rules. May require amendment to bring in other short service NHCE which may require contributions.
  2. Are there any participants beside the husband and wife owners?
  3. Just thinking outside the box why can they make a 5% of pay contribution now for all the eligible employees, pay them out at 100% vested as terminated employees then terminate the plan at year end and give the owner whatever cross tested contribution passed testing. Assuming the document allows.
  4. I think it's a cutback of an already promised benefit. You want to eliminate for next year fine, this year I think you already have a 411 prohibited cutback at participants have already "accrued" a right to the true up in the plan document.
  5. I agree with Bird. Is there some reason they are giving for the 415 excess. Is the Limitation Year compensation somehow defined differently in the Plan document than the compensation for allocation purposes?
  6. Legally, no you can not "terminate the plan as though it never existed"
  7. There is no de minimus rule. If the balance is under $1,000 you can send them the whole account in cash (less withholding) but need to inform them of the portion that is RMD and not eligible for rollover. If the balance is under $5000, you need to send them their RMD before cashing out the remaining to IRA (which will now have it's own RMD next year).
  8. I agree with Belgarath. 5% may or may not pass 401(a)(4) testing but I'll assume you've done the math on it and it likely works. Don't forget probably no vesting schedule on the extra 2% as you most certainly have a partial plan termination. Lastly you'll want to confirm your plan document allows for the contributions to the terminated participants under one or more of the plan's provisions. If you have a last day requirement for example you don't have a basis to allocate the 2% just yet as it isn't yet required to pass gateway even if you plan on making a larger contribution later on that might require it.
  9. If the document allows for it and you pass all related testing, they yes you can.
  10. I'd take it one step further since he only contributed $20,000 he still has $4,000 that can be recharatcerized as catch-up for 2016 if the PS allocation is "large". He can receive an allocation of $39,000 and not exceed his 415(c) limit for 2016.
  11. What is the Plan's 415 definition of compensation? Is this pay for services rendered, or post-separation severance package?
  12. What does your Participant Loan Policy say? I think legally the participant can direct the company to stop deducting the payments from his/her check. At that point the question then becomes how flexible the employer wants to be on accepting payments (as long as they are in compliance with 72(p)) and when the loan is in default resulting in taxable income to the participant.
  13. It is quite possible the Plan is drafted that way to avoid processing multiple distributions since you may very well be entitled to a 2017 contribution. Though I believe features like the one you are describing were more common in the past, they are still allowable and used by some plans now. It fact the plan can be drafted to delay payment until you reach retirement age.
  14. You could be correct. I just don't see our new Labor Secretary putting this one high on the priority list in allocating department resources to work on it nor do I see this Administration seeing a need to "finish it" any time soon. I think this is likely to to come well after any Tax Reform plans this congress is going to be working on and well after any ACA replacement plan that gets worked on as well. And for what it is worth like you I too am in favor of the rule but I'm not going to hold my breath expecting it to be done anytime in the near future.
  15. Perhaps you missed Trumps eliminate 2 regulations for every new 1 memo. I'd be shocked if the Fiduciary rule gets any traction in the next 4 years.