Eve Sav

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About Eve Sav

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  1. I have read 2005-11, but the issue is summer break, which is more than 5 weeks. IRS is taking position that if they are not taking classes while working over the summer they are not exempt from FICA withholding, and therefore no longer meet the definition of student for purposes of universal availability. The Colleges in question (both being audited by same IRS person) ARE withholding FICA tax pursuant to 2005-11, but are not offering the students the option to make 403(b) deferrals. The amount of summer earnings are small, and the students working during the summer are most unlikely to make elective 403(b) deferrals even if offered.
  2. IRS auditor is telling our client, a large college, that the students who work in the summer and continue to be excluded from 403(b) Plan while wages are not exempt form FICA must be offered participation in the Plan for elective deferrals, and is requiring make up missed 403(b) deferrals. This impacts more than the year under audit (2014). All students were enrolled full time in spring and fall semesters, and majority have wages that will result in make-up contributions of <$75. Fear if we agree to correction, they will go back to 2009. They will correct practice prospectively (in summer 2017). Has anyone else had this issue raised? We have had DOL and IRS audits of other colleges where this issue was never mentioned.
  3. Designing a NQ Plan to replace a frozen DB benefit. Client is asking us to get information about personal assets of the participants to off-set the benefit that will be funded by company contributions to NQ Plan. We understand the logic behind reducing NQ benefit by social security, or other benefit programs of the employer. However, we think is is unusual to essentially penalize those who have aggresively and histroically saved for themselves, and have the company make up for the bad habits of those who have saved nothing or little personally. Looking for some input from the benefits community about whether any of you have ever seen such an offset, and how common these may be. Anyone??
  4. Does anyone know whether there has been any guidance on whether the Annual Fudning Notice is required in a terminated plan where all assets have been distributed and Final 5500 is filed?