Leaderboard

Some of the client meetings I've been in, they're all running out to buy ginormous (6,000# GVW) Land Rovers by 12/31. So there's that.

I would think you would use the greater of the elected flat dollar amount or the auto-escalated percentage, computed each pay period. For example, it's the participant's 2nd year so their auto-escalation rate is 5%. When they first became eligible, they elected to contribute $50 per paycheck and have not made an affirmative election for the second year. Week 1, their pay is $1200. 5% of $1200 is $60, so their contribution is $60. Week 2, their pay is $900. 5% of $900 is $45, but they affirmatively elected to have $50 withheld, so their contribution is $50. For the participants who want to defer the annual limit, they will already be making an affirmative flat dollar election each year, so the auto-escalation will not apply.

Sounds like VCP to me. Good luck.

Thank you all for responding. Sorry I haven't been on the site in a while. My attorney had to file a motion for many reasons of my ex not complying with our Stipulation of Settlement. My ex' attorney was not responding to any emails or letters in regard to the QDRO. We decided to ask the court if we could amend the Stipulation of Settlement to change the language in the paragraph with regards to the Pension Plan. We are supposed to go to court on Tuesday and this past Friday, his attorney decided to respond and is willing to amend the language to reflect the Separate interest method. Now I'm just concerned i have the proper wording in the Stipulation of Settlement to cover myself if he should die before the benefits are collected.

I think it is pretty clear that it is not deductible in 2017 if not deposited by the due date of the return. But I know of a lot of accountants that would not want to be bothered amending a return and would take their chances, and I don't see it as the plan's (or TPA's) problem as far as that goes. If there was a legitimate election to defer that much, then I think you have a legit deferral and legit late deposit issue. Amending the return to remove the deferral (and not making it up) creates a train wreck of amending the 5500 too, and in theory a failure to implement a deferral election, although in the case of a sole prop that issue is somewhat blurred.

Client has weekly payroll for staff and monthly for execs. Contributions are direct feed from payroll company, however the client still has to submit by pushing some type of button with the investment vendor to finalize the contribution. In any event, turns out that was happening only monthly in 2018 and 2019 instead of the staff processing weekly. All contributions are in and lost earnings will be calculated and deposited soon. The amounts are not large but affect ~approx. 3 payrolls out of each month. Client is under 100 participants. I assume the client should do the DOL VFCP first and then is it necessary to file the IRS VCP or is SCP ok?

If they are aggregated for coverage, they must be aggregated for nondiscrimination. You either cannot aggregate or you at least lose the safe harbor status if you do aggregate the plans. In either scenario, it is possible for an HCE in one plan to get a larger employer benefit than a NHCE in the other plan if they both defer the same percent of pay. My understanding is that at least blows the safe harbor. Try running the average benefits test for coverage, there are only about a zillion scenarios you could try. Otherwise, if they are separate lines of business, and all have the same plan year end, and have enough employees, perhaps put two employers in QSLOB #1 and one employer in QSLOB #2. Too late to do that for calendar year 2018 though. Perhaps amend under -11(g) to add participants and their corresponding QNECs/QMACs. Unless you’re trying to fix calendar year 2018, as it’s too late for that again.

You have to pay more for that one.