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Ditto on previous comments. While I've been able to help some people, I have to say this board has been a net gain for me - I've learned so much over the years. There is also great comfort in knowing that other professionals struggle with many of the same issues, and there often isn't a perfect answer/solution. And, many a time when I'm chasing my own tail, someone looking at a question with fresh eyes sees the solution instantly, and I think to myself, "You darned fool, why didn't you think of this already!" Many times I have saved a great deal of time due to the helpful comments and advice available here. It's a great resource for experienced professionals, AND for newbies.

Dave: It's quite simple. Reading what's posted, and selectively responding keeps me grounded with reality in the industry. We tend to get isolated in what we do specifically, exactly how we do it (especially when stuck with legacy processes and solutions that haven't been challenged in a long time), and what our problems of the day entail. Reading here, 1) I see more of what goes on in the industry - and learn from it, and often can focus my attention on how to achieve that - or avoid it, without having to go through trial and error; and 2) I see alternatives that may be available to resolve the issues I have to deal with. This place also allows me to "flex" my academic muscle and explore things that maybe have never occurred in my career, play with hypotheticals, or hypothetical extensions of real issues, and often "debate" with others who have different experiences, perceptions and approaches to the same issues. I learn. I teach. I explore. Makes me a better professional.

I'm just spitballing here, feel free to shake me out of the tree. If the plan holds all the stock to the sponsoring company, then if late deferrals are still commingled with the sponsor's general assets.....

Hi Dave - I like the fact that I can get different views/takes on situations (including situations I may not have experienced yet) and, as others have mentioned, that you can be brought to clarity on issues where you may not have been seeing the big picture. Been doing pension administration for a long time and appreciate that interaction between posters, moderators, etc. Lighthearted moments help too every now and again although it has been hard without Mr. Poje !

Dave, As a solo practitioner in the labor and employee benefits sector since ERISA's enactment (closing on 50 years) , I've come to rely on Benlinks to: 1) keep me apprised of current issues and developments ; and 2) provide access to problems and their resolutions encountered by other experienced practitioners . I've always found that Benlinks levels the playing field between we solos and those extraordinarily competent 100 attorney firms.

Yep. Also, I've been known to use it as a research tool. For example, when I can't remember what reg to look for, i might get a useful prompt from someone else's comment(s).

Dave: Ditto on what everyone is mentioning. I've been participating for years, it is amazing the knowledge not only on day to day matters but on issues that are rarely thought of but occur. This is a go to place for brainstorming and knowledge. Thank you.

1. I like knowing that I am not the only one experiencing some of the issues presented. 2. I have been able to help out others, and others have helped point me in the right direction. 3. Daily reminders that there are very few things in our industry that are black and white. 4. I often see things addressed here before other message boards catch up them.

How important is that the right person have authority over the account?

I consider including the forfeiture approach for uncashed checks in the terms of the cafeteria plan document to be the best practice here. Cafeteria plans often provide that if any benefit checks are not cashed for a set period (e.g., the end of the plan year following the plan year in which the expense was incurred), the funds are forfeited to the plan. Uncashed benefit checks could eventually be subject to state escheat laws if they remained uncashed indefinitely. The forfeiture approach should address the issues you described above and the possibility of state escheat laws applying. There are strict rules on how to handle experience gains from forfeitures. Here's an overview: https://www.theabdteam.com/blog/fsa-experience-gains-from-forfeitures/

...and Employees get W2's.

Partners get K1s, independent contractors get 1099s, but that doesn't mean the entity(ies)/employer(s) are going it right. Who is (are) the employer(s), what is the tax structure, who are the owners, do they have earned income or compensation from the employer and who are the employees? If you have multiple employers, what is the relationship between them? Answer those questions and then you can determine the retirement plan options. And if the income reporting does not properly match the corporate tax structure, you inform them thusly and if they have no interest in proper accounting you punt, not worth the headache IMHO.

I was kind of leaning this way. Just show a big loss and allocate it currently. Although I think if there were ongoing contributions it would not yield a "perfect"' result but probably close enough.

Yes, this has become more common, especially in larger partnerships, it allows the accountant, partners, and Plan Administrator to more effectively collaborate partnership distributions, tax payments, and deferral deposits without making each event a manual process for all parties. But if that hasn't happened here, then I think I would go back to the accountant and ask him to re-envision the K-1 as if the W-2 amount had not been paid as wages, just to ensure the wage expense and employer withholding taxes are properly accounted before performing the earned income calculation to determine the Plan's considered income. Any other massaging of the K-1 & W-2 amounts as is, would be asking the TPA to make accounting/controller-like determinations. Provision of the correct income amounts is a Plan Administrator function, unless the TPA is 3(16) and that's included in the service provider agreement.

Also a FAQ which is a little easier on the eyes of some of us older folks... https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/vfcp-class-exemption-faqs.pdf

While it's been wrong for awhile, has it really impacted anything that would require this? Have any distributions been wrong?

Dave, I agree with the earlier comments too. But in particular for me, I have found this forum to be more professional. Some of the other forums I belong to come across as teenagers yelling at each other or at times providing useless information that they believe is accurate but is not. BTW, I am a group health guy so there is not as much for me here, but what is here does tend to be helpful.

Was the W-2 merely the vehicle for the guaranteed payments? Usually see this for the purpose of making it easier for the partner to make his withholding payments & deferrals. If so, ask the CPA to confirm that the amount, plus any other partner's similar payments were not double-counted as wage expenses before arriving at the business income, then use only the K-1 income as the earned income. One give-away of this is that the Withdrawals and distributions in Part II Section L are $150,000.

In addtion to what MoJo wrote (which I cannot improve on), I have made connections here with which I've been able to continue a professional relationship outside the board itself.

You're getting ridiculously nit-picky. They don't need detailed results and I'd tell them that. It's irrelevant that there are tax consequences to them. Life is full of tax consequences. Give them the adp/acp test ratios, and a phone number for Congress. Whiny HCE's should/need to focus on big pictures and the piddly tax consequences of a refund show me they are lacking in common sense. A simple explanation and tell them to get back to work is all I'd give them (and if they push, I would remember the conversation next time they are up for a raise).

You mean somebody bought an interest in a LP, say 25% of the total LP, and it's been carried at 100% of the LP value? Of course that is wrong. I imagine it is simply poor communication marinated in stupidity. Somebody buys something like that so you know they are stupid or at best had stupid advice, and the stupidity snowballs from there.

After tax contributions are..."after tax" so IMO they have no impact on compensation. No grossing up or down or whatever.

If merged (or even if not merged, but sub's employee's participate in the "parent's" plan) and if it's not a controlled group - can't tell without knowing more about the owners - then it's a MEP, with all of the attendant issues around administering a MEP. It'd be a closed MEP - but still a MEP. Check with the recordkeeper about their capabilities to handle one....

Self employed individuals have an exception to the normal payment timing rules for making deferrals to ensure they have enough earned income. I think it would be reasonable to allow an exception for this as well since it is very similar to deferrals and I’m sure you could make your case with any auditor.

I think so according to this: 26 CFR 1.415(c) 1(b)(6)(i)(C) Date of employee contributions. For purposes of this paragraph (b), employee contributions, whether voluntary or mandatory, are not treated as credited to a participant's account for a particular limitation year unless the contributions are actually made to the plan no later than 30 days after the close of that limitation year.

But only if that’s what the plan document says to do.

Is nicely as possible, tell them to go fly a kite.

That is the conclusion I arrived at, just double checking, to be sure we don't run into problems down the road by excluding the employee. Thanks, Larry.

I suggest that people just ignore anything posted by sklappy584.