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Just because some TPA's are big and popular, doesn't mean they know what they are doing. Some of the worse work comes out of the biggest firms because they need to hire a lot of people and they don't have time to train them. Many big TPAs are famous for low pricing and you generally get what you pay for. Maybe just remind them that there is a potential $100/day/person fine for ignoring the 204(h) Notice. This is an old ASPA ASAP, but I think it is still valid. https://www.asppa.org/sites/asppa.org/files/PDFs/GAC/ASAPs/03-07.pdf "Substantial excise taxes under IRC Section 4980F may apply regardless of whether a failure to provide a timely Section 204(h) notice is egregious ($100 per day per applicable individual)." If their "sign and retain" email doesn't even mention the 204(h) notice, seems like a big liability risk on their part. Should you work with them is up to you. Your loyalty should be to the client, not the referral source. I always say, don't let their problems become your problems. If you want to keep working with them, inform them of the issues (go to the leadership, not the person who sent the email) and make sure your clients do things correctly.

Do your actual testing with a definition that does pass 414(s) then, even if the allocations were done with the comp definition you were given. If you can pass with gross 415 pay, for instance since that passes 414(s), then you should be in the clear.

Yuck. Tell him to roll his own money to an IRA and make the investment and not taint the plan.

Might the two statements you describe both be good enough? Each seems to involve a choice. The statements differ in which choice results if the user omits to specify its choice.

If there was only one local taxing authority that would require withholding of local taxes on retirement income, my guess is it would be New York City. They do tax retirement income above a certain threshold ($20,000?) and they do expect the taxpayer to make estimated tax payments. Pennsylvania is another state that allows municipalities, boroughs, and townships (generically termed "political subdivisions) to assess earned income taxes (EIT) and local services taxes (LST). Taxes are calculated based on place of residence AND work place. Withholding is mandatory, but fortunately only wages are included in calculating the EIT. The LSTs commonly are per capita amounts. The biggest challenge for the entire system is getting the tax withholding credited to the correct taxing authority. I agree that recordkeepers do not calculate local taxes based on a local tax formula (there probably is an exception), but some recordkeepers alert a participant that a taxable distribution may be subject to state and local taxes and the participant may want to increase the withholding from their distribution. While not directly on point with local taxes, Vanguard has a detailed summary of state tax withholding rules (attached). Vanguard - Applicable state tax withholding for retirement plan distributions.pdf

From the regs. Refinancing does not qualify as a principal residence loan. Prior Q&A also states requirement that loan is used to acquire the principal residence. Q–8: Can a refinancing qualify as a principal residence plan loan? A–8: (a) Refinancings. In general, no, a refinancing cannot qualify as a principal residence plan loan. However, a loan from a qualified employer plan used to repay a loan from a third party will qualify as a principal residence plan loan if the plan loan qualifies as a principal residence plan loan without regard to the loan from the third party. (b) Example. The following example illustrates the rules in paragraph (a) of this Q&A–8 and is based upon the assumptions described in the introductory text of this section: Example. (i) On July 1, 2003, a participant requests a $50,000 plan loan to be repaid in level monthly installments over 15 years. On August 1, 2003, the participant acquires a principal residence and pays a portion of the purchase price with a $50,000 bank loan. On September 1, 2003, the plan loans $50,000 to the participant, which the participant uses to pay the bank loan. (ii) Because the plan loan satisfies the requirements to qualify as a principal residence plan loan (taking into account the tracing rules of section 163(h)(3)(B)), the plan loan qualifies for the exception in section 72(p)(2)(B)(ii).

They are one employee. If their Company B wages are excluded you will have a 414(s) tests on compensation I believe. No? I haven't run into this particular situation but it looks like you have 3 groups of employees when running your tests. (1)The employees of ONLY A - who are fully benefiting. (2)The employees of BOTH A & B - who are partially benefiting. (3)The employees of ONLY B - who are not benefiting. Are there any HCEs who are in (2)?

The Relius document has a section that you can choose to exclude the seasonal, part time, temporary, etc.... however, you must take into consideration that if they work 1000 hours the employee would become eligible. this is in addition to the 90 days entry requirement. I don't know what document you are using but read it. maybe you have a similar available option. I feel you might be too late to implement this year.

There are some US cities that have a fixed percent withholding, which is done at the payroll level, probably with no corresponding "tax return". Just my guess, those local statutes refer to wages, or salary, or overtime, or earned income, or W-2 compensation, or something similar. That is, it's a tax on wages. I would be surprised if any referred to payment from a qualified plan. BTW, the original question appears to assume taxation might apply to a periodic distribution from a DB plan. If that is subject to taxation, why not some taxation for distribution from a DC plan? And how would such a statute deal with amounts that are rolled over? Or made due to death or disability?

There is not enough common ownership to create a controlled group. So, the question is, does there exist an affiliated service group? A, B, and C are all automatically service organizations because they are in the field of health. There is common ownership between A and C and between B and C. The questions you need to ask are: Does A regularly perform services for C (or does C regularly perform services for A)? Are A and C regularly associated in providing services to third parties? If the answer to either question is yes, then you have an affiliated service group. There are no quantitative tests to answer these, they are facts-and-circumstances determinations. If your client is unsure, they should hire a qualified ERISA attorney to provide an opinion. Even if an affiliated service group does exist, that does not necessarily mean that A's plan needs to cover the employees of C (or B), it just means that those employees need to be included in testing. If A's plan could pass testing without benefiting those employees then they do not need to be covered.