Group A contributed to their 410k plan from 1/1-3/31/12, they had pretax, roth and match. As of 4/1/12, they contributed to Group B's plan, but no longer had Roth and started following Group B's match.

Group B has their own 401k plan, they had pretax and match (but a different formula)

For the 2012 plan year, we are testing all employees for the entire year. (Group A & B) together.

My question is: Do I need to complete a BRF test for the different match formulas and the fact that Group A had roth as an available option?

Any help would be greatly appreaciated!

I have a client that forgot to collect COBRA premiums for an employee for months, just realized it, then termed them as far back as they could go. The employer is in the hole around 5K now in non-paid COBRA premiums.

Can they send this to a collections agency? Is there any case law on this?

If I meet the requirements to exclude union employees when determining the top-paid group, how do I determine which union employees are HCE's (assuming they are over 115K)?

Participant took a $50,000 loan from her 401(k) account that uses a reputable recordkeeper. The primary residence loan is amortized over 30 years & the regular payment is $137.99 each pay period. About a year into the loan the participant starts making larger payments ($600 per pay period) so that the loan can be paid off much sooner. The new, higher payment amount is consistently the same and will continue through the duration of the loan until it is paid off. The recordkeeper has been applying all of the extra payments amounts to interest & has not reduced the principal balance. The recordkeeper claims that the interest on the 30-year loan is a fixed dollar amount and must be paid regardless of if the participant is making larger payments, & they claim they have no way of rebuilding or re-amortizing the loan unless the loan is physically paid off with cash.

Aside from the TPA tracking the loan and having the recordkeeper write off the "balance" at the end once the loan is truly paid off (if the recordkeeper will allow this), has anyone else come across this situation or have any thoughts on a workaround?

Thanks for any input.

We have a client selected for audit of 401k plan by the IRS.

Auditor asked for a number of items regarding plan in August 2012. Auditor visited client in september 2012 and was given all requested items.

Auditor asked for a couple of more items in september. Client asked auditor to provide put that request in writing.

There has been no communicatiion from auditor since september.

Since that is about eight months, I am curious. If you have clients who have been audited by Irs,is this typical timing for a plan audit? What has your experience been regarding how long it takes to get a closing letter?

Would appreciate any comments regarding your experiences with Irs audit timing.

A client has a both a SIMPLE and a 401(k) in the controlled group. The SIMPLE only covers "personal employees" of the company's owner. They had been advised in the past that because the "personal employees" were not revenue-generating employees, they could participate in a SIMPLE despite the fact that the controlled group has a 401(k) plan for all of the company's regular employees. Any idea where the advisor may have gotten support for this position?

Client made a Roth IRA contribution for 2011 in February 2012. Later determined that client's AGI was too high for a Roth contribution in 2011 and recommended the client do a recharacterization of the $6,000 contribution, which was completed prior to filing of the 2011 return. Client received a deduction for IRA contribution (no retirement plan in place).

When completing the 2012 return this tax season, received a 1099-R that shows the full balance in the Roth account (some $30,000) was moved to traditional IRA.

Is this allowed? If so, how to report on the 1040? If it is allowed, I assume the client has basis in the traditional IRA (less $6,000).

Does anyone have any idea the ways cutbacks can be made on employee Cafeteria Plan elections when the plan fails the 55% dependent care test--assuming there are pay periods left in the plan year?

A MEWA that is not an ERISA welfare benefit plan can file one Form 5500 on behalf of all employers who purchase benefits from the MEWA if the MEWA is a group insurance arrangement ("GIA"). A GIA is an arrangement that:

1. provides benefits to the employees of two or more unaffiliated employers;

2. fully insures one or more welfare plans of each participating employer;

3. uses a trust or other entity as the holder of the insurance contracts; and

4. uses a trust as the conduit for payment of premiums to the insurance company.

See DOL Reg. 2520.104-43 and 2520.104-21.

I'm trying to figure out what kind of trust must be used (numbered paragraph 4 above) in order for an arrangement to qualify as a GIA. Can the trust be a taxable trust, or must it be a tax-exempt trust? For what purpose must the trust be established? It is only for accounting purposes?

Any insight or thoughts are greatly appreciated!

The plan sponsor has two plans, a money purchase plan & a 401K plan. The employee is a participant in both plans. Each plan allows for loans and the limit of each plan is one loan at a time.

I understand that the $50,000 limit applies to both plans being treated as a single plan. Participant can only take a loan of $50,000 combined from both plans (not $50,000 from each of the two plans totaling $100,000).

Since each plan only allows for one loan at a time, would both plans be treated as a single plan limiting the number of loans to one total from both plans?

Plan sponsor considering terminating an underfunded DB Plan subject to PBGC. Owners are interested in waiving part of their benefits so they can file standard termination. The issue is that each of the 4 owners owns less than 50% even through attribution. What about providing an option to one of the owners. For example, say one 25% owner has the option to purchase an additional X shares where if purchased would give that owner an additional 30% share for a total of 55%. Is the "right" to buy the shares (without restriction) enough to deem majority ownership? Would that "majority" owner then be able to waive part of their benefit?

Thank you!!

I know a greater than 5% owner must take an RMD from a SEP IRA while still working and having reached age 70.5, but can they continue to make contributions?

Are non-electing church plans exempt from spousal consent required to designate a non-spouse beneficiary?

Hopefully this is a dumb question with an easy answer (regardless of whether it's the desired answer or not):

If a plan has filed their Form 5500 late but without going through the DFVCP program, can you still resubmit under DFVCP, pay the applicable penalty amount and get in under DFVCP if you file before the DOL notifies you in writing of a late filed return? In this case, the plan has just received a letter from the IRS but nothing from the DOL. The DFVCP guidance says you are eligible if you haven't received a notice from the DOL and doesn't appear to say anything about excluding those that have already filed their Form 5500 and want to file an amended return or otherwise try and put under DFVCP.

Thanks for any thoughts or suggestions.

The general rule is that the QJSA must be at least as valuable as any other optional form of payment. The only exception is when the 417(e) factors, standing alone, cause a lump-sum to be more valuable. We've come across a plan that grandfathers a lump-sum for all pre-89 service. It's more valuable than the QJSA for the same service, but not because of 417(e)--it's because the lump sum is calculated with an early-retirement reduction factor that is twice as favorable as the ERF for any annuity form. I guess whoever drafted it took the position that the most-valuable rule simply doesn't apply to pre-89 accruals.

It looks like the most valuable rule first appears expressly in the 1988 batch of regulations that added it to Q&A 16 of § 1.401(a)-20 and to the definition of "QJSA" in § 1.401(a)-11(b)(ii). Those regs were generally effective for plan years beginning on/after January 1, 1989. To my ear, the Preamble to those regs makes the most-valuable rule sound like a continuation of a previous IRS position, and of course the statutory definition hadn't changed after REA. Has anyone heard of an option to grandfather pre-89 benefits against application of the most-valuable rule?

Cheers,

Ü

I am contemplating retirement and the sale of my TPA practice.

How is this type of business valued? I realize there are many variable including transition issues, down payment, equipment included, etc. There are firms that value CPA firms which are similar, however different. Are there a firms that are more familiar with TPA firms?

Small 401(k) allows for Self Directed Brokerage Accounts

HCE 1 Owns Business that has 401(k) and also an LLC (That lends money for business start ups)

HCE 2 (over 5% owner of ER sponsoring the 401(k) (also a trustee of 401k plan wants to take part of his SD Account in invest in LLC owned by HCE 1, which is a loan that pays interest only and then principal after 5 years.

Broker does not think its a Prohibited Transaction as the loans are to other companies.

Prohibited Transaction????

Thanks

P

Participant A was 'a key employee' for 2011 and passed away during 2011.

Participant B (also a key employee) is the beneficiary for Participant A. They are husband and wife.

Both participants were participants in the same plan.

Partcipant B rolls the distribution in 2011 from Participant A's account to his account in the current plan. Is this distriubiton considered a 'related rollover' or unrelated rollover? I am raising this question as how the rolloer will influence on top heavy testing.

Thanks.

I the past we have always file a 5500-EZ, regardless of the amount of plan assets.

Last year one of the clients forgot to send his in. No harm under 250,000.

We are rethinking whether or not we should file this client this year 2012 or just not file at all until the final return.

Also looking at the few other ones under the 250,000 asset value to determine if we should file this year or just stop filing.

What are the rest of you doing?

Thanks

Pat

We have a prospective client.

The client is a Controlled Group consisting of Company A and Company B.

Company A has over 80 employees. Company B has 20 employees. Client would like to offer a 401k plan to company A and company B but wants to provide a safe harbor match to Company A only.

The plan will pass coverage on the match with the employee count that currently exists.

Is this ok? In other words can a safe harbor plan exclude employees, other than statutory excludables?

Thanks