This is a 401k plan that allows immediate eligibility for 401k deferrals and a 1 year wait for the employer profit share. Two employees were hired in Dec. 2012 and received their first compensation in Jan. 2013. For the 2012 form 5500 are they considered active participants since they are eligible, even though they could not have deferred due no compensation received? I think they are included as active participants, but the software I use is not including them.

I have a Defined Benefit Plan where the Plan Sponsor will be starting significant layoffs. We completed an AFTAP for the 2013 Plan Year and the funded percentage was over 80%. This plan allows for lump sum payments. The assets in the Plan are not sufficient to pay out all benefits and the Plan Sponsor does not have the dollars available to fully fund the plan for termination.

As employees are terminated they will have the right to request a single lump sum payment of their benefits. Since we know that eventually everyone will be laid off, the assets in the plan will run out before all payments can be made.

Does anyone have any suggestions!

I'm unable to locate any definitive source to answer this question.

What is the deadline for employee contributions to a SEP-IRA for any particular tax year? Note I'm not referring to contributions made by self-employeed individuals as those are considered Employer contributions and are reported in Box 8 of Form 5498. Also, I'm not referring to elective deferral contribution to a SARSEP which are also reported in Box 8 Those deadlines seem clear to me.

What isn't clear is the deadline an employee has to make a contribution to their SEP-IRA for the previous tax year. These contributions are reported in box 1 of the Form 5498 and following the annual dollar limit of §219. From my understanding, they are treated like traditional IRA contributions. Because of this, it seems to me then that logicially the deadline to make contribution for the previous tax year would be April 15th (just as one would do with their regular stand alone traditional IRA).

However, every source I reference simply states that the deadline to make SEP contribution is tax filing deadline plus extensions with no seperate mention being made (or at least acknowlegement of) that the deadline for box 1 employee contributions made to a SEP-IRA still needing to follow the April 15th deadline of a traditional IRA.

Just hoping someone can confirm and possible cite a source so I can be 100% confident on this answer.

Does anyone know offhand why the IRS requires 20% withholding off of plan distributions that are eligible for rollover vs 10% on IRA distributions? Thanks

Anyone aware of a requirement to use only the last 4 numbers of a participant's SSN on statement and if so where that requirement is? Coming up w/ nothing so far so maybe there is no requirement to do so, but rather a best practice?

Does anyone know if there are any requirement to track in-service rollovers to IRA's? It seems I remember something about this from a long time ago.

This must be the month of problems for me

Long story short.... A rather large deferral for the owner of a plan sponsor for December 2012 was never deposited in the trust account due to a perfect storm of miscommunication between the payroll company, recordkeeper, and plan sponsor. Deferrals for all other participants were deposited and invested in a timely manner for the month. The deposit still hasn't been made. What is the best course of action to correct this issue? Thanks

I have a 9/30/12 401k plan that just finished up their audit and 5500 for that plan year. The plan converted to us in Sept of 2012. The plan makes monthly non-elective safe harbor contributions. During the audit it was discovered that the plan did not make their Aug 2012 contribution. Lost earnings are being deposited into the participants involved. Does a 5330 need to be completed also?

Suppose you restructure a safe harbor profit sharing plan for testing purposes. Also suppose the plan excludes HCEs from receiving safe harbor contributions (to minimize the required contribution in a bad year).

The owner and most other HCEs are in component plan A: the benefits-tested group with enough of the youngest NHCEs to pass the ratio percent test. The nonelective portion is tested for nondiscrimination by cross-testing and by imputing disparity on the regular PS nonelective allocations (can't impute with the SH amounts).

The owner's son however, is in the component plan B: the contributions-tested group with all the rest of the NHCEs where the intnet is that they all receive a total nonelective allocation of 5% of pay (5% PS for the son and 3% SH plus 2% PS for the others). The owner's son's wages are not over the taxable wage base. If component plan A imputes disparity, then imputing disparity in component plan B results in a 10% allocation rate for the son and 7% for the NHCEs (fail).

Assuming there is no other integrated plan sponsored by the employer and assuming the son is not a self-employed individual, when imputing disparity, must the entire plan impute disparity, or could just one component plan impute disparity and not the other?

How do you read 1.401(a)(4)-7(d)(2) for this?

IRS Notice 2001-46 provides that non-electing church 401(k) plans are not subject to regulations of 401(a)(4), 401(a)(5), and 414(s). The notice also states that such non-electing 401(k) church plans would aslo have to be operated in accordance with a reasonable, good faith interpretation of these statutory provisions until such further notice is provided.

Therefore, is it correct to say that a non-electing church 401(k) plan could use a non-safe harbor defintion of compensation as a result of being exempt from 414(s) testing, and allocate employer contributions that discriminates in favor of HCEs, but not subject to general nondiscrimination rule of 401(a)(4) and special nondiscrimination rules of 401(a)5)? However, the plan would still be subject to ADP and ACP testing.

During a random audit, the employer was asked to provide plan information for 2010, 2011 and 2012. Anomolies turned up and the employer knows that they have to be corrected, including any additional contributions, earnings and penalties. Then the IRS said that they would like information going back to 2006 -- 7 years ago. I thought that 6 years was the limit, unless they can make a case for fraud. Is the 6 year limit just a guideline that doesn't really mean much?

403(b) large plan filed 5500 for 2010 and 2011 but not 2009. I dont know why. I believe they must file 2009 under dfvc and pay 2000 but thought i might check for other opinions?

My senior memory has begun to wane. As such, I continually look for ways to protect myself from myself. In this regard, I recently changed my passwords to "incorrect." That way when I enter the wrong password, a system message appears, "Your password is incorrect."

Any opinions on whether if you want to transfer excess assets from a DB plan to say a profit sharing plan under IRC 4980(d)(2) do you need to file a Form 5310-A (advance 30 day notice of transfer or assets or liabilities) with the IRS ?? It's not clear to me from the instructions for this form if this type of the transfer is of the type that triggers this kind of filing requirement.

Plan allowed a participant to have an in-service withdrawal before his time. (allowable at 2 years of accumulated funds or 5 YOP, but both only from 100% vested sources). participant was 80% vested at the time.

EPCRS seems to say that we could fix this by:

1) adopting retroactive amendment under VCP; or

2) have the employer take "reasonable steps to have the Overpayment...returned by the participant...to the plan."

For #2, what are reasonable steps? just write a letter? (BTW, the money was NOT rolled over)

Are there adverse consequences to the participant if he doesn't pay it back?

As far as I can see, the regs say a safe harbor hardship reason can be payment of "tuition, related educational fees, and room and board expenses for up to the next 12 months."

Does "board" inlcude off-campus housing?

Do you get a copy of the rental agreement and see what the monthly payment is?

How do you account for "board"? Estimate monthly food bills?

Is there somewhere in the code that spells out room & board?

We have three dentists that are merging their practices to form one main corporation. Each of them will be retaining their own corporations and the main corporation will pay a 1099 to each of their corporations. Two of the dentists have existing safe harbor 401(k) plans (with SNEC). The third dentist just started his corporation and does not have a plan. Trying to figure out the best approach to get under one plan. They want to have one plan with all employees, including the dentists. Do you think it would be better to start one plan under the new main corporation, count service for all of the other corporations for eligibility and vesting, merge the existing plans into the one, and then file final 5500s for the current plans? They are not interested in accelerating vesting, just basically amending their existing plans into the new one main corporation plan. Any insights or thoughts would be appreciated. Just trying to make this as convenient as possible for the plan sponsors without inadvertently running afoul of regulations.

My clients plan document currently provides that participants must contribute at least 1% of their eligible in a pay period to get the 9% company match for the pay period. They have executives that have been front loading their pay and are missing out on the full match.

Does anyone know the Pros vs Cons of offering a Matching Contribution True up? (benefits and risks - be it legal, administrative, compliance, participants,....) on the various true-up methods)

Do or can some Defined benefit plans prohibit employee contributions?

If there are plan rules that prohibit employee contributions, do employer pick-ups 'circumvent' that rule?

Because the wage rates cannot have been the same as they otherwise would have been but for the contribution if no employee contribution would have occurred. Is that a correct assumption?

Employee is changing from part time to full time.

We offer some part time employees (have to work 25 hours a week) health and dental benefits and it's extremely expensive so most part time don't sign up.

This employee is changing to full time and the employer contribution for health insurance is significant and makes coverage very affordable.

Is this a change in status from a cost of coverage?