Is a rollover of SEP funds to a new Profit Sharing Plan of the same employer considered a related or unrelated rollover? What about Simple IRA funds?

If the accrued-to-date testing option is used, the "account balance" is tested: 1.401(a)(4)-8(b)(2). This worked very for this one plan since the plan was not cross-tested for the last 15 years (until last year). The target HCE is only 4 years older than the plan's one NHCE.

This year, the spouse shows up on the census with low compendation and they want to know if the spouse should defer.

I read 1.401(a)(4)-8(b)(2) to be the entire balance, not just the employer-provided nonelective. A high spouse deferral would not test well. Is it possible that the entire balance is used only for the average benefits testing and that just the employer-provided nonelective balance is used for the rate group testing if tested using the accrued-to-date method?

I don't see it that way, but wanted to throw up the question. We'll test another way, suggest low spouse deferrals, or imply that higher spouse wages might help out. Any other ideas?

Edit: After reviewing, I am instead convinced that the deferral and match balances are not part of the rate group testing when testing the nonelective. My misunderstanding there.

For a Sole Proprietor DB Plan, the client deposits $40,000 into the plan during 2012. His Schedule C less 1/2 self employment tax is $35,000. The minimum required contribution for 2012 was $0. The calculated maximum contribution is in excess of $100,000. He has no other qualified plans.

I believe there is an exception under section 4972© for the 10% excise tax if the client deposits a contribution in excess of the Schedule C to satisfy the minimum required contribution. But the minimum is $0 in this case.

Is this client subject to the 10% excise tax?

There is mention about the full funding limitation in section 4972. Is this applicable?

We are going to set up a couple of new SH 401k plans, most likely effective 8/1 or 9/1. I saw an old post suggesting that in this situation the effective date should be 1/1, with a separate effective date for deferrals and SH. I assume going this route there are no prorated limits. Is there any down side to doing it this way instead of having a short 1st plan year?

Employee was improperly excluded in 2013 but to calculate missed deferral opportunity, 2013 ADP results are not available. Does employer have to wait till after 2013 to determine the ADP and then correct? Thanks.

PS: they do not qualify for the special rule for brief exclusion.

We currently have a 403b plan that has assets with the same investment provider but on 2 different platforms. One platform is an older 403b platform where contracts were set-up individually for the participants. The newer platform falls under the guidelines of ERISA and is held at the plan level with Employer involvement. Previously the old platform required a participant signature for any and all transactions within the plan.

A new investment advisor has been assigned to the plan and told the investment provider that all assets are ERISA assets and the plan document should override any restrictions of the individual contracts. The investment provider has agreed to the following actions.

1. Any account that has not had any contribution made to their account since 1/1/09 will be given notice and if no response, they will be treated like abandoned plans. The money will stay in their individual account but no longer are an asset of the plan.

2. Any account that has contributions made to it after 1/1/09 will be given notice and if no response is received then one of the following scenarios will occur.

- If the account balance is under the plan’s $5,000 deminimus threshold, they participant will be forced out of the plan accordingly.

- If the account balance is over $5,000, they will be transferred to the new investment platform.

Are 403b plans required to include assets on their 5500 if the accounts were set-up prior to 1/1/09 and have been frozen since 1/1/09? Does the IRS approve treating the individual contracts as abandoned plans and excluding them from being reported on the 5500? I assume I will show this as a distribution on my 5500, correct?

$100M plan gets back $50,000 in revenue sharing and it's put into an ERISA Recapture Account to play pan expenses. Auditor fee is $25,000. If the auditor fee is paid from this recapture account, is this indirect compensation? The implications of course are:

-408b2 reporting requirements

-Schedule C reporting (as indirect as opposed to direct).

Any guidance or articles from the IRS or the "big" names (Reliusu, McKay, Reish, etc) would be great!

Thanks,

I am working with a 401(k) plan that has several participating employers (controlled group). One of the entities is being "sold." I talked to the attorney and he said it is basically a stock transaction. I don't know what that entails but he did say that for the most part, the employees are keeping the same jobs, at the same place, working for the same person. They are not terminating the plan, and the other participating employers will remain. The attorney wants to make sure the document specifies severance of employment rather than separation from service, or in other words make sure there is a distributable event for the participants of the entity being sold. Why they want this, instead of having the new entity adopt the plan, I don't know. It is a Sungard Corbel document and was restated in 2010. I only see termination of employment referenced and don't see any mention of severance of employment or separation from service. The prior document did specify severance of employment in the EGTRRA amendment, but I assume that is not relevant being from an old document. Can I amend the language to ensure a distributable event? Even if I can, it seems like there is still a controlled group issue somehow and these employees should not be entitled to a distribution.

My ex-wife and I just got divorced. We previously signed a separation agreement that included me transferring some of my 403b to her via a QDRO. We submitted the separation agreement along with the other required forms to file for divorce. Although lawyers had drawn up the agreement and the QDRO, we filed the forms ourselves. (My lawyer had told me we could do this ourselves.) I attended the divorce hearing but my ex was ill and unable to attend. At the divorce I was told that because we'd not specifically requested it, the separation agreement wouldn't be incorporated into the divorce settlement, but that it was still a valid legal document. We shortly afterwards mailed in the QDRO to the court asking for it to be signed by the judge, but this was refused because the separation agreement hadn't been incorporated into the divorce ruling.

Is there some other way we can now go about getting the QDRO signed by a judge?
e.g. can my ex file a civil complaint against me to get the QDRO approved?
My lawyers are terrible and never respond to either email or phone calls!
If it makes any difference, my ex and I both live in Maryland.

Thanks!

Are salary reduction contributions permitted in defined benefit plans?

(Pertinent info: The pension is through a Union. It is a non-governmental, multi employer, defined benefit plan. Trust Agreement is intended to be tax exempt under Sections 401(a) and 501(a) of the Internal revenue Code, and the contributions are intended to be tax deductible by the Employers under section 404(a) of the Internal Revenue Code.")

What rules do self-insured plans have to follow? Must they comply with laws in the state the subscriber resides?

Just received notice that an expensive medication will no longer be covered. Anything I can do? FDA issued warning last Fall that generic form is not as effective and is not equilivant to brand.

When taking health plan enrollments, do employers ask for marriage certificates?

I hope that BenefitsLink’s many helpful readers and writers can help expand my knowledge of current benefits-administration practices. My questions are about whether an employer tries to confirm an employee’s statement that he or she is married. (My questions are not about same-sex marriage, but rather about what (if anything) an employer does to check that an opposite-sex marriage exists.)

In a decades-ago era, a new employee when invited to enroll in his or her employer’s health plan, would fill-out a form that asked whether the employee is married and next to that yes-or-no question had a line for writing-in the spouse’s name. If an employee completed the form, the employer enrolled the employee and spouse in the health coverage. No one asked for proof.

More recently, some employers understand that differences between employment-based health coverage and other health insurance can lead some employees to present as a spouse someone who is not the employee’s spouse.

Leaving aside after-the-fact dependent eligibility audits, what do employers now do at enrollment? Do some employers ask for a marriage certificate? Do they ask for anything else?

What does an employer do if the employee does not furnish a marriage certificate or other evidence? On the question of whether the employee is married to the spouse claimed, does an employer decide this “bureaucratically” and rigidly, or does an employer use discretion? If there is some discretion allowed, who has authority to make the discretionary decisions?

Do the answers vary significantly between health plans that use health insurance as the means of providing the benefits and those plans that are “self-funded”?

A block of Cafeteria Plans has apparently been filing for some number of years when forms were not required. Now that they have discovered this, they want to stop. Seems reasonable!

Has anyone had any experience with this? I've never had much to do with Cafeteria Plans. Is it likely that they will receive a reminder/penalty letter when they suddenly stop filing, or is this a commonplace occurrence?

Any observations welcome!

For purposes of answering the question on Form 5500 - Is the total number of Participants with account balances as of the end of the plan year on accrual or cash base reporting?

Thanks!

Hello all,

Is anyone aware of any precedent that would change a plan's responsibility under VCP procedures based on assigning fault to the participant?

The specific situation I have is an employee who sought to increase his contribution level in 2011, but the HR department never made the change until it recently, when it discovered the oversight on its own. It now wants to know whether it can save any make-up costs by arguing that the employee went two years (and counting) without noticing or commenting on the lack of change in contribution and therefore bears some responsibility for the mistake.

I'm thinking the answer is a resounding no, but I figured I would at least throw the question out and see if anyone has ever come across anything to the contrary. Thanks in advance, everyone!

Church plan would like to raise Normal Retirement Age, for current and future participants. This will have the effect of postponing distribution of benefits to which they would have been entitled to prior to the amendment.

Is this permitted?

Thanks for any insights.

.

Nm. Seeking legal counsel.

I am working on a sole prop's DB plan and the sole participant also has a PSP. In calculating the the 25% of comp limit to the DB contribution (when there is more than a 6% contribution to the PSP), does one look at 25% and 6% of the sole prop's net schedule C comp listed on his schedule C or 25% and 6% of his "comp for pension purposes" once 1/2 of the SE tax, his medicare tax, and his pension contribution have been removed?

Any guidance would be appreciated!