New variable hour employee changes employment status during their initial measurement period, to permanent full-time position. The proposed regulations require that they be "treated as a full time employee" by (a) the first day of the fourth month following the change in employment status or, if earlier and the employee has averaged at least 30 hours/week during the initial measurement period elapsed to date, (b) the first day of the first month following the end of the initial measurement period (including any optional administrative period associated with the initial measurement period).

The question is, does "treat as a full time employee" mean to offer immediate enrollment in coverage, or to apply a 90-day (or less) waiting period as applicable to other full-time employees?

I think that the (a) and (b) periods are meant to serve as the equivalent of waiting periods (i.e., no additional waiting period applies) but would be interested in comments on the meaning of "treat as a full-time employee" in this context.

If a plan is offering a service through a service provider that provides investment advice for a fee as allowed by ERISA section 408(b)(14) (as introduced by PPA to not make it a prohibited transaction), and the investment advice is offered for free to those participants over age 55, is it potentially discriminatory? The thrust of the question: is investment advice considered a "other right or feature" under 1.401(a)(4)-4(e)(3)?

There appears to be little guidance on the issue. If anyone has a thought or direction to point, please share.

Took over a first year cb plan (2012) where the interest credit is defined to be actual return on assets.

The resulting deduction limit is far less than the contribution credit since the IC is zero and the Plan does not have a floor other than IC cannot be zero.

Is there a way to increase the deduction limit equal to the contribution credit for 2012?

Tried at-risk but it's not enough. Plus, there's no prior service cost so I have no FT.

Any ideas?

DB plan with no hours requirement for entry but 1000 requirement for accrual.

So, those employees that have never had 1000 hours are still in testing population but aren't benefitting. I'm not passing a26.

Can I apply a26 to statutory group and OEE group separately? Since nobody in the OEE group is benefitting in the DB, would it matter?

Code says:

(B) The plan under which the otherwise excludable employees benefit satisfies section 401(a)(26), both by reference only to otherwise excludable employees and by reference only to employees who are not otherwise excludable.

I have no clue what that means.

Thanks.

I have a client that uses a 3% safe harbor non-elective contribution plus a discretionary profit sharing contribution. Last day of employment allocation condition applies to the discretionary p/s. P/S is pro rata based on comp. (Not cross tested/new comp allocation).

Is it correct that I must pass the general test since a terminated participant receiving the 3% safe harbor but not part of the profit sharing eliminates the "uniform allocation" forumla of the plan?

I think I heard this in class or in a webinar, but can't find my notes.

Thanks!

A national company sponsors a vision plan. In one rural location, there is no local vision plan provider (have to drive 30 miles away). The Company contacts the vision plan provider and gets them to add a local eye doc. Can the company now allow employees in that rural location to elect the vision plan with pre-tax $$$ without running afoul of the 1.125-4? In other words, do you think that this qualifies as a significant improvement to a benefit package option under 1.125-4(f)(3)(iii). Does the IRS answer calls on this?

An S Corp with 4 owners. 2 owners are looking to be bought out in the next 3-5 years. Additional options outside qualified retirement plans are being considered. Is there a nonqualified deferred compensation plan that would work in this scenario - possibly having remaining 2 owners pay the deferred compensation out of future earnings or fund it through life insurance? If so, can you please provide a general explanation of how this would work?

Thank you!

Outside of the Medicare Secondary Payer rules, are there any rules out there that would prevent a company from either (1) excluding employes from coverage if their spouse works for a company that offers them coverage, or (2) offering cash incentives to not take coverage with the employer and instead take it with spouse's employer?

I'm also aware of the pay or play effects (1) would have under ACA -- wondering if there is anything else in the universe to worry about.

Thanks for the help.

I have a multiemployer db plan that covers both collectively bargained and non-collectively bargained employees. One of the participating employers fails the ratio percentage test for its non-collectively bargained employees (for multiemployer plans, the test does not apply for collectively bargained employees). I have a couple of questions on this:

The testing has been done on an employer by employer basis for this plan. Can we aggregate all the employers together that cover non-collectively bargained employees and then test? The plan might pass on a plan wide basis.

It appears the employer may have failed this test for several years. If so, what is the proper correction procedure?

Any help would be appreciated.

One of my clients, a partnership, filed their tax return on 3/15 without the 2012 top heavy minimum contribution. I understand that for 2013, i'll need to include that in my annual additions testing and for the 25% company deduction.

My question is.....what is the due date for this deposit since the tax return has been file? Is there a penalty due since it wasn't made by the due date of the tax return?

Once upon a time I had heard that if a 401k plan has loans, it had to have a trust/trustee to "hold" the loans. Is this true? Or can any plan funded exclusively by insurance contracts claim exemption from the Trust Requirement?

I have a client who has been checking the box for the exemption for small pension plans under Reg. 2520.104-46 in order to waive the annual audit requirement. However, the client has not been providing the requisite information to the participants as called for by the regulation. Does that mean the exemption is blown and we would have to go back and audit for the past decade? Any insight would be appreciated.

I have noticed two things.

1) There are flex bene plans filing 5500s but only submitting the first two pages with no schedules, checking General Assets. Is this still required? I think not as per Notice 2002-24, but then why are they still being filed?

2) There are small flex bene plans filing 5500s checking Trust, with only Schedule I, showing account balances that are relatively small I think due to timing of payment of premiums. I am guessing this may be a checking account issue or whose name the checking account is in? Is there a way around this?

Taking over a plan and notice they failed the ADP test in 2010 and 2011 and did not forfeit the associated match for the deferrals refunded. In looking through Rev Proc 2013-12, I don't see anything directly related to such a failure (but tax season fatigue could be causing me to overlook something obvious). Has anyone tried anything other than forfeiting the monies at this point (and related earnings)?

Is there a place I can find in the IRS Regulations that specifically explains that within a qualified plan, the Dividends from the Employer Stock that are paid out to a participant, do not affect that participant's Lump Sum Eligibilty?

Even after a qualifying event?

Also, is there an IRS regulation that explains what actually disqualifies a participant from lump sum eligibility?

In the case of a plan termination, is it a requirement that the plan agreement provide (in writing) the right to terminate the plan, or is it enough that we follow the procedures for discretionary termination by the employer? If someone has an answer, can you direct me to where to look in the code? Thanks

Does anyone else take the position that, based on Notice 2005-1, Q & A 7, and the absence of subsequent guidance, that equity incentive plans of LLCs can be treated in the same manner as stock appreciation rights plans for purposes of the exemption under 409A, provided the requirements for SARs are otherwise met? Any reference to guidance would be greatly appreciated.

Is a one lump sum distribution from a 457(f) Plan to a participant over 59.5 subject to PA state tax? Now, don't everyone jump in at once.

I have a feeling this is a stupid question but I am going to ask it anyway.

Are leased employees counted in the beginning of year participant count for purposes of determining if a plan is a large plan or a small plan?

Thank you.