Two companies of one owner, two separate plans, plan A and plan B. An employee transfers employment from plan A to plan B (under the same employer), can the employee transfer their plan A assets to plan B and continue paying their plan A outstanding loan balance to plan B after the transfer?

I have a plan that is terminating that has never paid lump sums. They have now decided to offer lump sums to all participants including the retirees. I'm finding that when I caluclate the lump sums on retirees over the age of 80 (and there are several) that the present value of the plan benefit at 417(e) is greater than the 415 100% of pay limit at 5.5%. When I discovered this on one retiree that I actually had enough data to calculate, I was quite surprised. Of course, this was a takeover plan and many of these participants retired before we took over the plan. I'm now trying to find enough data to verify I'm not over paying anyone. This seems like an unintended consequence, those affected by 415 are not the HCEs, but older retirees. Any thoughts?

General question about timing of change notice for 408b2 as it relates to new fund additions at a product level. If a company is going to add new DIAs to the potential fund lineup for a product, when do you think the 60 day clock (became aware of the change) would start for purposes of providing a change notice for 408b2? For example, if the new DIAs are going to be "available" for a plan sponsor on July 31, do you think the change notice would need to be effective by 6/1? The timing of these 408b2 notices and the information needed to satisfy 404a5 component of 408b2 makes timing of notices difficult and certainly subject to some interpretation.

Happy 3/1/13

I know! I just noticed it myself.

First time we have a Roth 401k excess deferral and not sure of how to prepare 1099R. Under age 50 participant deferred $17,500 in 2012 all as Roth 401k deferral. In 2013 before 4/15 processing refund of $500 and have calculated $51 in gains. Should there be two 2013 1099Rs? One for the Roth deferral and one for the gain.

1)Box 1: $500

Box 2a: $0

Box 4: $0

Box 7: PB

Box 11: 2009 is date of 1st year contrib

2)Box 1: $51

Box 2a: $51

Box 4: $0

Box 7: 8

Any thoughts or confirmation is appreciated.

Alright I am ready to get blasted but here goes:

Client came to us with case of errors on employee's W-2 for simplicity sake rounded numbers box 1 shows 182,500.00 box 3 shows Fica limit number box 5 shows 200,000.00 box 12 shows d and 22,000.00 so taxpayer did not get credit (on taxes), for full contribution including catchup. The payroll company (national I might add), did not catch error CPA prparing taxes did not catch error nor did IRS so far. So participant said since I paid tax on money can it be treated as a Roth 401 k for amount missed (with tax benefit)! Open to opions pro or con

I have a client with a terminated participant. He wants to defer his payment, but in the event the plan of new employer allows a transfer, he wants the option to be able to transfer the benefit to the other plan. His deadline to elect is fast approaching, and his concern is if he has to make the election before he finds out if his plan allows the transfer, then he will be locked in to the deferred date and will lose his ability to do the transfer. Any thoughts??

I understand that a Cafeteria Plan cannot offer an HRA yet there can be some meshing with say, a limited purpose HRA, and Cafeteria Plan benefits in terms of which benefit handles a claim first etc.

How would one go about writing a plan document for an HRA whether or not there also a Cafeteria Plan? Can/Should it be included in the Cafeteria Plan document when there is one?

Thanks

Here is the scenario . . . Owner A is due an $872 RMD . . . our fee is $125. So client withdraws $872 from the plan, pays us $125, withholds $74.70 (10% of RMD net fee) and pays Owner A $672.30. Does this satisfy Owner A's RMD obligation?

Thanks for the help.

Dental Practice A purchases another dental practice B in 2011.

Dental Practice A established a 401(k) plan in 2010.

Dental Practice B does not have a 401(k) Plan.

Dental Practice A does not amend its plan to indicate that there is a controlled group and as such does not cover Dental Practice B in 2011 or 2012.

Now Dental Practice A wants to amend the plan to allow for the other Practice to join the plan.

I know that due to transition rules, Dental Practice A's plan is deemed to pass coverage during the transition period. I also know that the plan which is eligible for the coverage transition rule must still satisfy the ADP and ACP Tests.

What I am not sure of is if employees of Dental Practice B are included in the ADP and ACP Tests for Dental Practice A with 0% or are excluded from the test altogether.

Please advise.

An employer has A.E. defined as 7% interest and uses the applicable mortaility table.

An HCE-owner terminated many years ago but the plan is restricted due to 110% C.L., so no payment has been made. The plan will soon be out from under this restriction.

This terminated HCE is at the 415(b) limit and is at retirement (age 65). The 415 limit for lump sum purposes is calculated using the 7% plan rate.

This HCE had been a 50% owner years ago, but no longer has any ownership. He had made some verbal agreements years ago about his plan benefits before selling his 50%(without consulting their actuarial service provider), and the amount payable now is higher than he had agreed upon.

The current owner and this terminated HCE discussed the issue and they want to know if it's possible to lower the lump sum payable for the terminated HCE. He intends to elect a lump sum payment.

If the plan amends the definition actuarial equivalence to 8.5%, no other participants lump sums are affected since they are all based on 417(e) minimums. All accrued benefits are unchanged.

Due to the 415 limitations, the lump sum for this HCE would now be limited to the lesser of the amount determined at 8.5% or at the 415 rate of 5.5% - is this correct?

Does 411 prevent the lump sum amount from being lowered in this manner?

A company has a DB Plan that they are going to terminate. They want to move any excess assets to their 401(k) Plan. I know they can use this ratably over 7 years to pay for nonelective contribution and reasonable admin fees. Will the platform recordkeeping fees (i.e. ING recordkeeping charge say 20 basis points) be considered acceptable admin fees?

Cross Test SH 401k PSP - eligibility for 401k, SH and PS are the same

the 3% SHNEC excludes HCEs

Can the employer elect to make a PS contribution of 9% for HCEs (0% for NHCEs) as long as passes ABT and RGs?

participant age 65;no more accruals under the benefit formula.

participant decides not to retire but take some in servcie distributions.

late retirement benefit is actuarial equivalence of normal retirment benefit.

for boy val(age 65) i think best approach is to say funding target is

pvab and no service cost. at age 66 boy val(one year later)

determine

actuarially equiv benefit to age 65 adjusted for payments and use this for the funding target. once again

no svc cost. does this seem a reasonabe approach?

Given a S-corp. The owner's spouse is getting W-2 and 1099 (I am not sure if this is possible).

Question: Is it possible to include both W-2 and 1099 as Plan Compensation (as either Sec 3401 comp or Sec 415 comp)?

Thanks.

Is there any chance or authority that allows the sale of assets exception to the withdrawal liability to be extended to a bona fide good faith lease? The case would be where the lessee is analogous to a buyer in the sale of assets? My inclination is no and I am jumping into some research, but I wanted to see if anyone had any thoughts on how to avoid withdrawal liability when the lessee is assuming all the contracts of the lessor.

Hi,

A participant dies, she had vacation time and personal time due and the employer does not want to withhold 401 deferral contributions on the final check for her vacation & PT, is this allowable? The plan does not exclude any type of compensation and I haven't found anything that seems to nullify her election form upon death.

Thanks for the help.

Non-electing Church plans are exempt from discrimination testing....preERISA rules generally apply. IRS Notice 2001-46 essentially is silent about K & M testing on 401(k) plans adopted by churches.

I don't believe they are subject to K&M testing.

Is there any IRS pronoucement that settles this issue? Since 403(b) church plans are clearly and uniquivocably exempt from any kind of contribution testing other than Deferral and 415 limits, it stands to reason that church plan 401k's would be treated similarly.

Does anyone have any opinion on this.

Each member of a group of related (controlled group and affiliated service group) employers sponsored its own SIMPLE-IRA. In the aggregate, they were ineligible for the SIMPLE-IRA due to headcount. This has gone on for several years and into 2013.

It looks like the EPCRS correction is to 'fess up and stop. If that's all there is to it, would the employer still be able to set up a 401(k) plan for 2013? Would the amounts already contributed to the SIMPLE just be ignored?

Seems too good to be true

I've only seen a couple of plans that ever have used this. Have a sort of unusual situation here.

Employer currently has just a 6-month eligibility requirement, with no hours requirement. Employer has some people who come and go for short periods. Under the service-spanning rules in 1.410(a)-7, this is causing people who work only a few hours per year to become eligible - they will work for 1 week, terminate for 2 months, work another week, terminate for 4 months, etc..

First, this is a poor design for this type of employer. That aside, they want to keep 6-months. Simply making it "6 consecutive months" is meaningless under these same service-spanning rules.

What if they just say something like "6 consecutive months with a minimum of 500 hours" (or 800 or 1000 hours - whatever), or something along those lines? I believe this is perfectly acceptable. Are there any "hooks" or traps for the unwary that I'm missing?