Hello all,

what is the consensus (and I searched any case law about this and didn't find any) about a tpa firm who determines HCE or Key EE status or who is a stat exclusion as being considered a plan admin because of that ?

Obviously my feeling is no, if so most tpa's would fall under that label.

*as far as why or reg cite or case law --I didn't get that from the person who brought that up, so if a response was going to be to ask them to provide the cite, I don't have it.

Thanks

Hi, I have a plan where a aprticipant signed up for ROTH contributions in 2012. The contributions were designated pre tax, contributed to the pre tax account and the W-2 reflects what happened. Participant is now asking Sponsor to "fix" the contributions to what she signed up for in the first place. Is it possible to make the correction now and issue an amended W-2?

Thansk for your help.

I always thought if you were going in under EPCRS you had to go in with everything that you know is incorrect. Is that correct? So as an example, can you go into EPCRS for failing to do the Top-Heavy Minimum, but not the ADP refunds that were done late.

For the sake of argument assume none of this can be self-corrected.

Follow-up: What if the ADP refunds were never done and won't be done? Does that bar you from doing a submission regarding the THM?

Believe me , this is a 100% hypothetical, I'm just trying give a good example to understand how the system works, and what you're options are under the program. Sometimes you might want to correct and submit for one failure, but not the other.

Put it another way, do you have to represent that these are the only problems you are aware of?

I have a card carying union business onwer who owns 100%. He has 3 non-union employees. He has approx 40 union employees. Union employees are cover by union retirement plan which owner contributes to. Currently the owner also pays into the union plan for his own retirment plan coverage and also health care coverage. The owner wants to keep the health care coverage but stop his union retirement plan contributions and use the company sponsored 401(k).

I've heard and read yes he can do it. I've heard and read no he cannot.

Yes he can

Owners/management are not employees and thus not covered by CBA

He is a "bargaining unit alumni" which allows him keep union benefits but not be covered by CBA

His wages are not collectively bargained (pays himself what he wants/can) and thus not covered by CBA

No he can't

Document says Union = Any Employee who is included in a unit of Employees covered by a CBA, if retirement benefits were the subject of good faith bargaining. "Employee" definition does include Self Employed. "Self Employed" is any indvidiual who has Earned Income from the business.

He has a union card so he is union until he turns in his card.

Any respnse is appreciated.

Am I reading the Rev. Proc. correctly that if a loan has been deemed by a platform recordkeeper and a 1099-R is issued, the failure to repay the loan cannot be corrected through VCP?

The Rev. Proc. seems to address requesting relief from reporting, but as I strictly read the text it does not imply that the procedure would reverse a loan that has already been reported as taxable on a 1099-R.

Thanks.

We have a DB plan and the owner is at NRA, at the 100% of comp. limit and continuing to work. There is currently an excess in the plan and as a means of controlling the excess, he could rollover the PV of his AB to his 401(k) plan. Prior to that, we were wondering if he could somehow take some annuity payments from the plan assuming the document allows for this. Ideally, those payments would go to the 401(k) plan as well, but the regs say that periodic payments cannot be rolled over. I don't really understand the reasoning behind that. Any thoughts on how this can be accomplished without purchasing an annuity and then surrendering it and rolling over the proceeds? Any guidance/suggestions would be appreciated.

Participant terminated more than 5 years ago, was 100% vested and was paid out.

Participant is rehired in 2012.

Does this person start over for eligibility and vesting purposes?

A participant took an inservice distribution from his employer's 401(k) plan, but the plan did not permit inservice distributions. Is this an "Overpayment" for purposes of EPCRS?

If it is an Overpayment, EPCRS says that to correct, the employer has to ask for the participant to pay it back, plus interest. It also says the employer must notify the participant that the distribution wasn't eligible for tax-free rollover. What form must this notification take? A letter? An amended 1099-R? If an amended 1099-R is required, and the participant pays the overpayment back, does that mean an amended 1099-R is no longer required?

What if the participant rolled the Overpayment to an IRA, and it is after the deadline under IRC 408(d)(4) to remove the excess contribution?

We have nothing to do with plan investments, but I thought someone might know the answer to this. I have little information to go on other than that a client wants to open up new plan investments and/or investment options. the client says that the investment house(s) or brokerages, whatever, are telling him that the plan fiduciaries must provide their personal social security numbers, due to Dodd-Frank. (Mind you, this is what the client is saying - usually inaccurate in ost information they provide!)

Doe you know if this is true, or partially true, etc? Thanks!

401(k) plan - 7/1/2011 to 6/30/2012 plan year. The plan defines the Limitation Year as 1/1 through 12/31.

Employer funds a profit sharing contribution for the 2011 plan year on 6/25/2012. How do you determine which limitation year this contribution should be included in? Does the employer choose whether it should be 1/1/2011 to 12/31/2011 or 1/1/2012 to 12/31/2012?

The 415 regs say that "an annual addition is credited to the account of a participant for a particular limitation year if it is allocated to the participant's account under the terms of the plan as of any date within that limitation year" - so from that perspective it's included in the 2012 LY test.

However, the regs also state that "employer contributions are not treated as credited to a participant's account for a particular limitation year unless the contributions are actually made to the plan no later than 30 days after the end of the period described in section 404(a)(6) applicable to the taxable year with or within which the particular limitation year ends." The 6/29/2012 contribution was credited prior to 30 days after the 404(a)(6) date - so from that perspective it can be included in the 2011 LY test I believe.

I believe the employer's preferance would be to include it in the 2011 LY test. There are some participants who terminated in December 2011 - and so they don't have any 2012 compensation. So if this contribution was deemed a 2012 annual addition, they would exceed the 415 limit.

Thoughts?

Does the Internal Revenue Code (or Treasury regulations) impose rules regarding inclusion of certain provisions in the ESOP plan and loan documents (e.g., a provision prescribing what happens if the plan defaults on loan repayments)?

Our firm has agreed to do administration for our first SARSEP (administration only for 2012). Upon review of the adoption agreement, we discovered the employer contribution has not been allocated according to the plan provision since inception (1994). The document states Pro-Rata, but the contribution has been allocated as Integrated.

In reviewing the latest EPCRS, I find a correction for this issue on a SARSEP to be a bit confusing. Since the plan has been operated using an Integrated formula since 1994, they are not interested in following the correction for an Excess Allocation, but would rather amend the plan retroactively and ask for the Service’s blessing.

According to 6.11 (1) Correction for SEPs generally is expected to be similar to the correction required for a Qualified Plan with similar failure.

According to 6.11(2) if 6.11(1) is not feasible for a SEP or determined by the Service…..Excess Amounts for cases in which there has been no violation of a statutory limitation with respect to a SEP, the Service may provide for different correction. Special fee my apply.

Can this failure be corrected by plan amendment under VCP? And if so, which Schedule; 1 or 3 or both?

Schedule 1 appears to allow for correction by plan amendment, but only if the corrective amendment was adopted before the expiration of the plan’s extended remedial amendment period for that amendment. Do SARSEP’s even have a RAP?

Schedule 3, specifically for SEPs provides for Excess Amounts Contributed & Retention of Excess Amounts, but does not appear to offer correction by plan amendment.

Also with regards to the filing fee. Fee for Qualified Plan is $750 (20 or fewer), and for a SARSEP it is $250. Would we send in the $250 and wait and see if the Service would impose the $750?

Any enlightenment is greatly appreciated. I’m out of my element here.

Thank you

Client has a short Plan year (6 months). The hour requirement for PS is 500 hours. Do they reduce that to 250 for the short Plan year or does the allocation requirement remain 500?

Participant in a plan terminated in July of '12 and rehired December of '12. He had a loan. He did not timely repay outstanding loan payments so he was defaulted and had a deemed distribution for 2012.

In 2013, is there any way for the participant to pay back this loan and 'reverse' the 1099 for '12 in '13. Final-Reg, Tax-Regs 1.72(p) - Loans treated as distributions indicates is repayment continue after deemed distribution, tax basis in the plan increases - how does that affect the 1099 that was issued?

Any suggestions would be helpful... Thanks

Can a DB plan be amended to not provide further benefit accruals to a participants upon attainment of NRA (which is 65 in this case)? Thanks.

What is the risk/exposure for unfunded/fully insured welfare benefit plans that do not file 5500's, or that file with incorrect information such as participant counts?

A participant in a money purchase plan attained age 70 1/2 in September 2012. He is not an owner but is the Executive Director. He retired 1/31/2013. Before a total distribution of his account can be processed shouldn't he receive an RMD? Thanks.

If i turn age 55 in 2013, quit my job, take a distribution in 2013, I do not pay the penalty. If I turn age 55 this year and terminate next year, receive a distribution in 2014, I do not pay the penalty. This is how I am interpreting the exception. If I turned 57 or 58, I would still be subject to the penalty, yes?

Why age 55?

Thanks

Is anyone able to get their participants to connect their website UserID to download into thier mint.com account? If so, what was required to set this up? I have been told by Relius Support that this is now possible, but have not been able to get it set up and was wondering if anyone has actually gotten this set up.

If a TPA's distribution fees exceed a participant's account balance, is there any justification for simply eliminating the account upon termination of employment? For example, assume a participant's account is valued at $55 and the distribution fee is $65. Can you apply the distribution fee against the account and zero out the account?

The TPA is suggesting that this is permissible. How can you apply a distirbution fee to an account if the distribution is never made?