If an employee has an outstanding loan from his 401K can he still make deferrals while paying off the loan?

I'm thinking about the future for when my 1 employee company dissolves. Would I have to dissolve the 401k too or can it be kept alive?

Also.... I started an Individual 401k thru TDAmeritrade for my company several years back, but have transferred all funds to a different Individual 401k I started (for this same company)....Does my company technically

administer 2 401Ks even though the first one has no funds in it? Should the first 401k be "dissolved" or something?

Thanks for the insights

What is the correction for a safe harbor plan that in years prior to 2012 calculated the safe harbor match on annual pay rather than pay period? They remitted the safe harbor each pay period but then at the end of the year remitted a true up contribution because at one time prior to 2005 I think the plan was at a prior vendor and the document did allow this annualized pay. The plan then switched to payroll based until 2012 when it was amended to use annual. They now want to correct the prior years. Does this blow up the safe harbor and ADP and ACP testing is needed, or can we just forfeit the excess match, which of course is not that easy since some employees have terminated.

Thoughts!

Facts: An employee with 50 years of service accrued a normal retirement benefit of $30,000 on his NRD 1/1/2006. The employees High 3 Year Comp for 415 is $50,000. The Plan does not suspend benefits but rather gives an actuarial increase. The actuarially increased pension is $60,000. Just to complicate matters, the plan offers a COLA and and provides that lump sums shall assume a 3% increase.

Please comment on whether you agree or disagree.

1. Since the employee is not separated from service the 415(b)(1)(B) limit is not adjusted.

2. The Plan while required to actuarially increase benefits, cannot beyond $50,000 because of 415.

3. When the employee terminates, the lump sum cannot include provision for the COLA since in theory you would be providing for benefits that exceed the 415 limit.

4. I believe a way out or semi-out of this mess might be to amend the Plan to provide for a retroactive annuity start date.

I left out all of the good stuff, which is not relevant to the questions, but begs for sympathy: The COLA caps at 50% of the initial benefit and the standard form of payment is a 10C&L but the COLA applies to the actual payment form. To make matters worse, the benefit is payable at the end of the month. The actual retirement date is the first day of the month except for postponed retirement (after 65) in which case it is the last day of the month.

I have two requests, a general one and a specific one.

First, does anyone have a good source for how to handle Pre-409A issues?

Second, we have two pre-409A plans. One participant in both received too much money from Plan 1. Can we take it out of what we owe him under Plan 2?

I know 409A allows an employer to withdrawal amounts from a nonqualified plan for employee debts up to $5,000 per year, but have no idea how to handle this with pre-409A money.

Can anyone shed some light or provide a link with more info on excluding non-benefits employees? Can the exclusion be that simple, provided the employer actually has that "type" of employee and uses it for all of their benefits.

I just wanted to make sure there wasn't something more complicated about that exclusion then say "hourly employees."

I know about coverage

Suppose you had a 12/31/12 profit sharing plan that added salary deferrals and safe harbor match features effective 10/1/2012.

The employer will fund the SH match after December 31. They will not make any profit sharing contribution.

The SH match of course will be based on salary deferrals from 10/1/12 - 12/31/12. Will it also be limited to salary from 10/1/12 - 12/31/12 or could it be based on salary for the entire year?

Thanks

A plan allows participants to defer up to 80%. Additionally it allows them to make a separate election to defer up to 80% on a bonus. If a participant decides to only defer lets say 10% of their bonus, can the plan keep that election in place until the participant wants to change it or does the sponsor need to have them fill out a new election whenever a bonus is issued?

A SHMAC Plan is terminated on 6/30/2012 for business reasons. In fact, the employees were also terminated on the same day!

When I read through the IRS guidance it says "In addition, a plan that is amended during the plan year to reduce or suspend safe harbor contributions...must prorate the otherwise applicable compensation limit..."

Is the termination of the plan considered an amendment during the plan year to suspend contributions? I'm trying to determine if I need to reduce a participant's compensation for allocation of the SHMAC.

Thanks.

I used to work for a law firm-TPA firm that prepared plan conversion amendments.

This was prior to the 411(d)(6) regs- I do not recall whether it was DB to PS or PS to DB.

We are speaking of a sole proprietor with no employees.

Since we are speaking of an owner-only plan, what is the opinion??

If one is making a maximum allowable DB plan contribution for plan year and intends on making a 6% net schedule C income profit sharing contribution to a DC plan, as well, can that 6% additional contribution be made to a previously established SEP-IRA that hasn't been funded for the past 2 years or need one set up a 401(k) plan to make that 6% contribution?

Thanks in advance!

SR

The Alternate Payee's Social Security Number and Date of Birth were referenced in a QDRO. However, the SSN was one digit off and the DOB was one year off.

Since only the A/P's name and address must be specified, does a new DRO need to be drafted?

"Treasury can tap a range of federal funds that benefit government employees — most critically, the money-market fund in which many federal employees invest as part of their thrift savings plans."

A qualified plan is terminating and one of the participants who terminated many years ago cannot be located - her last known address is not valid and her SS# is not known. The amount due to the participant cannot be rolled over to a safe harbor IRA since a SS# is needed to do so, and presumably the SSA locator service cannot be used. The amount due is about $1,400, so hiring a private service to locate the individual may not be prudent since that would probably consume the majority of the benefit due, and it would seem very unlikely she would be found given the lack of available info. Are there any better options other than 1) escheating the amount to the state, or 2) paying it all out as 100% withholding? Are there any financial institutions that can set up an IRA without a SS#?

Is it permitted to sell a stock at a gain from my taxable account and buy it in my Roth IRA? Its not a wash sale, as there is a gain. I would conduct the trade on the NYSE or NASDAQ. The sell and buy shares may be the same as the stock is thinly traded, but then again they may be different. However, the price would be a market price. I do not want this transaction considered self dealing. I believe this is discussed in USC Sec. 4975.

I need help!!

I have a plan where the top 20% election is written into the Plan Doc. Based on the 2009 data, there would be 44 people in the top paid group for 2010.

At the end of 2010 when the 401k discrimination tests are run there are only 38 HCEs in the test. The test passes. I thought that it was ok to leave the test as is...the client's attorney (not an ERISA attorney) is saying that we need to add in another 6 people from the NHCE group to have 44 in the upper group because the top paid election is in the Plan Doc.

I thought the top paid group election was utilized in order to "reduce" the number of HCEs that have to be considered for the 401k testing which would therefore "help" the test when necessary.

If I had 50 people in the HCE category at the end of 2010, I could consider only the top 44 in my HCE group for the 2010 test.

Am I ok with only 38 HCE in my 2010 ADP/ACP testing?

Thank you in advance.

I've been inactive for ages. I've missed the discussions. Perhaps I once again will become active . . .

Question: Can 2 plans with different eligibility standards (one with a y/s wait, and the other with immediate entry) be aggregated for 410(b) & 401(a)(4)?

Facts (in brief): Only NHCEs are in the plan with immediate entry, while the plan with primarily HCEs has a 1 y/s requirement. When testing the HCEs' plan (for 410(b), ADP & PS non-discrimination), I think I cannot use the 1 y/s requirement of that plan--but I can't find the reg stating that. Does anyone know where it is--or am I once again hallucinating?

Can an employer terminate the non-elective safe harbor portion of its plan (without having to meet the substantial business hardship requirement) if it terminates its safe harbor prior to the start of the plan year, but after the safe harbor notice has been sent?

For the last two years, due to ERPA, I have been buying two webinars from ASPPA (primary and secondary) for myself and the other ERPA in the office.

Is this necessary? I just looked at the 8554-EP and it seems that all they want to know is the number of total credits and the total of ethics credits in each reporting year. Do I need a certificate in my own name, or, provided I don't lie (which I do not), is it enough to keep my own listing and support for the CPE I take? For example, if we pay for one web-inar, and listen together, can we both claim the CPE on the 8554? The instructions do not seem to stipulate any such requirement.

I found this in Circular 230 as part of the recordkeeping requirements, perhaps this is why it is required:

"The certificate of completion and/or signed statement of the hours of attendance obtained from the continuing education provider."

This is the language in Plan Document regarding the allocation of nonelective contributions:

Nonelective Contributions.A discretionary amount to each Participant, which amount, if any, shall be a Nonelective Contribution. The Employer shall provide the Administrator with written notification of the amount of the contribution to be allocated to each Participant.

Gateway Contribution.In addition to any Nonelective Contribution described above, the Employer may make an additional Nonelective Contribution ("Gateway Contribution") in an amount necessary to satisfy the minimum allocation gateway requirement described in Section4.4(b)(8).

Is there a requirement that I must Cross-test and provide gateway allocations, if the plan otherwise meets 410(b) and 401(a)(4)?

For example, assume I have many HCEs in a plan and I only want to benefit a few with a nonelective contribution and the plan otherwise meets the ABPT on a benefits basis, can this be done without having to meet gateway or other requirements?

I know of another firm that is doing it this way and not providing a gateway minimum. A few HCEs are getting a 13.2% allocation, while others NHCEs are getting as low as 1%.

Thanks.