If an employee has w-2 comp of $15000, what is the max elective deferral to a Roth 401k Plan?

Can it be $15000 or must it be net of fed, state and soc sec payments?

Facts: plan allows one outstanding loan at a time; participant takes loan and defaults and loan is deemed distributed; months later the plan allows participant to take a subsequent loan.

I know the loan regs state that a loan that is deemed to be distributed ceases to be an outstanding loan for purposes of Section 72(p), except for purposes of determining max amount of subsequent loans.

Based on that reg, would you agree that for purposes of the plan's one outstanding loan rule, there is no operational failure since the defaulted loan would not be considered outstanding for that purpose. Understanding that there could be a violation if the amount of the 2nd loan exceeds the maximum loan amount when taking the defaulted loan into consideration.

Thank you in advance for any responses.

Plan is leaving an MEP Plan. Can the new plan include a provision that says "If you were deferring 5% in the old plan, that election will be honored in the new plan"?

Similarly, can you include a provision that says "you're balances in the old plan will be trasferred to the new plan and be mapped to like funds?

100% business owner sponsors a 401 (k) Plan. He then forms a new company with another owner (50-50) and the employees are scheduled to work for the new company starting on 1/1/13.

The new company would like to sponsor the existing 401 (k) Plan and I don't think there should be any issue with that under normal circumstances. There's no problems with the existing plan that I'm aware of.

Is there anything else that should be considered? For example, do I need to credit service prior to 1/1/13 for the employees that are covered under the existing plan because their employment will transition as of 1/1/13 to the new company? Or is the new company considered a successor employer?

Thanks.

What's the difference between a "lump sum" distribution and a "single sum" distribution?

Question 6 of IRS Form 5310 asks whether the employer/sponsor is part of a controlled group. The 401(k) plan was terminated immediately prior to buyer's stock purchase of sponsor. With respect to Question 6, if you answer that question as of the date of plan termination, the answer is "no," not part of a controlled group, but if you use the date of filing, the employer is part of a controlled group. Can we use the date of termination to determine controlled group status for purposes of Form 5310? Any guidance on this?

A one person DB Plan "distributed" a notice (to himself) on 12/15/2011 that basically said 'The Plan Sponsor wishes to and will be freezing the DB Plan effective January 1, 2012". But then they never actually amended the Plan to freeze it. Can he still amend the PLan prior to the end of the year 12/31/2012 so the plan freeze is effective 1/1/2012? Assume 1,000 hour accrual requirement has been met already.

In situations where an employee is terminating employment, but decides to take all of his accrued vacation first, does that employee continue to be an eligible employee for purposes of making 401(k) deferrals? For example, if an employee has six months of accrued vacation, works for the employer through 12/31/2012, then takes vacation for the first six months of 2013 and officially terminates employment 6/30/2013, may 401(k) deferrals continue to be made from the compensation paid to the employee for the first six months of 2013 while he is taking his accrued vacation? Or would the employee be treated as not being an eligible employee after 12/31/2012 because he is no longer performing services for the employer after that date?

Elective deferrals in 403b plan, with match in a 401a plan. Is there anyway to do this w/ Sungard? We have the 403b prototype and the 401k prototype, but I can't come up with a darn thing on coordinating the two. It seems to be a complete and total overhaul if I even try.

I am taking a course on Defined Benefit plans and my study partner and myself are conflicting on a certain situation. We have a participant who is age 66 and has not commenced benefits. The NRA is 65 and no suspension of benefits notice was provided. I believe that the benefit would be the greater of NRB actuarially adjusted OR the NRB recalculated by plan formula to include the additional year of accrual. Therefore, I used the following formula to determine the actuarially adjusted benefit...

NRB times APR@65 times (DX65/DX66) divided by APR@66

Now I would compare this to the adjusted accrued benefit by plan formula and use the greater of the two... correct?

A self-funded health plan has been properly modified to extend coverage of adult children to age 26. The plan uses a composite rate for coverage, so once an employee gains eligibility the cost is the same for single, two-person or family coverage.

Recently an employee asked to drop coverage for a deadbeat adult child.

Are there any ramifications to the plan to honor this request? A plan amendment would likely be needed to clarify that the parent has this right, but are there any other pitfalls for consideration?

In the past we have denied similar requests for minor children (b/c the parents wanted to keep them on CHIP).

Thanks.

A plan sponsor had their payroll system set up incorrectly for much of 2012 and withheld Roth deferrals on net compensation instead of gross compensation. Roth deferrals are, therefore, slightly less than they should be. Plan has a 3% safe harbor non-elective contribution so employer contributions are correct.

What does the plan sponsor do to correct this?

Can a plan provide the following:

1) A percentage of compensation noneletive contribution for all employees, and

2) For employee's contributing more than 2% compensation, an additional percentage of compensation match.

There are two unusual things here.

First, the "match" doesn't kick in until we get to 2% contribution.

Second, the "match" is a percentage of compensation, not a percentage of elective deferral.

I do not see a prohibition for either, but I've also never seen either used before. Is this an allowable structure?

401k plan had a partial termination in 2011. Participants affected were made 100% vested.

In 2012 one of the terminated participants was rehired. If she had not been a part of the partial termination, she would only be 40% vested.

I assume with her rehire, she will pick back up on the vesting schedule and not continue to be 100% vested?

Thanks.

If a 5% owner (who statred ompany in 1980)

established a new plan on 1/1/2012 and said owner turn 70 1/2 on 10/1/2012.

The contribution will be made 12/2012.

When do RMD commence. I think 4/1/2013, but I am not sure.

Thanks

There's a terminated employee in one of my plans that has a vested account balance that flucuates above/below $5,000. If I'm reading the regs properly, and please correct me if I'm wrong, I cannot autoroll the participant account unless it's below $5,000, even if the vested value was below $5,000 at the time the participant terminated employment.

I have a client who was approached by an insurance organization which states it converts uncovered medical expenses into insurance premiums by processing them through an insurance company. This would allow the S-corp owner to get an above the line deduction for items that would otherwise be deductible only on Schedule A. This plan only covers the owners. The process begins with the client submitting medical expenses to the primary carrier. When the expense is rejected, the client pays the bill and submits the claim to this company's claim processor (along with a processing fee of course). The company then reimburses the client for the claims and submits a bill to the client's corp. for premiums equal to the amount of the claim plus 10%. The S corp then pays the bill as a health insurance premium and according to the company, can treat it as such for tax purposes.

This seems wrong on many fronts. Has anyone dealt with this type of "plan" or know if this type of arrangement is view by the IRS as legitimate??

Plan doc states that we will perform a true up each year to those who contribute the 402(g) limit and have an average rate of 4% or more.

Match is 4%

Vesting is 3 year cliff for all ER including True Up.

Most we allow any participant to contribute is 50% of their pay up to the $17,000, or $22,500, limit.

90% of our work force is NHCE. Of the 90%, 43% make $34,000 or less.

We have never tested for BRF as our ERISA attorney says we don't have to. Do we have any issues with this test as it relates to our true up rules?

We have a 403(b)(7) plan that wishes to allow participants to withdrawal rollover contributions at any time. §403(b)(7)(A)(ii) provides "under the custodial account no such amount may be paid or made available to any distributee before the employee dies, attains age 59-1/2, has a severance from employment, becomes disabled (within the meaning of section 72(m)(7)), or in the case of contributions made pursuant to a salary reduction agreement (within the meaning of section 3121(a)(5)(D)), encounters financial hardship."

Would you agree that under a 403(b)(7) plan, rollover withdrawals could not be permitted at any time?

Is there a way to code the following type of match formula in Relius?

0-2 YOS: 25% up to $400

3-5 YOS: 25% up to $800

etc.

I'm new to relius and can't see that this can be coded in the plan specifications.