A participant wants a hardship to purchase what will be her primary residence. However apparently her uncle is actually buying the home and will be the title holder, the participant will not appear on the title at all. She apparently needs to kick in this hardship distribution for the purchase however.

Is this permissible? 1.401(k)-1(d)(3)(iii)(B)(2) says "Costs directly related to the purchase of a principal residence for the employee (excluding mortgage payments);

One could certainly infer from the reg that it means the employee is the actual purchaser of the home, but it does not say that, it just says it must be a principal residence "for" the employee.

Thanks.

Anyone done this with the Corbel Prototype 401(k)? Is this covered somewhere in the plan document? Does it need to be? Is there a write-up out there by someone going over how to do this?

If a company has fewer than 25 employees and includes in its cafeteria plan the option for payment of premiums to pay for State Exchange purchased health insurance beginning 1/1/2014, may the cafeteria plan impose minimum service and entry date requirements that would put cafeteria plan eligibility beyond 90 days after employee begins working 30 or more hours a week?

Generally, Obamacare requires health plans not require more than 90 days. So the question is whether a cafeteria plan that allows for payment of State Exchange purchased insurance, whether such a cafeteria plan is a 'group health plan' or merely a mechanism for paying premiums. If just a payment mechanism, the 90 day requirement should not apply. If such a cafeteria plan is itself a 'group health plan', then the 90 day rule would apply.

Owner and his wife, both employed, they have been taking RMD's. She dies this year at age 81. He is beneficiary, currently age 87. Law states you should use single life table in 1.401(a)(9) using beneficiary age instead of Joint Life for her current year RMD. For future plan years how should RMD's be calculated for beneficiary? How should his RMD be calculated in current year? using Joint Life Table?

We administer a calendar year 401(k) profit sharing plan, and for plan years 2011 & 2012 there are no employer contributions or forfeitures allocated to participant accounts. It is our understanding that under this arrangement, if the owner elected not to make 401(k) deferrals for 2012, the "Retirement Plan" box checked on his/her 2012 Form W-2 is not checked.

Is this correct?

Thanks for your input!

Does anyone have experience or recommendations for resources discussing a regular US 401(k) plan that has covered Puerto Rico employees without regard to the dual qualification requirements and/or specific rules / limits, etc. applicable to Puerto Rico employees. (Basically employer treated adding Puerto Rico employees just like adding employees of a regular state for 401(k) purposes and did not realize the issues with that until a former PR employee tried to roll over his distribution.)

I feel like I have seen this issue discussed on boards here or possibly in some journal articles before but cannot seem to find much information. I'm thinking this must not be an completely unknown issue but not sure how / if they could go about correcting with the Hacienda and/or IRS. Thanks

Client is interested in contributing (right now) as little as law permits. Here are the facts:

FT=18,000,000

AVA=18,100,000

PFB=500,000

TNC=200,000 (frozen plan, expenses only)

Amortization payments prior to 2012 = 600,000

Amortization payment after MAP = 150,000

(1) If PFB is waived, bases are eliminated and MRC=18,000,000-18,100,000+200,000 (TNC) = 100,000

(2) If PFB is not waived

The catch-up (calendar) limit used for an off -plan year is the year in which the plan year ends. But what if there are no deferrals in that year?

4/1/2011 to 3/31/2012 ADP test failed. John needs an ADP refund of $900. John deferred all of his money from 4/1/2011 to 12/31/2011. He has not deferred anything in 2012 yet.

You can NOT take that $900 and consider it 2012 catch-up, correct? So do you have to look at 2011? If John did not max his catch-up for 2011, can you apply the $900 as catch-up for 2011? Or does it need to be refunded?

Participant terminated many years ago and rolled distribution to IRA.

The Ex-participant is now getting divorce and wants to get a balance as of date more than 10 year ago. Presumably to determine pre-marital portion.

Is the plan under any obligation to dig though it's old records and find such a balance? The participant was paid more than 7 years ago.

I'm pretty sure the answer is no they don't have to unless they want to be really nice for some reason.

Our company has a VEBA for a legacy retiree life insurance plan and is considering a buyout/transfer of this liability to an insurer. This is beyond my area of expertise.

What potential pitfalls do we need to look out for? For example I have heard that retirees who retired due to disability may not be covered. If that is the case are there any solutions for them? Or do we have to maintain the VEBA for that small group?

Any other things to look out for?

Thanks in advance.

Hello everyone,

I have read through similar topics, but have not found one that matches this case specifically.

In my particular case, the document clearly includes bonuses in the definition of Compensation. The plan sponsor is not trying to amend to exclude bonsuses.

Rather, they are giving employees a form that gives them the option to "Take 401(k) deductions from my standard earnings only," OR "Take 401(k) deductions from all earnings including any commission and / or bonus received."

My take is that if a participant *does* chose the first option, this would be akin to him or her saying, "reduce my deferral percentage to zero on the bonus check," if the bonus is paid separately, or "for this check, reduce my deferal percentage to the equivalent rate that it would need to be in order to effectively exclude deferral on my bonus."

This seems fair to me, and would not require a 414(s) test.

Agree? Disagree? I've never seen this type of form before and can't find anything similar in my research.

Thanks!

Small employer has SH 401(k).

Owner recently purchased second unrelated business and is now a controlled group.

Can otherwise eligible employees of newly acquired business be excluded from participation in SH 401(k) if plan can pass coverage using ABT?

What is the rationale for taking an existing DB plan and splitting it up in 2 separate plans - 1 for actives and 1 for inactives? I know that this leads to additional administrative costs (two 5500's, plan documents, etc.) but what is the advantage?

Can reimbursements from a FSA be made over multiple plan years for a service rendered in one plan year?

Example:

Lasik surgery is performed in 2013 for a fee of $2,400.

Can payments be made from the FSA account at $100 per month for plan years 2013 and 2014?

Thanks.

I know there are probably hundreds (thousands?) of plans out there just like this, but I can't see how a VCP filing is going to even come close to fixing this. I'm less concerned about the ancient document, because I think the IRS has addressed the non-amender issue. I'm more concerned that we can't go back to see if there were employees who worked enough years/hours that should have been covered. Then, we've got to beg the DOL to forgive the lack of 5500 filings, and there is no DFVC program for a one-person plan that probably shouldn't have been a one-person plan anyway. I'm afraid of opening a can or worms. I would love to hear how other retirement plan professionals would handle this.

Anyone else having trouble with the site identifying new posts? It doesn't seem to be remembering what posts I have already read and which ones are new. The only way to get it to clear is when I click "treat all posts as read".

Is it just me or are others having this problem?

A business owner who sponsors a 401(k) Plan dies. He designated his two children as the beneficiaries. The two children work for the business and are participants in the Plan. Can they rollover the distribution from their father's account into the Plan? The plan allows rollover contributions.

I've been given an ESOP that hasn't been touched since it timely restated and filed as a Cycle A filing in 2007. The plan has not been touched since then. It has not been amended, nothing. So it has now missed its Cycle A restatement and filing deadline on 1/31/12. I am currently restating the plan using Sungard Relius. Will a restatement typically incorporate all of the required amendments? Or do they need to be tack-on amendments? Also, I am trying to get a handle on the proper procedure for correcting through EPCRS. Do I file under Appendix F, Schedule 1?

Thanks for any guidance for a relative newbie.

An employer has had a new comparability plan with a safe harbor 401k feature (nonelective 3% of pay contribution from the employer) for a few years.

He has given much thought to it, and proposes that in addition to descriptive language in the SPD covering both of the following, the HR person would:

(1) personally counsel each new employee that is age 40 or older before his or her plan entry date that he or she has the option to sign a one-time, irrevocable election out of all plans of the employer and receive a 5% of pay raise in lieu of plan participation, and

(2) give all employees when signing up for 401k elective deferrals a written explanation that if he instead chooses to make a contribution to an IRA, it may yet be tax deductible and the employee would have more control over the investments and more withdrawal access, not being subject to the distribution restrictions on 401k benefits.

Any problems?

An employer is thinking about bringing an MD-DO-PA-LPN one day a week for employees to go to as an alternative to making GP type doctor's office visits.

Would this be providing major medical coverage, deficient per ObamaCare?

What concerns are there if it were provided as part of one of two major medical packages provided by the employer to its employees? One package includes access tp the visiting health practitioner at no co-pay charge to the employee, at one price to employees for coverage, and the other package not including access to the health practitioner, coverage that costs the employee more and visits to doctor's offices carry a co-pay obligation for the employee?

Is the employer exposed to liability for malpractice of the visiting health care practitioner?