415 statute uses the high 3 year average for definition of average compensation. what happens if a participant doesnt have three years of compensation - how does this affect the calculation of the 415 limit for that participant?

Hello,

Have not worked with an LLC lately. Recently came across a small SH 401(k). 3 partners. All 3 partners have appx same membership %. With lowest at 32%. His SE earnings (Box 14a) was $315,838 for 2011. I recall deducting Sec 179 from that ($12,083) and then I believe you deduct deferrals ($22,000), the sum of which you multiply by .9235 (.9435 this year) then multiply that sum by .0145 of which you deduct from the previous sum(after .9235), which you arrive at earnings to calculate SH match/p.s.? Am I on track? Wayyyyyyy off?

Now that we can no longer use the IRS forwarding service, does anyone use a good company to search for lost participants? Google does not always work.

Has anyone else been notified by their clients about receiving a letter from the IRS stating the 2011 Form 5500 is not signed? We received two so far and both submitted in May 2012 electronically through EFAST2. I don't understand why we are getting these letters and I wanted to see if anyone else was getting them.

C corporation with Esop wishes to make deductible dividend payment to esop participants. Instead of writing checks to

each participant it would rather make direct deposits into their checking accounts. Are there restrictions on doing this?

Do they have to give participants a choice? Can they give some participants this choice but not others? Thanks.

I pay for my employees medicare supplement and medicare part d through my business. I just read that the medicare part d is not deductible in 2013. Is this true.

Thank you.

*edited to delete post*

A plan has missed it's July 15 contribution of $25,000. To cure this at once, my understanding is that sponsor should contribute $25,000 now. He would not have to contribute a greater amount now that reflects the 5% penalty and extended discount. However, before the year's contributions are completed, the sponsor will have to contributed enough so that the discounted contributions, including penalties, at least equals the plan minimum.

Does anyone belief that in curing the missed quarterly, that the delay and penalty would have to be recognized at that time the curing contribution is made? E.g., contribute $25,437.

The attached court decision found no responsibility to reinstate a 401(k) account that an ex-wife stole from her former husband.

The participant neglected to change his address in the plan's records when he moved from the marital residence.

The ex-wife used a plan mailing with information about identity-control procedures to change the participant's password.

Comments?

Foster_v_PPG_Industries.pdf

Any feedback would be appreciated.

I have a current plan that is a safe harbor match plan with a formula of 400% of the first 2%.

The prototype for the enhanced match section reflects that the match percentage must be at least 100% (so 400% works fine, but then the section for the salary deferral to be matched has a parenthetical indicating that no less than 3% can be inserted.

As this 400% of 2% meets the enhanced matching formula, do you think ignoring the "insert a percentage not less than 3%" parenthetical put the plan in off-prototype status?

Seems like a crazy parenthetical since the formula inserted meets safe harbor requirements or it is not a safe harbor contribution plan, but it is sitting there in the adoption agreement.

thank you in advance for any feedback.

When moving funds for a lost/missing participant from a terminating DB plan to the PBGC, what 1099-R code is used for the distribution from the plan?

Even though it's not an actual "rollover", would Code G be appropriate?

Thanks!

My client is planning a sizeable reduction in work force this week, one that will impact more than 20% of their domestic work force and therefore result in a partial plan termination of our 401k plan.

1) Do they need to notify participants in any way about the PPT and if so, what timelines are attached to this notification? If notification is required, is it only those participants affected or the continuing (non-affected) employees as well?

2) Some of the employees who will be notified next week will be kept on up through 3/31/13 in order to complete some projects. Since they will be notified next week but will remain employed what time period for the PPT determination can stretch beyond one plan year if circumstances require it. Does that mean that the PPT period would be from 1/1/12 to 3/31/13? and if so any employee involuntarily terminated (even for performance) between 1/1/12 and 3/31/13 would need to be fully vested?

If compensation is earned in the last pay period for the year but not paid until the next year, which year would this compensation fall under?

Can someone provide me with the actual Section of the law where I can find the answer?

Is there an issue with a sole proprietor transferring stock in-kind as a contribution to his Db Plan? He has two accounts with the same vendor. One is the trust for the Plan. Rather than sell the stock in the other account and then contribute the money to the Plan and re-buy the same stock, he wants to transfer the shares over. Is there an issue with this? Does the contribution need to be cash?

If an employee transfers to another company within the controlled group, does the employee become entitled to a distribution from the defined benefit plan of the company the employee is transferring from?

A frozen DB plan is now terminating, and for a limited "window" period a lump sum option is being offered. The communications expert (working for the plan sponsor) wants to provide on the distribution paperwork the amount of the lump sum applicable to the participant, but NOT disclose the amount(s) of the normal form of benefit (QJSA) or any of the alternate forms (other annuities, etc.) and only wants to put a general description of normal form and those alternates on the form - requiring the participant to inquire, if they want to know what the annuitized payment stream would be. The comm expert says she doesn't want to "confuse" the participants, nor does she think "anyone in their right mind would select anything but the lump sum" (which, of course, has a more favorable impact on the plan's funding status at termination, costs the plan sponsor less, and which, in my mind is reason enough to have to disclose the values for the other forms of benefit payments).

Other than "it doesn't smell right" and in my mind, it is clearly the much more prudent as a fiduciary to provide all salient information to participants who have to make decision, is anyone aware of any specific authority or requirement for the contents of a distribution request form (other than the tax notice, etc.) that governs the specificity with which alternate forms of benefits need to be described/values provided? I've searched, but haven't found the majic google keywords, nor have I found anything in my ERISA/Code/Regs library.

Thanks.

Any problem with the Buyer in a deal providing credit for prior service with the seller under the 401(k) Plan but limiting that to only selective benefits. For example, if new hires under Buyer's 401(k) must attain a Year of Service to get matching contributions and profit sharing contributions, could the Buyer provide credit for prior service just for matching contribution purposes so that all or nearly all received matching contributions right away but were required to have a year of service with Buyer to get profit sharing contributions?

Suppose you have a safe harbor 401(k) plan.

An Employee participated in the plan for several years, then she terminated had a distribution and returned to work 3 years later. However,

she returned under an excluded class of employees. Normally, she would have re-entered the plan the day she was re-hired.

Can she be excluded by class under a safe harbor 401(k) plan?

I would think so as long as the plan passes 410(b).

Anyone agree / disagree?

We are dealing with an individual who owns 100% of a business with employees. That business does not have a retirement plan. This individual also teaches for a totally unrelated entity on a part-time basis and he is paid for those services on a 1099. Is it possible for this person to set up a SEP and contribute to it with his 1099 income, without having to take into consideration the fact that he is also the owner of another business, and pulling in the control group rules? Thanks!

Does anyone know if FLMA is required for employees working outside of the US but for a US based employer? In some cases the overseas workers are US citizens and in other cases they are not US citizens but have US work visas.

It appears that DOL may have a 75 mile requirement and these employees are located much more than 75 miles away from any employer office employing more than 50 people.

Any idea if FMLA is required? Thank you.