I have a fiscal year plan that I discovered made their 2010 PY (which ended on 6/30/11) safe harbor match deposit on 5/16/12. Our records indicate this PA files as a corp and they are also on a fiscal year.

We were having a discussion as to when the SHM deposit needs to be made. I thought it was required to be made by the end of the following plan year (6/30/12 in this case) but to be eligible to be deducted it needed to be deposited by the time the corporate tax return was due, including extenions.

The company currently has a sole owner; the partnership was disolved in December and he's taking on a new partner next week apparently. I am reconciling the plan's assets a little early since the owner is asking for a loan and I noticed this deposit.

If the deposit is considered late, what is the correction? Thanks for your thoughts!

One of the companies I work on has a non-equity partner who made $350,000 on his K-1.

Is he considered a key employee?

I am assuming that the 350k is more than 5% of the profits.

On what line of the Sch. I should the insurance premiums paid from the plan be included?

Does anyone have, or know where to find, the IRS covered compensation tables in spreadsheet form? I'm looking for as many years as possible. On our pension calculation worksheet (in excel), I'd like to have the tables on a separate tab so we can vlookup the year of birth and year of retirement (which I assume I'll have to manually add in a column).

OR, does anyone know of a better method? Is there a calculation or add-in perhaps?

Thanks.

Client wants to have participants complete enrollment forms at hire to attempt to increase participation - eligibility is age 20, 90 days, quarterly entry (calendar year plan) - the payroll system has the rules for eligibility entered so elections can be entered at the time of completion and automatically go into effect when eligible, what are peoples' opinions on having enrollment forms completed so far in advance of entry date? Definitely seeing issues with those folks under 20 (and this employer has a fair amount of them) and issues with the SPD and SMM's - My thought is just to relax plan entry to date of hire, no age - the main goal is to get people started participating early and catch them when they are completing the rest of their enrollment forms... (or at least eliminate the age 20 rule)

Any thoughts would be appreciated....

Can anyone help me out with adp testing, I have a HCE who gets refunds and he wants to know if by making Roth contributions would that bypass the testing since its after tax?

Does anyone know of a document provider who has an approved DB/K prototype? Relius and Datair do not. Ft William says they do, but it is separate DB and 401k documents wrapped together with a third document. Just looking at options.

Hello,

I am completing a 401A comparibilty test.

A key employee has been eligible in the past and now for 2011 works under 500 hours.

the key employee still works for the company but will not receive a employer contribution because the hour requirment is 1,000 hours.

Can I include her on the 401A test or do I not include her because she did work under 500 hours.

Thank you

Our directors deferred compensation plan has an operational failure with respect to a former director. Whether or not she is still considered to be a director will impact which correction we use. She was no longer a director at the time of the failure. The more concervative approach is to treat her as an insider, but I'm not sure this is appropriate since the language in Notice 2008-13 contemplates the present tense "is a director."

Any thoughts?

Say you have a safe harbor matching contribution formula. Definition of compensation includes bonuses. (and bonuses are determined only at the tend of the year)

Employer wants to amend definition of compensation, for purposes of the safe harbor match only, to exclude bonuses. Let's assume the compensation paid for 2012 under the modified definition of compensation will pass 414(s) testing.

Can this be done for 2012? This isn't per se a reduction in the match formula, only a reduction in the definition of compensation to which the formula applies. I think it is ok, but I'm concerned that I'm missing something.

In the past, a plan's 5500 was produced using a cash basis. They are now our client. We generally do the forms on an accrual basis for our clients.

If we change it to accrual, how do we go about it?

Small plan filer. Just adjust in other income what's necessary? Any thing else? Is there a footnote somewhere?

Lets say you have a 401k plan in which you are using net compensation to perform the ADP test. The plan fails the ADP test so you need to calculate returns. Lets put some numbers to this:

NHCE ADP is 3.25%

There is only one HCE with the following info:

$120,000 gross comp

$12,000 in 401k

$1,200 in 125

HCE ADP is 11.24% ($12k / ($120k-$12k-$1,200))

You use the two step leveling to calculate the return.

Is the return $6,393 ($12k - ($106,800*5.25%))?

Or is the return $6,074, which is calculated as follows. If the participant deferred 5.25% of net comp the would have been able to defer......$120k-$5,925-$1,200=$112,875. $112,875*5.25%=$5,925. $12k-$5,925=$6,074

We have a client with 100+ individual Fidelity accounts. We advised them to aske Fidelity what they would be providing for 408(b)(2). Fidelity's representative's position was that they are not subject to 408(b)(2) on these individual account arrangements and the fee information for 404(a)(5) was provided when the account was established.

one-day later...

We now have a letter from a different client, from Fidelity that they are subject to 408(b)(2). It seems the representative above is ignorant to the policies of the company.

For the participant count on the 5500-SF lines 5a-5c, the instructions on page 11 say to include “retired or separated participants entitled to future benefits. This does not include any individual to whom an insurance company has made an irrevocable commitment to pay all the benefits to which the individual is entitled under the plan”.

Would this mean a 403(b) account? Or would this apply when a defined contribution plan has purchased an annuity for a participant as a distribution option?

Thank you.

I have a question regarding New Comparability Plans when testing under 410b and 401a4 as to which employees are part of the testing.

Example#1

Law firm – partners, associates and staff

PS New Comparability – all EES are Eligible - PS contributions only to Partners and Staff – zero for Associates

410b Test – passes (Associates are HCE)

410a4 Cross testing – Rate group based on all employees including Associates

Example#2

Law firm – partners, associates and staff

PS New Comparability – All Employees are eligible except for Associates who are excluded

410b Test – passes (Associates are HCE)

410a4 Cross testing – Are Rate groups based on all employees including the Associates or are Associates excluded from the denominator of the rate group percentage since they are not eligible employees and the plan passes 410b without them?

If any of the rate groups are less than 70%, then an ABT is required. Are the Associates included in the ABT?

Example#3

Law firm – partners, associates and staff

PS New Comparability – Only includes Employees of company #1 – only have Partners and staff (there are no Associates in company#1).

Company#2 only has Associates and are not eligible for company#1’s PS Plan

Company#1 and Company#2 are part of the same controlled group.

410b Test – passes (Associates are HCE)

410a4 Cross testing – Are Rate group based on employees of company#1 and not company#2 (Associates)

ie. Company #2 are excluded from the rate group percentage denominator since Company#2 employees are not eligible employees and the plan passes 410b without them?

If any of the rate groups are less than 70%, then an ABT is required. Are company#2 employee (Associates ) included in the ABT?

Can I include company#2 employees in my Rate Group testing even though the plan passes 410b and excludes them? Does Permissive Aggregation come into play?

We terminated our Erisa 403b Plan and our final 5500 was filed in 2010. I have just been informed that there were two distribution checks from 2008 that were never cashed and the funds were returned to the "closed" 403b account on 6/15/2012. I am in contact with the two participants and distribution paperwork is being completed to remove the assets (again). What are our reporting requirements in this situation?

Background: DB PLan SPD correctly states that any retiring participant, single or married, may elect an alternate beneficiary for joint and survivor options, with instructions that if married, must provide the election notarized. No other clear instructions or form. When employee retires, this option is not communicated on retirement paperwork.

Question: Plan intends to move forward and communicate this information for new retirees, however, does the plan need to go back in time and offer this to all existing retirees?

A company is considering a DC plan design with a 401(k) feature...100% match on up to 5% of compensation (414(s)). Autoenroll at 3% with 1% per year autoescalation up to 10%. Immediate vesting on the match in cash which will be put in the person's account after each pay period and follow the participant's investment direction. In addition, there would be a discretionary profit-sharing non-elective (I guess) employer contribution. It would be paid 2x per year based loosely on company performance for each associated 6 month performance measurement period. The range would be 0-6% of compensation with a target of 2%. This employer contribution, too, would be immediately vested. One condition being considered for the profit-sharing contribution is that an eligible participant would have to defer some pay (only allowed to defer in 1% increments) for all pay periods in the 6 month measurement period to get that associated allocation. If he/she elected not to defer for one pay period, he/she would not get the profit-sharing allocation for that period (true for HCEs and NHCEs). For those hiring in the 6 month period or terminating/retiring in the 6 month period, as long as they deferred for all pay periods during when they were employed, they'd get the profit-sharing allocation. Some believe the profit-sharing allocation can't be tied to this requirement. I've spent a fair number of hours researching and can't find any guidance/opinions that are spot-on for this.

Thoughts? If you think this is definitely allowed or definitely not allowed and can provide the citation or reference, it would be appreciated. Thanks.

A local benefits attorney is telling me that the in-service withdrawal option for a profit sharing account is not available if the plan uses an integrated formula for the profit sharing. Is anyone familiar with this rule? I don't know what he is referring to.

Thanks!

Does any have a format to share, or directions to, the current FAS 87 (I know, it has been renumbered somewhere by the AICPA) report for defined contribution plans? Apparently the CPA for a client no longer will do it, or they changed CPAs or something.

Thank you.