A client in a self-directed 401(k) plan owns land within the plan. He is now in the process of building a house on that land funded with personal money. He of course plans to use this house as a vacation home.

I can't figure out a way for him to correct this situation to allow him to use the house. He can't use the house on the land owned by the plan = PT. He can't buy the land from the plan = PT. Unless there is some exception that I am not seeing.

If an exception doesn't exist, anyone know the process to apply for one?

One other fact: he can't distribute the land from the plan. The money consist of sources ineligible for distribution pre-59 1/2.

calendar year safe harbor 401(k) plan with safe harbor basic match. Plan specifically excludes a category of employee that they call "TAR" (time as reported) which is basicially a per diem definition.

There are 2 employees who were full-time & participating, went part-time continuing to participate and now are moving to the "TAR" category as of July 1st.

After referencing the Plan Doc info these participants are no longer eligible to defer and receive the safe harbor match. I also believe, although cannot find it clearly stated, that they cannot receive distribution of their vested account balance until they completley sever employment.

My questions really relate to their eligibilty to make a deductible traditional IRA contribution - Are they considered "covered" for 2011 since they were active in the plan through June 30th? Therefore 2012 would be the first year that they can make a deductible IRA contribution (depending on their AGI)?

I am trying to establish an approach to administering a db plan after a plan freeze where the doument is silent re: 415 application after plan freeze.

In other words let's say a plan sponsor freezes a plan's benefit accruals and makes no mention as to how 415 will apply after the plan freeze.

So, essentially, the plan would have to handle 415 limits in accordance with statutory requirements. That is, the plan provisions has the basic 415 statutory language in place.

With that said, I make the following interpretations as reasonable (or at least not unreasonable) with regard to application of various aspects of 415 benefits for plan admin purposes:

1. service credit and participation credit continue for 415 purposes (of course participant must work requisite hours in plan year)

2. hi 3 avg comp continues and thus a participant's hi 3 avg can increase after plan freeze

3. cost of living dollar limit increases still apply

Of course the accrued benefit is frozen and if such benefit is below the 415 limit at time of freeze then the 415 limits may have no effect on such benefit. However, if act equiv is say 5% and participant chooses lump sum, then the increase in 415 benefit can enable participant who has annual benefit below 415 to receive a higher lump sum that might have otherwise been limited by 415 lump sum limit.

So, if it is desired to have 415 freeze at time of plan freeze as well, than drafting the amendment to freeze accruals and freeze 415 benefits would be the suggested approach. That is, explicitly address the matter.

Thanks and welcome other views.

A cash balance plan provides a credit which is tested to find out if it's meaningful under 401(a)(26).

I don't see a measurement date for this tied to anything specific in the plan document. Must the date for determining its "meaningfulness" be the 1st day of the plan year or can the last day of the plan year be used instead?

studying for the ASPPA DB exam and am not sure what this means & when it may occur:

the book is referring to reasons that an employee is considered as benefiting for coverage purposes if a premium in not paid for specific reasons. One of the reasons given is:

"The benefit previously accrued by the employee is greater than the benefit that would be determined under the plan if the benefit previously accrued were disregarded."

Your help is appreciated!

If you change the look-back month on line 21(b) --

(1) Do you check YES on Line 24? (If yes, how do you justify?)

(2) Do you check YES on line 25?

Thanks for all responses.

My boss did a contribution calculation for a sole prop uni-k, and now I am left to complete (ir print) the 2010 valuaiton. The plan's doc says comp is 415c3 with no exclusions (she did the document also). The comp that is reported in the system is $24,000.00. The deferrals reported are $22,000 (with an age reported as 50 for 2010). Boss calculated a profit sharing allocation of $4800. This leaves a total of $26,800 in total contributions for the year. This is more than the person's comp for the year. I think that is why I am getting the message. thoughts? We have Datair, so I am also going to post this on their message board to see if maybe it's a glitch and something that can be ignored. This is the first year for the plan, so no 5500 filing is needed, due to the amount. Thanks for your thoughts in advance!

I have been working for a group benefits brokerage for about seven years now, and I am thinking of applying for some in house jobs as a Director of Benefits.

My experience at the brokerage house includes all aspects of rfp, selection, design, implementation and communication of all types of employee benefits and wellness programs. However, I have never done the HRIS stuff, although I am a quick learner.

I have my CEBS and interview well but am curious if anyone has made the jump, if they have some advice as to how I should portray my experience. Also, if any inhouse people who have hired for fairly senior benefits jobs, do you have any advice for me to make the jump. I really don't want to start at the bottom of the benefits chain in house.

Thanks

back in october 2010 final regs and proposed regs were released in connection with cash balance plans.

when do plans need to adopt amendments to comply with the regs?

Not sure if the plan document providers like ft williams have done anything in connection with the regs?

I saw one of their documents that did not incorporate the regs; not sure how current it was.

thanks

If the Employer hands out the annual Safe Harbor Notice (detailing the 3% safe harbor contribution for the year) to only select Particpants and not all participants, has the required notification been satisfied? Would the contribution be due for all possible participants or only for those who received it?

Thanks

Stan

Hi,

I recently found out that my employer has failed to make safe harbor contributions for 2006 - 2010 to my account and even his own account which were required as part of the plan. I left the company in a downsizing in 2009. Late in 2010 he elected to revise the safe harbor part of the plan and made the 3% contributions optional. I am owed approx $11k. The plan administrator says they sent certified letters to my employer alerting him to make the contributions. My former boss claims his secretary threw them out year after year. All of my payroll contributions from my check however were made. My question is - what are my options at this point? The plan administrator claims they never called my employer about this and relied on the postal letters. The plan administrator knew contributions were not being made, but never contacted the employees to let them know. The plan administrator says they did what they were supposed to. Is that true? Should they have notified employees that contributions were not being made by my employer? The employer's business is almost bankrupt now and he is promising to pay, but I doubt it. Will he be able to shirk his responsibility to the plan in bankruptcy? Will the IRS go after him? What is the best thing I can do to recover my funds?

Thx for your help and input!

Rocky

I'm not familiar with a lot of the rules for SEP plans, so I'm hoping a SEP person can help me out.

Is it possible under a prototype or individually designed SEP to exclude one or more of the HCE's from the plan?

Thanks for your help!

I am trying to determine if the following provision related to retirement is a valid risk of forefeiture under Code Section 83 and therefore 457(f). The plan makes payment within the short-term deferral period and I am aware of the IRS's intentions to publish guidance defining a SOF under 457(f) as it is defined under 409A. Assume the participant is 54 and has no plans to retirement anytime in the near future.

Participants will become vested in contributions credited to their Accounts on the earliest to occur of the following events:

(a) death;

(b) termination of employment due to a Total and Permanent Disability;

© termination of employment in connection with a Retirement (defined as a termination of employment on or after age 65); or

(d) the fifth anniversary of the date the contribution was made to the Account.

If a Participant’s employment terminates for any other reason before one of the above events occurs, any contributions which were not previously vested will be forfeited so that no benefit will be payable under the Plan.

Hi,

I think I know how I should handle this, but wanted to run it by someone else.

I have a client with a Uni-K. He has 2 separate Schedule Cs, no employees for either. Controlled group will apply. One Schedule C has income, the other has a loss. The Uni-K is set up under the Schedule C with income.

My client would like to max out on his Uni-K. Would I calculate the Uni-K deferral and employer contribution on each Schedule C separately (having zero for the C with a loss)? Or would I combine gross earnings from both Schedule Cs and then calculate the maximum contribution?

I believe we have to combine all net earnings (and losses) from both Schedule Cs and then calculate the maximum deferral and match for his Uni-K - but want to confirm that this is correct. I have checked the regs and I have not been able to find specific instructions when multiple Schedule Cs are involved.

Thanks for your help.

Linda

Suppose you have a company with a 6/30/11 year end that adopts a profit sharing plan for the 7/1/10 - 6/30/11 year. Suppose they also have maintained and funded a SIMPLE through 12/31/2010.

1. If eligible employees were not provided a notice for the SIMPLE for the 2010 calendar year, does that mean they had an invalid SIMPLE for 2010?

2. Since they cannot have any plan besides the SIMPLE, I would think they could not make any profit sharing contribution for the 7/1/10 - 6/30/11 year, correct?

3. Had they funded the SIMPLE at all in 2011, they would not have even been able to make a profit sharing contribution for the 7/1/11 - 6/30/12 year.

Thanks a million.

I hope someone can give us some advice. My husband got a new job that offers a FSA. Not knowing about it and having to do it quickly, we had only $360 for the year deducted. Stupid, we know. And there isn't any way to add more.

Moving on. We have a HSA from our previous insurance and would like to keep it. Our family deductible is $8k/$4k for one member so we are pretty sure we can keep it/would qualify. My questions:

Can I have a HSA and use that money for the rest of our medical bills?

Are there any restrictions on what I can spend the FSA dollars on?

Thanks in advance for any advice!!

I'm looking at a DRO that gives a percentage of the participant's ESOP balance to his ex wife. It is not currently in a form that can be qualified due to missing information. In general, are there any details required for an ESOP QDRO that I am likely to be overlooking since I usually only deal with 401(k)s?

Never mind I answere dmy own question but did not know how to delete post

We have a takeover plan in which the prior TPA was carrying on the books a defaulted loan for an existing employee. The loan was defaulted in 2006 and a 1099 was issued in January 2007 for the amount of the default. How long should you continue to carry a defaulted loan like this? This employee is still employed to date, we have no idea why he never made any repayments.

Does anyone know how many 1099-R's are issued if an excess deferral refund is distributed after 4/15?

Using the example below from the ERISA Outline book, the excess ($325) is taxable in both 2012 and 2013. The earnings ($45) are taxable in 2013.

I'm wondering if there would be one 1099 for 325 with a distribution code of P, and another 1099 for 370 with a distribution code of 8. Or, would there just be one 1099 and if so, for how much?

Example. JoAnne has excess deferrals for 2012 in the amount of $325. The plan does not distribute the excess amount by April 15, 2013. JoAnne receives a distribution of $370 on June 1, 2013, which represents the amount of the excess deferrals ($325) plus allocable income ($45). The following tax consequences apply to JoAnne.

(1) For 2012 (i.e., the deferral year), JoAnne must include $325 in gross income, which represents the amount of her elective deferrals for that year that exceeded the income exclusion limit under IRC §402(g)(1).

(2) For 2013 (i.e., the distribution year), JoAnne must include $370 in gross income, which is the total distribution made to her, even though $325 of that amount was also included in her 2012 income.