Say a plan has a safe harbor 3% nonelective, and provides the 3% to all employees. If mid-year they decide they want to amend to provide only to NHC, can they do this?

Since the safe harbor regulations provide only that to qualify, you mst provide the SH for NHC, it would seem that such an amendment is permissible. However, I think you'd have to provide the 3% to the HC through the effective date of the amendment, give a proper notice, etc...

I've never actually seen such a request, but a question came up. Thoughts?

Employee has IRA account and wants to roll it into company 401(k) plan. It's a regular IRA, not Roth. The IRA is also not a rollover IRA. In other words, it's just a regular IRA the employee has been contributing to, so it doesn't contain any assets from another qualified retirement plan. Is the employee allowed to roll that type of IRA into the 401(k)? I thought only rollover IRA's could be rolled into a qualified retirement plan, and that the same amount that was rolled into the IRA had to then be rolled into the qualified retirement plan?

Thanks to anyone who can help explain this.

I own 100% of an S-corp which provides consulting engineering services. I also own 50% of a c-corp which provides technical field services (electricians, mechanics, etc...). When either firm needs the services of the other those services are subcontracted to the other firm. Both firms have worked for each other at various times, but never for more than 10% of either firm's revenue.

Does this make the S-corp or C-corp an affiliated service group, a controlled group or both?

Can anyone share their opinion on whether salary deferrals under a 403b plan are included in the average benefits test, both when testing for coverage and nondiscrimination. If I use a cross tested allocation formula in a 403(b) plan and I need to use ABT, do I include the deferrals?

I have attached a prior link on this subject. It appears it was unclear at this time. Has anything changed? How is it being done in the real world?!

Thanks!

http://benefitslink.com/boards/index.php?s...+403b+deferrals

A one participant plan had errors in their 2009 valuation and schedule sb and were corrected. It is now a client of mine.

My understanding is that the plan sponsor actually filed the SB with their 5500EZ (of course not required).

I intend to prepare an amended SB for client.

There are no changes to the 5500EZ.

Is it recommended to file the 5500EZ and amended SB with the IRS or just provide revised SB to client since the SB is not required to be filed and no change to 5500ez?

Curious to hear other views.

Thanks

A new client has a noncompliant arrangement that was not timely amended and is not covered by the document correction program. There is no IRS involvement at this point but based on the proposed income inclusion regs, the penalties and interest alone will be significant.

Has anyone been involved with negotiating an IRS settlement following the discovery of a 409A violation that is not eligible under the correction programs?

Does anyone know whether the IRS is willing to negotiate with taxpayers who come forward? Or is the IRS going for every last dime?

Also, does anyone know who or what office at the IRS is spearheading the 409A enforcement initiatives? We'd like to put out some feelers.

Thanks in advance.

Has anyone come up with a practical cost effective way to deal with this situation.

In the last 48 hours we have had a client who had 8 late deposits in 2010 and total lost interest is 12.98 and one that had one total lost interest is <$10.

As far as we can tell you have to compute the lost interest, divide it up amoung the people, file the 5330. In short they are paying us hundreds of $ for less the $15 in impact. The clients just aren't happy.

I realized part of the anwer is just make the 4k deposits in 7 days.

Any insights will help.

I could not find a prior thread, but suspect it is out there. I have not fully mastered this board's search function.

Can a sole shareholder of an S-Corp set up a nonqualified deferred compensation plan for himself/herself? What alternatives are available?

I have a client who has schedule C income from 2 separate sources; one of which has a loss. Does he have to add them together to determine his SEP contribution or can he determine his contribution on each separately? thanks susie

Wondering if anyone has ran into this (I imagine someone has), how is a hardship calculated from the deferral source if no contribution history was provided at the original take over date?

So it looks like we took over plan back in 2002 and have deferral 'transfer' in balance of $4k, I have no idea how much of this was contributions, the employer does not have records going back that far. From there on out we do have records. Is there any guidance out there to these situations?

Thanks!

Can anyone advise on the application of the SEC Pay-to-Play rule (Rule 204(4)-5) to SIMPLES and SEPS? I have been told that it is possible for a government entity, as defined in the Rule, to adopt a SIMPLE or SEP. Anyone agree that this is correct?

Calendar Year Plan has no requirements for a participant to recieve an allocation other than being a participant. No hours requirement, no last day rule. Is it too late to add last day requirement for 2011?? If not, how would this be administrered?? Thanks.

Does adoption date of new plan come into play with regard to the first year AFTAP. E.g., New Calendar Year Plan adopted 11/1/10. 2010 AFTAP normally would be required to be certified by 10/1/10. what are due dates of certifying 2010 AFTAP in this scenario?? Thanks.

I have a client who is part of a series of native corporations. The parent corporation (Corp A) started a 401(k) plan and all other corporations required to be included per the controlled group rules adopted the plan. A smaller company (Corp B, also part of the native corporation) is owned 30% by Corp A so is not required to be included in nondiscrimination testing but it adopted the plan as a participating employer. The plan is a Safe Harbor 401(k). Corp B now wants to "unadopt" the plan and start its own plan (using different eligibility requirements). How would this work? All the employees of Corp B got the SH notice so I think they should at least have to finish off this year and start a new plan effective January 1, 2012. Is it really that "easy" (or, rather, straightforward)?

I posted a while back about my document issue: is a 401(k) plan document prohibited from having safe habor language and APD/ACP language? No nibbles.

Now my question is: do any of you know anything about a National Office Internal Guidance directive from 2002 that flatly prohibits both language variations in one document? Thanks.

I have a plan that distributed excess contributions for the 2009 plan year. Then when their plan assets were being reconciled during the plan audit process, it was discovered that the plan sponsor made some errors in reporting some of the contributions for a few Non-HCEs. This resulted in additional excesses of small amounts ($48) to two HCEs.

The plan sponsor failed to distribute these excesses in 2010 so we are looking to correct the omission using the Appendix A QNEC of a flat percentage to all eligible NHCEs. The One to One QNEC would be too expensive because the contribution has to include the total excess, not just the portion that was not distributed.

Q1. Isn't the goal of the corrective QNEC to reduce the revised excesses so that the ADP test shows amounts equal to the original excesses that were distributed timely in 2010? With the understanding that the QNEC has to go to all NHCEs, not just those who are not otherwise excludable, couldn't I still calculate the QNEC to achieve the original test results based on disaggregation since Appendix A says you can't use disaggregation to reduce the number of employees eligible to receive QNECs?

Q2. The plan document provides for QNEC calculation of a failed ADP using the Bottoms Up method. When the Appendix A correction method mentions all eligible employees, is that a general reference to eligible employees, or does it need to be according to the terms of who is eligible for the QNEC contribution under the terms of the plan document?

Q3. Appendix A states that contributions must be made on behalf of all eligible nonhighly compensated employees (to the extent permitted under Section 415). I've read articles in the past that state plans would have 415 issues if contributions were made past their tax deduction deadline for the year. In my situation, the contribution falls within the deductible time period for the 2010 plan year instead of 2009. There were some terminated participants in 2009 that have zero compensation in 2010. Does the reference to Section 415 just refer to the individual's limit in 2009 and not a warning regarding terminated employees that have zero compensation in the following plan year?

Any quidance on these questions would be appreciated.

Good afternoon, I have a client who has completed a stock purchase of a company and this wholly owned subsidiary has a 401k plan with a 6/30 PYE. The purchasing company has a 401k plan with a 12/31 PYE. The parent wants to leave the sub's plan alone.

How do I test coverage with the two different PYE's? I have not run into this before and I can;t seem to locate any information either.

Any help would be greatly appreciated!

Thank you,

In a prior plan year, a participant in a 457(b) plan sponsored by a tax exempt entity rolled over a distribution to an IRA. The participant received a 1099-R.

The distribution was ineligible for rollover and should have been included in the participant's income when distributed and reported on a W-2.

Does the plan sponsor need to issue an amended 1099-R and W-2? How would it do that when the distribution occurred in a prior year?

Company A had a 401(k) Plan. New doctor was hired. New doctor and older doctor formed new companies. I am not sure if this is the way to say it. But I think both companies became employees of Company A. And both companies became Participating employers in the 401(k) Plan sponsored by company A.

Things went bad and new doctor left. Older doctor removed new doctors company from being a Participating employer. New doctor was partially vested when he left. Do his years with his company after separation count toward vesting in older doctor's Plan?

Employer sponsors combined 401(k) profit sharing and employee stock ownership plan. Participants who wish to invest their 401(k) deferrals in employer stock have their 401(k) deferral amounts transferred from their Profit Sharing account within the plan to their ESOP account within the plan. Is the age 55/10 years of participation diversification election applicable to such amounts? Or would the distribution restrictions on 401(k) deferrals trump the diversification election?