We have an employer who wants a projection for a 2022 profit sharing contribution. Client insists that the bonus being PAID in February or March of 2023 (which is based on 2022 compensation) will be reported on the 2022 W-2.

I don't see how this is correct, or possible, and although it isn't our problem (we use the projected figures we are given) and it is only a projection, I'd still like to confirm that I'm not crazy (on this issue - be nice!)

Hello,

We are an RIA firm with expertise as 3(38) fiduciaries. We are trying to partner with TPAs as we have incredible expertise in the Collective Investment Trust space and 401k/DB Plans. We make great partners with TPAs as we are a very hands on firm with experts from large 401k providers. 

If you were approached by an RIA, what would you like to hear? What would entice you to work with a 3(38)? 

Any assistance would be appreciated!

Thank you

I have a client that would like to make a profit sharing contribution by her 2021 extended tax filing deadline of 9/15/22 for the 2021 plan year.  We can get the calculation done, but, the existing 401(k) plan does not currently offer profit sharing.  Is it permitted under the SECURE Act to retroactively add a profit sharing feature to an existing 401(k) plan for a prior year?  This is not starting a brand new qualified plan (such as profit sharing or cash balance) retroactively (which is pretty clear in the SECURE Act as acceptable) but instead adding the profit sharing feature to an existing 401(k) plan.

As a side note, if it matters for context, this is a solo plan (husband and wife).

Thank you.

Can someone shed light on the difference between IRR and IRT?  Our BPD Cycle 3 says IRR involves an amount "permitted to be distributed in an eligible rollover distribution" and IRT involves an amount "not otherwise distributable."

An IRR I believe allows in-plan conversion of pretax deferrals at any age.    Beyond that, I'm not 100% and can't seem to find sources that explain this well.

We were to amend a plan to allow in-plan conversion - presumably both IRR and IRT.  Amercan Funds RKD says on their website they do not support IRTs. 

Thank you for your comments.

This may be more of an accountant question, but I'm not sure the answer.

We have one plan that was adopted by two employers (one employer is owned by the husband, the other by his wife).  When it comes time to fund the contributions, do they need to be funded by each employer or can one employer fund the entire contribution (including the other employees)?

In other words:

Employer A - 5 eligible employees
Employer B - 5 eligible employees

Does Employer B have to fund the portion of the contributions for their employees or can Employer A contribute (and deduct) the entire amount?

I have a client that never makes employer contributions anymore but they have a balance in the forfeiture account. I've tried getting the plan specs for fee payments set up so that fees will first come from forfeiture account then from participant accounts. But every time I try and post the fees it all comes from participant accounts and the balance remains in the forfeiture account. Can anyone help with this? Can I do this through a forfeiture adjustment transaction? 

Nothing wrogn with this right, ADP and ACP Safe Harbors still apply?

Yes I know about the 415 limits and will caveat about that.

I will like to know if profit sharing and pension contributions to a plan are tax deductible or not through the state of New Jersey for a New Jersey employer. There are some confusing reports about this. 

Hi everyone! We are a small organisation (less than 10 staff) and have been told by our payroll company that we need to establish a cafeteria plan to be able to do pre-tax health & dental insurance. The payroll company offer a POP plan doc for $400 which includes a NDT kit. We think we qualify for a simple cafeteria plan and if we are right, NDT shouldn’t be necessary. 2 questions: 1-is there anything we should be alert to using the payroll company plan doc ie is that usually ok or should we be getting the doc from somewhere else? ; 2-who could tell us whether we do in fact qualify for the safe harbour ie who advises on this stuff? We are NFP so fee conscious. 

A self employed person with no employees uses a payroll company to handle payroll.  They have no employees and no other business.  

The Owner intended to set up a Solo(k), and the payroll company took $20,500 as a pre-tax deferral for 20,500. The Owner never drafted documents to get a Plan set up and the $20,500 is setting in a  business savings account commingled with other monies.  They have already filed their 2021 taxes.

How would you handle? Would you draft a document and have the move the $20,500 (plus earnings) into an investment account?  And if so, would you also calculate lost earnings due to the late deferral?

Or just tell them not set up a Plan at all for '21 and start with a Plan for '22?

Ugh, these Solo(k)'s can get so messy.  Probably needs to be some more regulations around these so people don't continuously mess these up, IMO.  

A recent court decision treated as proper an individual-account retirement plan’s provision, stated at least on the plan’s beneficiary-designation form, that: “The Allocation % [between or among a class of beneficiaries] must be whole percentages.” The participant submitted a form that asked for “33 1/3%” for each of her three siblings. The court found that—even if the plan’s administrator might have had discretion to accept the not-in-good-order designation (Honeywell argued it did not)—rejecting the participant’s attempted designation was no breach because a fiduciary administers a plan “in accordance with the documents and instruments governing the plan[.]”  Gelschus v. Hogen, No. 21-3453, --- F.4th ---, 2022 WL 3712312 (8th Cir. Aug. 29, 2022) https://ecf.ca8.uscourts.gov/opndir/22/08/213453P.pdf

How common is this whole-percentages provision?

Do plans require a whole-percentages beneficiary designation because the plan’s sponsor or administrator seeks to fit within a recordkeeper’s or other service provider’s software and systems?

If a participant specifies 33%, 33%, 33%, does an administrator reject the form as not adding up to 100%

Or does an administrator accept a form that adds up to only 99% (or 96% for six beneficiaries)?

If an administrator accepts a less-than-100% designation, does the plan or a plan-administration procedure provide an adjustment rule so the beneficiaries’ shares exhaust the whole of the participant’s account?

BenefitsLink neighbors, how does this work in the real world?

Our wonderful Participant Success Manager informed us all that tomorrow, the Friday after Labor Day, is known in the industry as "401(k) Day" - does that make today 401(k) Eve? Just wondering.

Simple enough, an individual who does significant work for herself but does not have a separate business name/EIN.  She wants to start a 401k with her SS#.   Is this permitted?

Thanks

Lump sum distribution is taken, then rolled over.

Just curious about the 1099-R for the distribution. I'm thinking that it is marked as nontaxable (ie nontaxable amount = zero). Or alternatively is there a second 1099-R issued where it is rolled over (doesn't make sense to me but just trying to cover all bases)?

Got a plan that has always been a closed MEP due to common ownership.  For some reason, it was thought by a previous provider that this MEP was open and needed the two employers to file separate 5500s going back to 2018.  My question is how do you amend a 5500 that should never have existed?  The only option I can really think of is to just amend last year's returns and show it as a transfer of assets to the "main" plan and as a final 5500.  

So today one of our very few clients not on our document, tells me he just now is seeing my communication regarding the restatement deadline.  I reminded these clients to contact their document provider to make sure this was done.  It's possible the doctor just doesn't remember signing it.  It is an owner-only plan.  

If it hasn't been updated, what is the fix step?

Thank you

Client wants to amend the plan to 6 months and 1000 hours for eligibility. Currently the plan has 1 year and 1000 hours. Can this be done? If so, are there any ramifications to having this? I have had 6 month eligibility before but not with an hours requirement.

Thank you!

A 401(k) is TH and has SHMAC and prevailing wage. No discretionary match or discretionary non-elective.  Is 3% TH required?

Realtor is 50% owner in a real estate business with a 50% partner (not related).  Realtor's spouse owns a business 100% - a salon.  No services are performed for each other's businesses.  The Realtor and his spouse have minor children so they are deemed to own the interest in each others' business.  But to be a controlled group they need GREATER than 50% common ownership to EFFECTIVE control I believe from what I'm reading.  Would you agree?

Thank you!

Wondering what other practitioners' thoughts or experiences are on how expenses of the adoption of an embryo could apply under an Adoption Assistance program under Code Section 137?