Has anyone ever heard of airline tickets provided for pilots qualifying as a benefit under mass transit account?  

A non-profit client of mine with a 403b absorbed a smaller NFP with a 401k plan.  I told them that the two plans couldn't merge.  The participants are all being retained as employees, but obviously under the surviving employer NFP.  I've still got nightmares of the same-desk rule swimming in my head - are these people considered "terminated" and therefore can roll their 401k money into the 403b plan as rollovers?  Or is an IRA their only option?  Thanks.

Have any TPA's electronically filed the late fee, using the TPA's Banking information? If so, or not, what issues have you had - or why are you hesitant to do it? I was clearly the fault of their prior TPA - but as a matter of courtesy, we would like to pay the fee.

Thank you.

Looking at a takeover plan here, and something seems so strange that I'm questioning if there really is a problem, or if I'm cracked for thinking there is!

Plan document specifies plan year is calendar year. Fiscal year is 4/1 - 3/31.  Compensation period selected in the document is plan year (calendar).

Prior TPA (and probably in conjunction with CPA, I don't know) has been doing things as follows - we'll use the 2020 plan year valuation to illustrate, and same procedure was followed for prior years as well. 2020 valuation was based on PLAN year (calendar) compensation and hours for 2019. The 2020 valuation was run in December of 2020, (based on 2019 calendar year compensation/census) so client could deduct 2020 plan year valuation on their 3/31/2020 fiscal year tax return.

Ignoring for the moment correcting the past operational violations, what might you think is the best way forward? The plan year could be amended to coincide with the fiscal year - run a short plan year for 1/1/2022 - 3/31/2022, then full year thereafter. It seems to me that this is the cleanest way forward, although they could also, for example, amend the plan to use the fiscal year ending in the plan year as the compensation period.

Am I nuts?

I know the SECURE Act removed the requirement for Safe Harbor notices for non-elective Safe Harbor contributions.  I just wanted to make sure that it applies to both the 3% Safe Harbor and the basic Safe Harbor Match? 

Thanks in advance!

Client has a profit sharing plan (non-401k).  He lets about 15 people go which results in over 20% of the participants being terminated.  Then two more quit within two weeks of the others being let go.  The question is about the two who voluntarily quit....are they also 100% vested or not?  I have no idea if they were encouraged to quit or not.  

Long time listener, first time caller...

One 501(c)(3) (Org A) that sponsors a 403(b) plan with a non-elective deferral is taking control of the board of another 501(c)(3) (Org B) that sponsors a 401(k), also with a non-elective deferral. The preferred outcome would be to continue to maintain the plans separately as the organizations will continue to exist and operate separately.

For 401(k) testing of elective deferrals, I see 26 C.F.R. § 1.410(b)-7(f) disregards 403(b)s for testing. Furthermore, 26 CFR § 1.410(b)-6(g)(3) allows 403(b) plans of a 501(c)(3) organization to be excluded for 410(b) purposes. However, one of the conditions is that "No employee of an organization described in section 403(b)(1)(A)(i) is eligible to participate in such section 401(k) plan or section 401(m) plan."

I also found this IRS language that would seem to suggest the intent was to allow one to keep these plans separate.

As for 403(b) testing, it seems optional whether to include the 401(k) employees.

Questions:
1) Since Org B is also a 501(c)(3), would it not meet the requirement under 26 CFR § 1.410(b)-6(g)(3)? I'm concerned that Org B's employees are eligible to participate in a 401(k), or would they be treated as separate?
2) How does 26 C.F.R. § 1.410(b)-7 relate to 1.410(b)-6(g)(3)?
3) Is it correct that for the testing of Org A's 403(b) Org B's employees could be excluded? Is there more guidance on this?
4) Since both plans include non-elective deferrals and it seems that the 403(b) employees cannot be excluded from testing for the non-elective deferral of the 401(k), is there any sense in even trying to exclude employees and avoid testing a controlled group?

Plan terminated in 2018.

Owner still has assets and continues to file Form 5500.  (Life Insurance...)

Plan still needs to restate, right?

One of the Terminating plan there was a excess employer match for 7 part's ( profit sharing) out of 7 asset was recovered for 1 since the other 6 had already taken distribution ROE letters have been sent.  Since the plan is Terminating Plan sponsor would like to know how we can recover the assets since none of them are responding.  I informed the plan sponsor they can fund/send the excess amount so that we can post the OM (orphan match) into the forfeiture account and they can letter recover the assets from the part's however the plan sponsor does not want to send in the amount in this case how can the excess be handled since the plan is terminating.  What other option the plan sponsor might have? 

Thanks

Hello, 

I am working on a profit sharing plan with partners paid on K-1s.  They are both Canadian citizens.  The CPA stated that because of that, they aren't subject to self employment income tax.  Normally I would take line 14a and do all the required calculations/deductions.  But if they aren't subject to taxation, do I simply use line 14a for my calcs and testing?  Someone in my firm indicated that, but it seems a little too easy  

Thanks!

Kat

Curious how others are reporting those covered participants at the end of the year who are furloughed (receiving benefits as per ARPA).  Active or terminated?

In announcement 2020-07 there is this passage:

Deadline for Employer Adoption of Pre-approved Defined Contribution Plans
The end of the third six-year remedial amendment cycle for pre-approved defined contribution plans is January 31, 2023. An adopting employer whose defined contribution plan is eligible for the six-year remedial amendment cycle and who adopts, by July 31, 2022, a newly approved plan, will be considered to have adopted the plan within the third six-year remedial amendment cycle.

so... Jan 31, 2023 or July 31, 2022?  I don't get the need for 2 separate dates.  

If I have an existing plan and we need to restate the document to comply with Cycle 3  it says above "The end of the third six-year remedial amendment cycle for pre-approved defined contribution plans is January 31, 2023"  which I am taking to say you need to restate by 1/31/23.  Or do I need to have them restated by July 31, 2022? 

What is the IRS is trying to convey?  What am I missing?

HCE terminates 3/31 of a calendar plan year.  The plan itself does not terminate or have a short plan year.

HCE earns $300,000 for that plan year.

For purposes of benefit calculations, for 2021 for example, would the comp be limited to $290,000, or $290,000/4= $72,500?

Generally when a plan terminate testing is done for the short plan year, one the plan that is terminating in November could like to know if the 401k limit will be the same for they part's since they are will not contributing in any other plan so will the limit be the same? will the testing be for the short plan year. 

Thanks

A client is the adopting employer of a cash balance volume submitter plan and wants to terminate the plan. The plan document allows the employer sponsor to terminate the plan.  The issue is that the plan is vastly over-funded and the plan sponsor wants to amend the plan to add 30 new employees by lowering the plan participation requirement from 1 year to 0 years and then make the maximum 415 distribution to each of these participants prior to termination to avoid most of the excise tax. First, I have concerns that this is not a permissible amendment by the employer for a Volume Submitter plan pursuant to Rev Proc 2017-41. If its not a permissible amendment then it seem the plan losses the protection of the Volume Submitter opinion letter but what is the consequences of this if the plan is terminating anyway. Is there a problem with adding 30 new participants to distribute plan assets prior to termination to avoid the excise tax?   

I have a 401(k) Plan whereby a non-owner participant who is older than 70.5  terminated on 11/02/2020.  Her First Distribution Calendar Year was 2020. She was rehired on 02/26/2021 and has been working part-time. Does she need to take a RMD for 2021 and future years.

Does anyone know when you must file the 5500-EZ given the below circumstance?

"My account was closed and all assets were dispersed earlier this year from my Solo 401k plan."

Would the 5500-EZ need to be filed within 7 months from the month of full distribution and account closure or can this person file the 5500-EZ by July 31, 2022 if they are on a calendar year schedule? Does any of this depend on when the 1099-R is received?

All help is appreciated!

-Jolly

If A & B are the Trustees of a plan, and the plan is restated naming C & D as Trustees, does that have the legal effect of removing A & B as Trustees? Or is a separate formal removal required? I don't see that the document directly addresses this issue.

Can the assets of a qualified governmental retirement plan (defined benefit or defined contribution) be used to pay premiums for insurance to provide welfare benefits for active public employees? I am aware of 401(h) for retiree medical and 402(l) for retired public safety officers, but can this be done for actives? If your answer is "up to the amount allowed under the incidental benefit rule," do you know where I can find an understandable summary of that rule? 

Thanks!