Plan Effective Date: 10/01/2019 (age & service- waiver who employed on or before effective date)

Mr. B’s hire date 05/04/2019 and terminated on 09/21/2019; Rehire on 07/19/2020

What will be the Mr B’s entry date? Is he eligible to get entry on rehire date or service count will start from Rehire date?
 

 Thanks for your insights!

401(k) Plan has no HCE or Key participants.

Plan allocates TPA fees among all participants in equal amounts.

So those with large accounts will have less than 1% taken out, but a new participant will have 20% taken out.

This doesn't feel right but I am looking for an argument to give the plan sponsor and wasn't sure if there was some kind of discrimination issue.

The one who makes this decision is getting less than 1%.

Maybe it's simply that that is not 'reasonable'.

Client recently received an email from DOL--Office of the Chief Accountant, Division of Reporting Compliance--indicating that their 5500 for 2020 is missing.  The email includes an invitation to consider participating in DFVCP to pay reduced penalties for failure to file in a timely manner.  Email also provides links to DFVCP FAQs, one of which notes plans are eligible to file under DFVCP so long as they have not received written notice from the Department of a failure to file their 5500.  Huh?  We've seen situations where folks received notice from the IRS and then filed under DFVCP before any DOL notice but this DOL notice appears to be the first notice the plan has received.  Is the email they received sufficient to prevent them from using DFVCP or is this short of the disqualifying notice indicated in the FAQs.  Is this a new process or have we just not been privy to this before?  Thanks for any insight you can provide.

plan year end 9/2021   

Particiant  DOB 2/1/1940

What factor do I use?   the old table  17.9  or new table   19.3    to calculate the RMD

I am using the plan assets as of 9/30/2021

I remember seeing something about future interest crediting rate assumptions for Actual ROR plans to help pass non-discrimination and minimum participation tests.  Does anyone have any reference for this.  I'm looking at something where the actual ROR was less than 1% so I am having difficulty with my rank and file passing minimum participation using that as my projected rate.

A standardized prototype is deemed to pass and allows you to give nothing to an employee who terminated with less than 500  hours.  I have a volume submitter document that has each person in their own group. Can I exclude this employee form testing?

A plan participant has 3% stock ownership in the company sponsoring the plan. If you add the stock he is entitled to under their ESOP he would have just over 5%. Would stock ownership under an ESOP be considered in determining who is a greater than 5% owner for purposes of having to take an RMD?

Thanks.

I have a law firm that has approximately 25 partners.  There are a few that are more than 1% owners but their net earned income is below $150,000 and this makes them non-key.  Is the law firm required to fund the top heavy minimum or is this an obligation of the partner who is a non-key employee?

Looking at a possible takeover plan.... it is a Profit Sharing Plan no deferrals comingled asset account. The plan was always valued on December 31 and document reflects that.

However in early 2020 due to the major decrease in assets, the plan was run quarterly 3/31/2020 so participant distributions would reflect the reduced assets rather than paying out the 12/31/2019 account balances. The prior servicer never ran the rest of the quarters for 2020 and instead ran the 12/31/2020 report for the period 4/1/2020-12/31/2020. Document was never amended to reflect the change to quarterly.

This is the first time I have seen this situation, what are the implications for not valuing the all the quarters for 2020 and going back to annual? and what about the lack of amendment to quarterly?

Any help is appreciated

I have a small plan that has a couple of companies, a control group.  The owner of course earns compensation from each company.  When calculating the contribution the compensation I would  use would be the total he earned from all companies, correct? As I write this it seams like a no brainer but I just want to be clear.

Hi, 

Plan sponsor wants to terminate the profit sharing plan and wants to set up a traditional 401k plan may be within 12 months time, I believe they will still need to complete the 12 months waiting period post the last distribution and then set up a 401k plan.  If they set up a traditional 401k plan within 12 months time this will still lead to successor plan?

Thanks

Does anyone know whether the price an employee pays for the grant of an option can count toward the price of the exercise of the option for 409A-exemption purposes?

In other words, say employer's stock is worth $10 per share on the date it grants an option to an employee. The employee pays $9 per share for the grant of the option itself, and the price of exercise is $1 per share. A few years later, employer stock is worth $20 per share. The employee pays $1 per share to exercise the option. 

Under the 409A definition of "exercise price" it seems that only the $1 is considered ("...the consideration in cash or property that, pursuant to the terms of the option, is the price at which the stock subject to the option is purchased...").

Under 83, both the $9 paid for the grant and the $1 paid for the exercise would be part of the "amount paid" for tax-calculation purposes.

But would this blow the 409A option exemption?

I have a client that is US citizens and lives in the US. He work in the Cayman Island a few weeks a year and picks up the income on his Sch. C of his 1040. Can this income be used towards retirement contributions. I believe it is subject to self employment taxes.

Good Morning,

Hoping you all can help with a question....

I have a plan with safe harbor match and discretionary match.  1000 hour and last day requirement on the disc match.

When running the 410b test, FTW test both the sh match and the disc match contributions as one component in the 410b test.   Since they are actually two different money types do they need to be tested separately? 

appreciate your help!

So we have a client that missed a 401k deposit for 1/5/2021.  The total missed deferrals was $330.

The lost earnings was $11.14.

The 15% penalty is $1.68.

The question i have does the IRS have a deminimis rule for self-corrections like this or do they need to file 5330 and pay the $1.68 penalty.

Just looking for some clarification/thoughts on how best to handle.

A TPA told an employer that charges for flavorings added to Rx medicines (usually for kids) are not reimbursable under an FSA. Has there been any IRS guidance on this issue? I can't find any. TIA. 

Was unable to find an answer to this on the forums or in a google search.

Plan

Plan matches 100% of employee deferrals up to safe harbor match of 3%.

Situation

Employee is accelerating deferrals which lines up to the concern that the employee will be jumping ship and has been slacking. The deferrals are not (likely) sustainable (20% of salary??) so the goal appears to be to max out the employer match. 

ADP contributes 3% of our match to the employee's 401k. 

Query

Will we have to true-up the employee's match if they quit in March/April/May but have contributed their full 3% already? (e.g. employee makes $150k. We have contributed $1.1k by March based upon ADP's approach. Employee has contributed the full $4,500 by March. Do we have to true-up our contribution to match theirs even if they were only a member of the plan for 25% of the year?

I have a single member plan which is funded solely by ROTH money.  His CPA told him he didn't need to take an RMD because it was ROTH money.  In the case of an IRA an RMD is not required as long as the owner is alive, so that is good advice for his IRA accounts.  But I have read that when it comes to a qualified plan it doesn't matter if it is ROTH money or pre-tax money... an RMD must be taken.

Right so far?

That said, how would a ROTH RMD be taxed?  It wouldn't?

Thanks

This type of plan does not need to cover 401(a) (26). If running a 12/31/21 valuation and the lookback is month  prior to plan year beginning (ie month prior to 1/1/21 is 12/31/20) for 417 e rates. Since the factor in determining if the plan is underfunded is "Plan does not have sufficient assets to pay all benefits".

In Realty, the benefits would not be paid out until at least 1/1/2022. Therefore, can the 12/31/21 417(e) rates (month prior to 1/1/22) be used to determine if the plans benefits (PVAB) exceed the the assets? Thank you for any insight son this.

A and B are a CG (100% owned by one individual), they want to establish a plan, all employees of both entities will be covered.

A employs its staff thru a staffing company C.   C is 50% owned by the owner of A and B (other 50% unrelated ownership), so it is not part of the A&B CG.

C has absolutely no other functions.  It pays A's staff and gets reimbursed by A, that's it.  The employees are hired, fired, directed, controlled. report to, and in all respects managed by A.

It seems to me that under RPs 2002-21 and 2003-86 that these C employees are common law employees of A only.  In fact, if C sponsored a plan and wanted to cover them, it could not do so on its own.  It would have to set up a multiple employer plan with A adopting to comply with the RPs.  

Question 1 - Do you agree so far?

Now there is another company, D, that is a CG with C (80% ownership overlap by 2 owners).  D has employees and its own 401(k) plan.

It seems to me that since the "employees" paid thru C on behalf of A should be considered common law employees of A only, that A and B can proceed with their plan without regard to D.  It also seems that D can maintain its 4k plan without regard to C, as C has no common-law employees.

Question 2 - Do you agree with this?

Any other thoughts?   For the record none of these are service orgs.

Thanks.