Suppose a 5500 shows an unpaid minimum for one year(2018). If the unpaid minimum is not corrected by the time the of the next 5500 filing(2019) and thus is  reflected on the schedule SB  line 40  and on the 5500SF line 11a  will the 10% excise tax be experienced again on the yet unpaid amount? I know in theory a 100% tax can be imposed but can the initial tax be imposed more than once similar say to prohibited transactions?

The fee disclosure that was provided to participants  didn't include all the TPA fees being deducted from participant accounts.  I can't find anything that addresses what the correction procedure is.   Can anyone offer direction? 

Before I stand accused of wasting time, and know this is not going to fly, but accountant as well as broker did question.

I have a 401K safe harbor with voluntary, after tax contributions.  One of the owners mistakenly over contributed a portion of the voluntary such that he's over 415.

Since voluntary is not deductible anyway, could not the excess be transferred to a rollover account.

I said " no", but I they they're fishing.

Hello all,

I have an interesting problem that doesn't seem to quite fit into some others that I've found here while searching.  Here's the situation:  We are a RK vendor for part of a non-ERISA 403(b).  A participant died naming her spouse as her primary 100% beneficiary and her parents as 50/50 contingent beneficiaries.  Her spouse died 2 days later.

Initially, we believed that he passed without having made a designation himself.  Per the plan document, the default is spouse, then estate.  This would mean his assets now belong to his estate, who wants us to roll it over into an IRA the estate seems to have setup (I know this isn't correct, but it's a topic for another post).  It has since been discovered that the spouse was a former participant of the plan on his own and he did have a beneficiary designation dated in 2009.  His form named his spouse as 100% primary and his brother as 100% contingent.  He took a full distribution of his account in 2016.

The TPA firm, and to an extent the client, is trying to say since he took a full distribution years ago, his beneficiary form is basically null and void as the account was 'closed'.  The beneficiary form doesn't have any language that would nullify it except upon receipt of a new beneficiary form.  My opinion is that his beneficiary form is still valid and in force regardless if he cashed out previously or not.  It'd be no different than if someone left service, took a full distribution, and then ended up with a non-elective contribution 8 months later but died in the interim.  I've tried digging through IRC and even the EOB trying to find any guidance and have not come up with anything concrete enough to prove my point.  Has anyone seen anything like this or have any other places to try looking?

I believe there is a Revenue Procedure that specifies that if a participant had less than 1,000 hours in the prior year (and therefore no benefit accrual according to terms of the plan ), you MUST assume they will have 1,000 hours in the current year. This is for purposes of a BOY actuarial valuation. 

I thought it was in RP 2017-56 or 2017-57, but I cannot seem to find it. 

I’m asking because client (of owner only plan) wants to minimize cost for 2020 and if they confirm <1,000 hours in 2019 we can assume same for 2020 and not have a normal cost. 

An ESOP owns 80% of 2 different corporations; ownership is as follows:

Company A:

80% ESOP
10% Individual 1
10% Individual 2

Company B:

80% ESOP
20% Individual 3

Based on the 80% ownership, is there a controlled group, or is the ownership interest by the ESOP disregarded for controlled group purposes?

We are converting a simple 401(k) plan as of January 1, 2021 to a regular 401(k) plan.  If we convert a participant's balance in the Simple to the regular 401(k) plan can we avoid the 25% penalty tax if some of the monies "converted" have not exceeded the 2 year limit for the 25% penalty tax.  We will continue to maintain separate accounts for the Simple 401(k) and the Simple Employer Contribution accounts in the new regular 401(k). 

Both plans (the old Simple and the new 401(k)) will be maintained by the same employer.  

Sources of money in the new 401(k) plan would be Simple 401(K) contributions, Simple Employer Contributions, Employee pre-tax 401(k), Employee Roth 401(k), and Employer Matching Contributions.

FYI, this is not a Simple IRA.  

Hi

Have not dealt with loans for couple of years and now a participant wants one. Loan procedure states prime rate plus 1%. Is this reasonable? I believe 2% is the unofficial safe harbor.

Thank you

Hi 

I am in United States on H1B (work visa) and I am having my health insurance with UnitedHealth Care thru my employer.

My wife is pregnant with due in May 2021. I am worried on what happens to my health insurance if I loose my job and have to change my visa from H1B (work visa) to B2 (visitor visa).

Can you please suggest if I can opt for COBRA insurance (on a visitor visa)

Note: My employer has more than 50+ employees and so COBRA is optable 

I'm a retired employee and have a 403b issue ... I have/had monies in differing employer sponsored 403b plans (same employer) and I would like to transfer from one 403b plan (Empower - the current administrator) to another existing 403b plan (Lincoln Financial - a former administrator) to take advantage of improved fixed interest account rates (3.5%) but my former employer is prohibiting the transfer. Do I have a legal right to challenge my former employer’s rights to prohibit the transfer?

Enrollment forms are often plan specific. If a spinoff plan is created should new enrollment forms be obtained from all employees because the regulations say so or is this more a policy decision that can be established by the plan fiduciary?

A calendar year 401k plan began on January 1 with an enhanced safe harbor match (100% on 4%) with a plan year calculation. Due to Covid, the match was eliminated. Notices were properly sent and the match was funded through the date it was eliminated which was May 31. 

The plan sponsor is in a better position now and wants to fund a match for the entire year as was originally promised. Obviously the safe harbor match cannot come back, but they want to fund a plan year match of 100% on the first 4% for the entire year. The document allows for a discretionary match on the plan year, but my question is this:

If a discretionary match is funded, do we have two match formulas (1) safe harbor from January 1 - May 31 and (2) discretionary match from January 1 - December 31? Is there a doubling effect of the match or can the safe harbor deposit be counted toward the discretionary match formula? We don't want to inadvertently create a doubling of the match from January 1 - May 31. Nor do we want to amend to a fixed match from June - December because participants who maxed out early will be "shorted" match. The document does not seem to address this and the document provider has referred us to outside council. 

Thank you

Two doctors are partners in a medical practice with a 401(k) plan.  The partners are the Drs' personal corporations.  A third doctor with two employees joins the practice as a partner.  The third doctor's personal corp is now the third partner in the ASG.  The two employees have several years of service with the third doctor.  The two employees are now employees of the medical practice owned by the 3 doctors.  

Is the service earned under the new doctor's personal corp automatically considered service under the medical practice 401(k) plan due to now being a related employer in the ASG?  Or does the plan need to amend to permit the prior service?

I'm hoping I explained that correctly, and thanks very much for any assistance.

Anyone have a shareable copy of SSAP No. 92?  Also, SSAP No. 102?  Also SSAP No. 11?

This is the reg my question is in regards to. The quesiton is, does anyone have a template election form that I can "borrow"?   Also, I assume this reg applies to all 403b accounts.  I noticed that the it references only 403b annuity contracts but I presume the reg just pre-tdates 403(b)(7) (allowing custodial accounts).

§1.415(j)-1   Limitation year.

(e) Limitation year for individuals on whose behalf section 403(b) annuity contracts have been purchased. The limitation year of an individual on whose behalf a section 403(b) annuity contract has been purchased by an employer is determined in the following manner.

(1) If the individual is not in control of any employer (within the meaning of §1.415(f)-1(f)(2)(ii)), the limitation year is the calendar year. However, the individual may elect to change the limitation year to another twelve-month period. To do this, the individual must attach a statement to his or her income tax return filed for the taxable year in which the change is made. Any change in the limitation year must comply with the rules set forth in paragraph (d) of this section.

A participant is catch-up eligible and 415 compensation is $16,500. The participant deferred $8,750 and received a match of $8,750.

Does the 415 test pass because $1,000 is re-characterized as catch-up? 

What sort of notice may be required to pay our TPA fees from Plan Assets. We still have not been paid for 2019 services as the client's business has been heavily affected by Covid so a thought about paying our services from Plan Assets came up. Our document allows for this and this seems like an allowable fee to charge to participant accounts but was wondering if I was missing anything about having to let participants know about this. We would likely do the same for 2020 services as well.

Plan sponsor communicates by fax but not email.  Signs 1st page of 5500 form sent by fax.    Will the DOL accept a 5500 form signed by plan sponsor on faxed page.   

We have a cash balance plan with NRA of 62+5 and a 401k plan with NRA of 65+5. For 401a4 testing what NRA do you use? Note that software seems to only allow one NRA assumption. I am inclined to use 62+5 since that would be the least advantageous for NHCEs in the k plan. But technically should you test under both NRAs? Or somehow test using different NRAs for each plan?