We have a client (CA corporation) who's employees are only his wife and himself.  They are in real estate investment.

Wife owns 100% of a second company who's employees do work for the husband's company.

They were told by their accountant that in this way the employees wouldn't have to be covered by the plan.

Is this a controlled group or not?

I believe CA is community property state and therefore each would be attributed direct ownership of the other's company.  And would this also be considered an affiliated service group?

Second related question:  We have another set of clients where the husband is 100% owner of a construction company and the wife is 100% owner of a property management company.  The two companies are totally separate and unrelated to each other.  Do we have a controlled group>

Got an interesting question just now.  Can we have a policy that says if you are ever an HCE then you will always be part of the 403b and you will never go back to the 401k.  The purpose would be to avoid people flipping back and forth between the two plans.

I can't think of anything that would prevent it.  I guess the only issue would be coverage.  So if I have NHCE's not covered by the 401k plan, I need to pass a coverage test.  But if we're talking about a larger organization where the NHCEs dramatically outnumber the HCE's (as happens to be the case on the inquiring client) that should be a non-issue.

Anyone have (or know where I can get) a copy of the basic plan document for the CitiStreet Associates LLC Prototype Non-Standardized 401(k) and Profit Sharing Plan #01? The form adoption agreement (all I have) is dated 2002.

TYIA!

401k plan changed payroll providers at the beginning of 2019.  For the first three payrolls of 2019, they accidentally keyed the employee deferral amounts into the company match line (not sure why that was even set up, since there isn't a match in the plan!).  The plan sponsor "fixed" this by taking the deferrals from the first two paychecks out of the third paycheck... but never took the next step of fixing the "match" from the third paycheck.  So the net effect is that there is a February 2019 payroll where the normal deferrals were paid by the employer.  Since this was never fixed, the W-2s have the wrong amount, in the sense that they don't match the deposits, and also if you multiply the deferral election times the compensation, it's not right... but the W-2 does match what was deducted from compensation, so is it really wrong?

Most of the amounts in question are <$50 per person, though there are a couple that are about $100.

What kind of correction should be made?  It seems like something needs to be done.  In the plan, the participant is not short any money; in fact, it's the employer who is short about $2K overall.  There is a profit sharing contribution to be done, but it's a set percentage (one of those few plans remaining) - I could recommend that the excess for each participant offset their profit sharing, but I'm not sure that's OK since it was an employer error.  It would feel that the employee would be losing out on the amount they should have in their account.

I am an experience benefits attorney but I have not had much ESOP experience, and I need to develop this skill. I would welcome any opinions about the resources and webinars available through NCEO or any other organizations. Thanks!

Former client (and someone I'm still friends with)  asked me to look over the mess of the new administrators (rhymes with Daysex).  Plan is a 3% Safe Harbor Non-discretionary.  For whatever reason the 3% has only been allocated to those employees that are deferring.  Last time I checked in on the friend, that battle was still being waged.  It wasn't resolved by the end of 2019 to any extent.  The client is a sole-proprietor with 10-15 long time employees.  So, maybe 12 are still due their SHNDC and the tax return of the Sole-P has yet to be processed. 

So, how does Daysex generate a 5500 for signature when so much is still incomplete?  Does anyone prepare a 5500 before the sole-p's income is known or final contributions receivable are calculated?  It's certain to be in the $60k-$75K range.  I guess, if I'm Daysex, I can say I only report what's on the books on December 31.  Never, ever have I seen this.

Good evening.

Do any of you fellow practitioners have suggestions on where to find the best 457 training for new staff?  I've looked on ASPPA and NIPA and am not finding training designated towards just non-qualified 457 plans.  I would appreciate any suggestions. Thank you.

Business 1 - 401k plan is currently in place - 1 Owner. 

Business 2 - Business Opens another location 6 month later - that owner is the Parent to Owner 1 above.

Can Business 2 just adopt Business 1 plan as an Adopting Employer, since they will create a Controlled Group?   Would there be Plan Amendment needed only for that?

So client asked me to calculate their SHNEC and PS for 2019 earlier this year.  In March they confirmed that they wanted to do both but in April they changed their mind and said they only wanted to fund the required SHNEC.  Apparently they have filed their corporate tax return for 2019.

Today they came back to me and are asking if they amend their corporate tax return for 2019, can they fund the 2019 PS that we had calculated for them and they later decided not to do?

I am having internet problems, so I can't search the EOB.  I will be looking thru the paper copy of the 2018 version while I wait for the IT people to come, but thought I would post the question here too.

TIA

In my divorce decree, my wife was awarded 50 percent of my 401k from the time that we were married which was 12 years. Fidelity qdro gave her 50 percent of my entire 401k for 21 years. How do I recoup my funds for the 9 years before we were married?

In my divorce decree, my wife was awarded 50 percent of my 401k from the time that we were married which was 12 years. Fidelity qdro gave her 50 percent of my entire 401k for 21 years. How do I recoup my funds for the 9 years before we were married?  

Is anyone being asked if a plan can fund a contribution to their terminated participants now since there are so many people being terminated/severed, etc.? It may be a BRF issue that some are benefiting from receiving a contribution now, versus later, but if it impacts only NHCEs... Is it even a possibility to fund some but not all participants?

Employer pays the President's family coverage under group health insurance plan per an employment agreement.  For other employees, employer only pays for employee-only coverage (employees pay for any more on their own.  This clearly is discriminatory under IRC 105(h).  But does it violate the IRC 125 cafeteria plan rule against discrimination as to contributions and benefits?

Can you help with the following scenario:

P sponsors a QRP.  R and P are related employers, and R's employees participate in P's plan.

C and R are brother-sister companies.  

Just by the nature of C and R being brother-sister, does that by default pull C into the ASG with R and P?  Or would C be part of the ASG only if it satisfies the ASG rules on its own?

Thanks.

Opinions please on this unusual fact pattern.  Participant leaves employment with a vested benefit in a defined benefit pension plan in 2017.  Plan provisions permit him to elect an immediate lump sum distribution upon completing the appropriate forms and submitting certain documentation.  One item included in the application package is a Spousal Consent that must be completed by his spouse.  Note: he covered his spouse under various health and welfare benefit plans during his period of employment.

When he received his pension application, he indicated that his marital status is 'single-never married'.  We pointed out that he presented himself as being married during his employment.  He stated that he lied about his marital status and that he was not never married.  We prepared affidavits for him and the person who is not his spouse (PNHS) to complete.  He completed and submitted his own affidavit stating that he was never married to PNHS.  He indicated that he did not have a current address for PNHS.  We performed a search and sent the affidavit to PNHS via regular and certified mail. PNHS never submitted the affidavit, and did not sign for the certified mailing.  The affidavit sent by regular U.S. mail was not returned as being undeliverable.

Participant, of course, is super anxious to receive his distribution. We suggested that he submit an official copy/transcript of his federal tax return from the IRS for the final year of his employ with the company.  Our thought was that it would agree with his true marital status and along with his completed affidavit would permit us to distribute his pension.  Initially he stated he would request and send the tax return, then he stated that he did not file a return for that year/any year.  Recently, he is claiming that we have no authority to request copies of his tax return. 

Any suggestions?

Does the owner of a sole prop need to have current year income to have the Excess Asset from QRP Suspense Account Allocated to him over seven year?

There is some mention of the 415 applicability to limit the amount allocated (see attached).   But I didn't find anything that tells me if an owner of a sole prop needs to have current year income to receive allocation as the case would be if it was not from QRP.

irs_plr_2008-36034.pdf

Wondering,

anyone seeing (or acting on) situations where the 1/1/2020 funded ratio is "high" (90% or above) and the plan sponsor is instructing the actuary not to issue the 2020 AFTAP certification, thus letting the default percentages apply?  Could be useful when (1) the plan allows lump sums greater than $5,000 and (2) the sponsor is trying to save cash in the plan very soon after the assets have taken a dive. 

Any other thoughts on the process? the communication? etc?

Please consider the following facts:

Unclear as to whether the Suspended Loan Repayment Provision would apply to a new loan taken out currently.