Taking on a new client (solo - EZ). They never filed 5500EZ for 2016-2019 so we are working to clean up. While working on these 5500's I discovered they deposited $500 to much in 2016 ($500 past 415 limit), and $35K excess for 2017. There were no contributions made in 2018 or 2019.  What would you recommend as the best way to fix the excess contribution? I am thinking that he needs to remove this money from the plan along with earnings. Thoughts?

I work within a payroll company where the main objective is sell as many plans as possible to meet sales goals. Right now we have over 300 plans and more coming in every day.. Including myself there is only 1 other person that knows how to administer the plans. I have only other employee that unfortunately doesn't understand the concepts so his role is minimal. Also, being a payroll company our area uploads the contributions for our payroll clients which is more than a full-time job by itself.

How big is a typical caseload for 1 administrator? I am seriously considering resigning after 7 years because I do not feel I can give the quality service that needs to be given to clients. I'm tired of working many long hours and cringe that our busiest season is right around the corner. The stress is beginning to affect my physical and mental well-being but I find myself wondering if I should just suck it up and continue in this situation. I've never resigned from a company before.

The only perk is that I can work from home.

Client is wanting to change their vesting schedule from 100% immediate to 4 year graded (25/80/75/100).  My understanding is that Vesting is a protected benefit which cannot be reduced or eliminated. The more restrictive schedule must be applied to all future contributions received on or after the effective date of the change.....unless you make all current participants 100% immediately vested in all future contributions as well and apply the more restrictive schedule to new participants. Are there recent or newer regulations addressing this that may have a different application than the one I've described? Is this how more restrictive vesting should be applied?

This is for a medical group partnership with no employees and all HCE's, common in emergency medicine. Each member is a separate entity but the group is an affiliated service group.  Are individual cash balance plans allowed?  I believe some members may have them already.

Although contributing to both a 401(k) and a SIMPLE IRA in the same year is not allowed, can an employer keep the SIMPLE account open if the only contributions made going forward are to the 401(k), or must they close the SIMPLE account before the 401(k) plan is started?

We have a situation where a participant in a plan has died.  His brother has provided a POA naming him.  He doesn't have any letters of testamentary because he's saying he doesn't need one - he's the POA.  Our process is to require a letter of testamentary to show who was appointed the executor.  Are we ok distributing to the estate without a letter of testamentary - just distribute to the estate - paid to the estate, etc.  I think we still need one - we need something to show that this person has the authority to sign on behalf of the estate.  Any help would be appreciated.

Thank you,

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?