I have employees that submitted Educational Assistance forms prior to the cut off date in December for 2019. However due to a clerical issue it is only being processed in 2020. Can I count this towards the 2019 IRS limit and would it have to be included in 2020?

10 Docs own MD Practice, Inc.  Those same 10 Docs own "Surgery Center Holdings, Inc." which in turn owners 60% of "The Surgery Center, Inc.".  The other 40% is owned by an unrelated hospital. Each Doc owns 10% of MD Practice and Surgery Center Holdings.

Here is my question.  MD Practice Inc. would be the A-Org and The Surgery Center, Inc. would be the FSO.  Does the A-Org Satisfy the requirement that it have an ownership interest?  I presumed the answer would be yes and set out to find the justification but came up empty handed.

In order for a corporation itself to be treated as owning somenthing that is owned by a shareholder, that shareholder has to own at least 50% of the corporation.  So it seems to me MD Practice, Inc. is not treated as owning any part of Surgery Center Holdings, Inc. and tehrefore does not meet the requisite ownership interest.

Make no mistake, my question is "What am I missing?"  This has to be an ASG.

I believe this was discussed in another thread quite a while ago, but...

Plan participation as the January 1st or July 1st following completion of age 21 and 12 months of service.  Participant hired 1/2/2018.  Eligibility computation period is 1/2/18-1/1/19.

Would not the individual enter 1/1/19, rather than 7/1/19?????

A question is raised regarding the impact of an increase in the 415 limits for a frozen plan. Situation is as follows: Sole Prop pension plan, 10% per year of service formula. At 12/31/18, participant has 6 years of participation and 18 years of service. Comp is $160,000 and accrued benefit is $11,000 per month ( eg 60% x $220,000 dollar limit). The plan is frozen 3-15-2019 before accruing  1,000 hours. The 2019 415 limit is increased from $220,000 to $225,000. The question is what is the benefit used for the FT for 2019?

The regs under 430 state that the FT is based on the benefit that has been accrued, earned or otherwise allocated to yrs of service prior to the first day of the plan year. The regs further say that the TNC is based on the benefit that has been accrued, earned or allocated to service from  the 1st day of the plan through the val date, which in this case would be the freeze date.

The regs are silent with regard to the impact of 415 changes in the dollar limitation.  My interpretation is the benefit for the FT is $11,250, e.g. increase in the dollar limit goes to the FT.   Any opinions?

Eligibility for rehired employee. Plan Eligibility states '90 days of service' (no hour requirement is stated), plan uses actual hours, not elapsed time. Entry date 1st of month following.

DoH: 1/28/19

DoT: 4/15/19

Rehired: 11/11/19

I think DoP is rehire date, or 12/1, after they worked the actual 90 days of service was completed.

I believe the intent of the employer was 90 days of actual service but I don't see where a day is defined to credit service. I have read other posts regarding situations like this but most say the document uses elapsed time, in this case the doc states actual hours. Would the spanning service apply in this case? So, other than amend the doc to match what the employer intended, some general opinions?

Thanks for the assistance.

If a plan run by a partnership uses forfeitures to fund a QNEC or really any other employer contribution I would assume that forfeiture amount should not reduce partner compensation up to that amount??  The contribution reduced partner comp in prior years.

Is there any safe harbor contribution which can be made that excludes ACP testing for a Plan which is allowing voluntary after-tax employee contributions?

We have an Employer who is making a 3% Safe Harbor non-elective contribution (applied only for ADP purposes) with an HCE making such a voluntary after-tax contribution and it is causing an issue with the potential ACP test.

Thanks ahead of time for any guidance you can provide.

Hi to All. I'm new here.  

I'm have not reviewed the forum thread to see if this has been address and i hope you don't mind me poising my question / concern.

Facts:

1) My Employer has a sponsored retirement plan - 401K / Roth

2) Any changes to my elections can be made on the Plan Sponsor or thru my employee

3) I been contributing the maximum required wherein my employer with match my contribution (6%/3% employer)

4) The website where I can see all the investment and also where I can make changes provides the opportunity to enroll on another plan. This plan is the Roth Plan

5) I added another plan and elected a 3%

6) I kept my initial plan and did not make any changes.

7) Payroll comes and my employer changed my 401K elected percentage of 6% and changed it to Roth 3%

? I didnt make any changes to my 401K plan nor did I deactivated/suspended my election to contribute.

9) I contacted the Plan administrator and inquired.  She then informs me that my employer only allows one type of plan

10) Informed her that I was not aware of such and that I request documents in Black and White to show such which she is saying

11) I requested also about the employer matching fund and how is that going to be rectified as I did not elect that my initial contribution be stop.

12) Told her that in addition to my current contribution, I elected to contribute to a Roth IRA 401k at 3%

13) Question any issues that you may see regarding this?  What can be done.

14) I reviewed the Annual notice and it provides the following: "You may make either Regular 401(k) deferrals (pre-tax) or Roth 401(k) deferrals (after-tax)."

This does not say that only one plan can be done.  

15) I reviewed the Summary Plan and it is a general disclosure.  

16) Payroll is coming next week and the cut off to make any changes so that it be reflected in the next payroll is today, Friday.  

When I left my employer many years ago, I took a lump sum for my pension. Now I'm rehired by the same employer, and my service pension may be restored if I make a one time repayment to the pension plan. My question is what the tax implication is for this event. I was told I could not rollover a 401k distribution as the repayment. Therefore, the repayment will come from after-tax money. If I take a lump sum pension distribution again upon retirement, the lump sum distribution will be taxed again. Will my repayment be double taxed, or is the repayment amount deductible from the future lump sum pension distribution? 

For example, if I make a repayment of $50k (which has already been taxed) today to restore the pension, and I retire next year to take a lump sum distribution of $60k. Will the total amount of $60k be subject to tax next year (in which case $50k will be double taxed), or just $10k (= $60k - $50k ) will be taxable? Or is $50k tax deductible in this year's tax return?

A 401(k) PSP plan for a PC has 2 owners, both over age 50, one makes $280,000 the other $220,000. There is 1 staff making $30,000 per year. Each owner defers $25,000 ( 401k + post 50) and the PC makes a contribution of 18% to all participants. Both owners want to get to $62,000 limit. The plan document (FIS  VS) says that an allocation to a participant that would make his total allocation exceed 415 is allocated to other participantslimited to the 415 limit and the excess is allocated to other participants in proportion to salary. 

So for Owner with $280,000 would get $62,000, the PSP portion of $50,400 is limited to $37,000 and the remaining $13,400 he can't get .that gets allocated to the other participants.  that's where I am stuck.The other owner would get his $25,000 plus no more than $37,000 pep and the balance get allocated to the employee.  This seems ok to me but am I missing something here?

Hi.  Does section 112 of the SECURE Act (401(k) plans must allow long-term employees working more than 500 hours but less than 1000 hours per year to participate) apply to grandfathered 401(k) plans?  I don't think so, but would greatly appreciate additional perspectives.

New section 401(k)(15)(A) says the 3 years with 500+ section (i.e., 401(k)(2)(D)(ii)) “shall not apply to an employee unless the employee has met the requirement of section 410(a)(1)(A)(i)” [i.e., age 21].  But governments are exempt from all of 410 by 410(c)(1)(A), and the result is that no governmental 401(k) employee ever meets the requirements 410(a)(1)(A)(i), strictly speaking.  If 401(k)(15)(A) were intended to apply to governmental plans, then it could have specified the age 21 requirement directly rather than through cross-reference.

Governments don’t have a history of excluding part-timers unfairly and plan eligibility is typically very liberal.   As public policy, there doesn’t seem to be a strong argument that SECURE now wants to apply a part of 410 to governmental plans contrary to 410’s blanket exemption and create a new minimum participation requirement for them.  And many government EEs are covered by collective bargaining agreements, so those EEs are clearly exempt.  It doesn’t seem apparent that Congress intends to complicate state and local government plan administration by applying this new part-time eligibility section to nonunion EEs, who are exempt from 410, 401(a)(4), and 401(a)(5).

Thanks!

A situation has arisen where a plan has determined that a participant had been overpaid in her pension benefit payments. The plan intends to recoup the overpayment by asking the participant to agree to have amounts deducted from prospective pension payments over several months. Is there a specified percentage limit of pension benefit payment that must be applied in determining the maximum amount that may be deducted from the participant's prospective pension payments? If so, what is it and what is the statutory or regulatory citation where such limitation can be found?                                                                                                                    

I can't find anything that explicitly states you can do this but I presume the 50% QPSA is the floor and raising it to a 100% QPSA is not an issue via an amendment to the DB plan. Thanks for any info you can provide. 

We have a plan that has different eligibility for deferral and Profit Sharing Sources. The compensation for both is defined from date of entry. Let's say a participant becomes eligible for deferrals on 1/1/2019 and for the profit sharing source on 7/1/2019.

Let's say the compensation from 1/1/2019 to the end of the year is $100,000 and from 7/1/2019 to the end of the year is $50,000. The company allocates 5% to this participant for a Profit Sharing Contribution, so the participant receives $50,000 * .05 = $2,500. However, when performing the General Test, is it the $100,000 compensation that's used or the $50,000?

The DATAIR documents have a separate definition of compensation for "Plan Compensation (including for Elective Deferral purposes)" and "Compensation for Non-Elective Contributions" and I'm wondering if Plan Compensation means that it's the compensation used for all testing (including General Test).

Thanks.

I have a client - a one-physician office, wife manages the office - with SH 401(k).  Plan provides the SH NEC 3%, but has last-day rule for PS allocation.

8 NHCEs, 2 of whom terminated during the year, so they get the 3% in addition to their deferrals, but no PS.  I pass coverage at 75% but I can't get through the gateway because all the terminated are getting is 3% instead of the 5% needed for the gateway. 

I need to allocate 2% to them to get through the gateway using FtWilliam basic plan document.  Can I use  an 11(g) plan amendment to allocate that 2% for 2019?

Thanks!

We have a client who currently has a 401(k) that does a discretionary match.  They have matched for January and part of February  of 2020 already.  They failed ADP for 2019 so want to do a Safe harbor going forward.  Under the SECURE Act,, can they amend now to do the 3% Non-elective for the remainder of the year (as of the date of adoption of the SH plan? )

If so, do they perform ADP test for the months they had the normal match or do they pass for 2020?  

hello!

I have a plan that amended the vesting schedule effective 1/1/2018 from an immediate vesting to a 2/20 vesting schedule.

I have an employee that was hired 9/2017.  She was eligible 1/1/2019 (1 year 1000 hour eligibility with 1/1 & 7/1 entry)

Does she fall under the old vesting schedule because of her hire date or does she fall under the new because of her participation date?

I appreciate your help.  Thank you!

I'm going to preface this by saying I know almost nothing about Puerto Rico rules. 

So if someone has a primer resource that they think has the answer - please let me know. 

Question  existing U.S. mainland plan, owner only. I am unsure of entity type, I suspect it is an LLC. I do not know which state. I will try to find out the details. 

The owner / business is moving to Puerto Rico and wants to keep their existing plan. Are there changes? Is this something that is going to be so complicated I should refer them to a different company? What things should they (I?) be aware of? I've tried some basic googling, but all of you are very quick and smart so I figured I would ask here. 

H & W were divorced on July 16, 2019. W was awarded 1/2 of Hs cash balance pension and 401(k) plans. I was retained by the attorneys to draft the DROs. I did so and submitted them to the plan administrator for preapproval on October 9, 2019. Minor changes were requested, made and resubmitted. Preapproval letters were issued on November 25 and December 9. The court approved the QDROs and they were submitted to the PA for processing. The PA now wants another minor change in both QDROs. Normally, wouldn't be a problem, except for resubmitting them to the court, which PA requires. 

I just learned that the AP died on November 25, so her signature is not available for the revised QDROs. My thought is to made the requested change but keep the QDROs otherwise as drafted. The only form modification would be to have the personal representative of the AP's estate sign in the place of the AP. Does this sound like a reasonable solution?

An organization wants to give retirees a monthly allowance to help them pay for medicare premiums. This is a not-for-profit organization that wants to provide a specific dollar amount to former employees that meet the 'retiree' criteria. They currently make a monthly deposit into each retiree's bank account. Is this the proper way to do so? Thank you.