I HAD POSTED THIS ON THE DB MESSAGE BOARD WITH NO RESULTS, SO I THOUGHT I WOULD GIVE THIS BOARD A TRY.  NOTHING VENTURED, NOTHING GAINED I GUESS.

HI ALL.  I AM  LOOKING FOR 412(i) PLAN TPA FOR 1 PERSON PLAN.  THE PLAN WOULD BE FOR ME.  

THANK YOU,

RAY J. Jr.

I have a case where the contribution to satisfy MRC in a pension plan was deposited in error to the clients profit sharing plan. We can't seem to agree on how to correct it. EPRSC doesn't seem to cover it. The MF deadline has passed (9-13-19) and the deposit was made timely but to the wrong plan. It seems the deposit to the PSP should be transferred directly to the pension plan and recorded as the MFC, but we don't see any guidance to support this approach. Alternatively to return the contribution to the corp then pay it over to the DB but then would it be considered late.  If anyone has dealt with the problem, what is the proper correction?

Hello. In April of this year(2019), I terminated my [single-owner] S-corp and the Solo 401k I had for it(filing final 5500ez, etc.).  I rolled the Solo 401k funds into an existing IRA so I could terminate the 401k plan. I then moved from NY to FL and opened a new business, operating this time as a sole proprietorship.

I contributed to the Solo 401k in Q1 before dissolving that business, but only $31.5k($19k employee deferral, $12.5k employer contribution)-- short of my limits for solo 401k or an SEP IRA otherwise. I planned on opening an SEP IRA starting in 2020, but now I'm finding I'd like to max deductions for 2019 more than I expected(I had more taxable events than planned), and was wondering if I could open an SEP IRA for the Sole Prop for the 2019 tax year?

Vanguard says their interpretation is that I can't have two plans(401k and SEP IRA) in the same year, due to the same ownership/control of the two companies. When asked for them to point me to anything official to back up that position, they just vaguely pointed me to pub560-- but I can't find anything about multiple plans there, other than 5305-SEP requirements which shouldn't apply(as the 401k was terminated, and the 5305-SEP instructions specify 'presently maintain'; plus, that's just for using the form, not SEP IRA qualification itself).

Is there anyone here that can answer this for me, pointing to some authoritative source?

Thanks.

Hi all,

I'm new to here and new to defined benefit plan. If I asked improper questions, please feel free to let me know.

I'm a s. corp owner, and only my husband and I will be qualified for DB. My company was incorporated in 2018 and it was LLC before that. My husband and I get W2 since 2018.  The income on W2 is around $150,000, but dividends for this year will be ~$400,000. We had profit sharing 401k last year. I'm thinking

1) should we get DB  for Tax wise

2) How much can we put in DB? Just want to get an idea. I know we will need an actuary if we plan go get DB. 

Both of us at 54 years old this year.

Any advice will help and I appreciate it. Thanks.

It seems to me that I remember seeing 401k plans where there were "employer" contributions by salary reduction.  However, I can find no cite or reference for this.

The employee signs a employment contract that specified that they would not receive a percentage of their compensation. It would instead be deposited into the 401k plan and not considered an employee deferral. Essentially, the employee is making the contribution, but it is not employee deferral and it is not a contribution from employer funds.

Anyone care to comment if I am getting senile or if not, any cites or references to some substantial authority. 

DB plan established in 2017.  Employee worked for employer 2007-2015.  Employee rehired 9/1/18.  Therefore, enters plan 9/1/18.

Since employee won't have 1000 hours in 2018, is that employee treated as benefiting under the plan?  If not, then is an 11(g) amendment required to bring in employee to meet 410(b) [currently, 4 HCE-1 excluded, and two NHCE-counting the rehire)?  Here, 410(b) would be 50%/75%=67%.

I don't see any relief from Reg. §410(b)-3.  I don't think that an 11(g) amendment could be made to merely apply the 1-year holdout rule, which would make the rehire wait until one Year of Service has been met (which, then avoids the dilemma.

Am I missing something here?  

A few of our clients are getting the "you had late contributions, VFCP is available..." letters.

Do you submit via VFCP after getting those letters?  Any anecdotal evidence of investigations if is isn't filed?

Or do you just keep a copy of the self-correction in your files and show that when asked?

Ran into an interesting scenario, a sole-prop is getting 1099 income and reporting on a Schedule C.  The person is also getting a 2.25% interest in an LLC and getting income reported on a K1.  While both are subject to SE, I don't believe that they can be combined under the sole prop to set up a new retirement plan.

Am I right, or can they be combined to forma  larger level of compensation?

We have a plan that was set up as a multiple employer plan in 2018. For 2018 there was only one company in that plan. In 2019 at least two other companies joined/adopted. For the 2018 5500, should we check the single employer box or check the multiple employer box and just have the attachment specify the one company making 100% of the contributions? 

Plan Sponsor chose to forfeit participants' non-vested account balances immediately upon their termination of employment and use that money to reduce their payroll period employer match contribution payments.  The plan document states the typical requirements of forfeitures occurring on the earlier of being fully paid out their vested portion upon termination OR having incurred 5 1-year Breaks-in-Service.  The Adoption Agreement also states that the timing of allocation of forfeitures should occur in the Plan Year following the Plan Year in which the forfeitures occur.  

It appears that the employer should not have had access to the forfeited amounts until the year following the year the "true" forfeiture would have occurred.  How should this problem be corrected?  Everything I'm finding so far discusses employers NOT using forfeitures by Year-End.  This employer seemed to use them too soon.  Is this addressed in EPCRS?

Thanks in advance for your help!

In what would otherwise be a clear short-term deferral plan under 409A and 457(f), is there any exception from 409A and 457(f) with a vesting/payment trigger based on a voluntary termination (for any reason, not just good reason) at any time within one year following a change in control?

The identical form (one lump sum within 30 days) and amount (fixed dollar amount) of payment is available under several other situations (employment until stated date; death; disability; good reason termination; involuntary termination without cause).

Unless I'm missing something, the right to payment is no longer subject to a SROF upon a change in control, even if the employee remains employed. The one-year timeframe rules out a short-term deferral. 

The only thing I can think of is some type of separation pay window program, but I'm not sure it would meet the requirements where the same payment is available in several other circumstances (and, for 409A, exceeds 2x base pay/401(a)(17)). 

A self employed individual has net income of 29,725.  He also has unrelated employer W-2 income of 192,884.90 and employee deferral of $6,000 contributed to the unrelated employer's retirement plan.  Is the catch up contribution, which will be contributed to his self employed 401k, subject to the 100% of comp limit or is it in addition to?  

A money purchase Taft-Hartley plan provides that an employee is deemed to be retired, for administration purposes, as of the first day of the calendar quarter following 60 days for which contributions from a contributing employer ceased to be required on his/her behalf. At that point, if the employee is unmarried, benefits are payable in the form of a straight life annuity, unless the participant elects a lump sum, or installments payable over 3 years, 5 years or 10 years. If a participant is married, the joint and survivor annuity is payable unless the participant elects, with spousal consent, to receive his/her account in the form of a qualified optional survivor annuity, a straight life annuity, a lump sum, or installments payable over 3 years, 5 years or 10 years. Since the IRS considers a money purchase plan to be a pension plan, there are restrictions on in-service distributions prior to the participant's attainment of age 62. I can appreciate the fact that it may be difficult for a multiemployer fund to determine whether a participant has in fact terminated his/her employment. However, I am concerned that the IRS could question the plan's qualified status if the participant is deemed terminated or retired and it is determined that the participant was not in fact terminated. Does anyone have any thoughts on this?  Thank you.  

Hello All,

I find myself in a difficult position with requesting a hardship withdrawal from the 401k account I have through my employer. The reason for the withdrawal is medical, but I'm reluctant to provide documentation due to the sensitive nature of the expenses.

I am a cancer survivor, and part of my treatment involved the use of strong opiates to deal with pain. While the cancer seems to be defeated (at least for now), the opiate addiction isn't. While these are legally prescribed opiates, they are clearly having a negative impact on my personal and professional life, but I find myself unable to quit on my own.

My doctor has recommended that I check in to an in-patient rehabilitation clinic for opiate addiction. Such a facility, however, is very expensive, and is not fully covered by my medical insurance (my responsibility could be anywhere from 10k to 50k, depending on a variety of factors - my retirement funds can comfortably cover even the largest estimate, so I can "afford" it in that regard). Due to various other medical and personal expenses, I have already leveraged my loans and non-hardship withdrawal - this is my only remaining option.

For obvious reasons, I do not want to inform my employer that I am attending an in-patient rehabilitation clinic for drug addiction. My plan seems to require that I submit documentation detailing the costs, but I feel that doing so would jeopardize my continued employment or impact my career negatively in other aspects (regardless of whether or not it is legal or proper for them to do so, I find it likely that this will occur due to the nature of my industry).

What can I do to provide the requested data without revealing that it is related to drug addiction? Is it a crime to falsify this data by altering the bills to make it look as though it's for a different medical expense? What other recourse do I have? I'm desperate to get clean before it ruins my career, marriage, and life, but revealing this information may well do that anyway. I feel hopeless and trapped - is there anything I can do?

Thank you in advance for any information or advice you can provide.

Deleted.

I am reviewing a 2017 Form 5500 prepared by a large record keeper. The record keeper name is listed on Schedule C Part 1, 2(a). Under (d) their direct compensation is listed as a negative number. Does anyone know how a record keeper receives a negative direct compensation number? Does it have to do with revenue sharing and the way it is credited back? 

Thank you

Taxpayer purchased 2018 health insurance policy from ACA Marketplace costing $1,000/month but qualified for advance payment of Premium Tax Credits of $600/month which reduced his actual net premium to only $400/month.

Insurance company failed to meet Medical Loss Ratio and sent Taxpayer an MLR rebate of $1,800 (15% of total gross premiums of $12,000).

Doesn't seem right that the Taxpayer received 100% of the MLR rebate while he only paid 40% of the premiums.

Anybody have an opinion on how this will shake out from a tax/PTC perspective?

Can you offer in-service withdrawals at age 50 of Profit Sharing money?  Does it HAVE to have a seasoning component?  I seem to remember a 2-year rule.  Or is it if you have a seasoning rule, it cannot be less than 2?

My brother passed away in January of this year. He worked for PWC and had 3 different retirement accounts there, as well as a life insurance policy. One of these, which was called a “wealth builder” plan, had no designated beneficiary. He had made me the beneficiary of the other 2 retirement accounts and the life insurance policy. In 2015, he had sent my father and me an email with a PDF file entitled “Sissy’s benefits.” This was a breakdown of his 401k, an RBAP account, and the wealth builder.  In the body of the letter he simply put “This is it plus the $20k in life insurance.” We had also talked to him on the phone and he said that he had taken care of everything. After he passed away, we found out that the beneficiary designation on the wealth builder had been omitted. We did find out much later that he had made the designations on the other accounts within a day of the email he had sent us in 2015. We also found out that there was never any beneficiary named for that account. We can’t begin to speculate as to what happened. PWC said the money will have to go into the estate. My father is the Administrator  of the estate and there was no will. So basically,  once everything goes through probate, the money that’s left will go to him. My father would like for me to receive the money as he believes that my brother intended for me to have it. I have no other siblings and he was never married so there is no conflict. Right now, my dad is consulting with different people at PWC. Most have been sympathetic, but nobody has been able to really help. Does anyone have any thoughts on this? Thank you in advance for any assistance or ideas you might have to offer!

Unclear on significance of SOBN requirements for a small plan covering only the business owner where future benefit accruals can still occur. Consider a unit benefit 10% x service formula, now has 7 yrs of service, now age 70.  The AE of his prior benefit exceeds 70% comp limit, so can't accrue in current year. Forfeiture goes away in following year. Does the owner really have to give himself a notice?