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?

Hi all

Sponsor wants to terminate the services of the vendor (or provider/platform) and wants to move another one.

By mistake, tells them to terminate the plan i/o telling them that their services are terminated and assets to be transferred to another vendor (not well informed nor was contacted by anyone - you get you pay for).

Vendor terminated the plan in April 2019 but assets still not distributed - I believe the sponsor signed a resolution for the plan termination rather than contract termination. Can the sponsor still undo the termination with no issues as to the continuance of the plan? It is a 1 year old plan. any other corrective measures that will be required? No idea about what happened to the deferrals, just finding out the facts.

Vendor also tells the client, even if they move the assets to another vendor/platform, they will get a 1099R?? How is this possible there is no distribution?

Your comments are appreciated as well as any insights.

Thank you

Four entities are in same controlled group/affiliated services group.

• 3 of the entities participate in one fully insured wrap welfare benefit plan (medical,dental, premium only plan). All insurance contracts for that plan are signed by the plan sponsor (i.e., one of the 3 entities). Since this plan had 140 participants at start of plan year, my understanding is that we will need to file Form 5500 for it.
   
• The remaining entity has its own separate fully insured wrap welfare benefit plan (medical, dental, premium only plan ). This entity is the plan sponsor and all insurance contracts are signed by it. There are only 22 participants at start of plan year. Does a 5500 have to be filed for this plan too, or is a 5500 not required for this plan until the plan reaches 100 participant threshold at start of another plan year?

Related question: For annual discrimination testing, do you have to aggregate all the participants from both plans together or can you test separately? Thank you for any input .

Plan is a Safe Harbor Non-Elective plan.  Plan has compensation exclusions (ie non safe harbor exclusions-OT, commissions, bonus etc).  The plan does not pass 414s.  Can the plan satisfy the 414s requirement by using General testing?  Or must the amend their definition of compensation to satisfy 414s?

Under the Code and ERISA, spousal consent is not required if the spouse cannot be located. For a participant who is looking to utilize this exception, is the plan required to have the participant submit an affidavit of when s/he last saw their spouse and state in detail what efforts have been made in an attempt to locate the spouse? Or is it simply enough if a participant checks a box on the benefit election form under spousal consent which says. "I do not know where my spouse is currently located."?

I am reviewing a Form 5500 for a Defined Benefit Pension Plan that had a change in actuaries (not the actuarial firm). The actuary was provided notice with the explanation "Reassignment of responsibilities within NAME OF FIRM.

Schedule C is required, if I read the instructions correctly. Question is for the EIN on Schedule C, do you put in the Firm EIN or the actuary enrollment number?

Normal Retirement is currently 65.

Participant did not make the special 3 year catch up election in time.

Can the employer amend the plan and increase NRA to 70.5?If so,  would the increased NRA apply to all participants ( including existing participants)?

This will allow the employee to make the special catch up.