Just took over a hard frozen one man plan, defined benefit plan, who received the 204(h) and amendment.  Does the plan automatically pass minimum coverage?? There will not be any new employees ever entering.

Have a Safe Harbor 401k plan that allocates a Safe Harbor enhanced match formula (100% up to 4% deferred).  They also allocate a non-elective profit sharing contribution based on integration/permitted disparity and the plan falls into the Top Heavy threshold.  The plan has a 1000 hours of service and last day requirement for receiving an allocation of the additional profit sharing contribution.  EX-Have a participant who is NOT eligible for the allocation of the profit sharing due to the service, but is receiving the Safe Harbor Match because they deferred.  Would this participant also have to receive a Top Heavy minimum allocation or would their Safe Harbor Match satisfy that requirement?

I am working with a church that is in the midst of an EPCRS correction. One of the areas they are working to correct is failure to offer participation in the plan to all eligible employees. Per the written plan document, part-time employees must be offered participation. They are looking at needing to provide a 1.5% corrective contribution on behalf of these PT employees. The question the church has proposed is, "what if an employee refuses the corrective contribution?".

Because they were never offered an opportunity, these part time employees are not enrolled. If refusal is not an option, and an employee is unwilling to complete an enrollment form, can the church just provide the plan with the basic enrollment information (name, ssn, dob, etc.) so the plan could open an account for the individual to accept the contribution on the employee's behalf?

If refusal is an option, could the church simply receive a signed statement from the employee in order to justify not making a "full correction"?

TIA for your responses.

An employer's personnel manual (dated 1998) states all employees are eligible to participate in the 403(b) plan.

The same employer's plan document (2009) provides a default eligibility for employees working at least 20 hours per week.

For employees working for the employer 2009 and beyond, which document governs participation eligibility?

TIA for your responses.

We have a SHNE 401(k) with voluntary contributions, all testing done.

Affected participants of course owners, removed the excess and claimed the earnings as taxable.

In calculating the excess, SHNE for these HCEs was not contributed.  Plan doc allows SHNE for owners, but I believe the thinking was, since the SH contribution has not been made yet, why treat as excess.

Is it permissible for the owners to "waive" the SHNE for 2018, or do they have to contribute, then remove it from the plan?

See new Revenue Ruling 2019-19 - attached.  

And see comment from Blankrome also attached.  

rr-19-19.pdf RR 2019-19 Uncashed Distributions.pdf

I believe this has been addressed before - if so, please feel free to link to the other discussions / posts and I'll read through them. 

Small employer has a a fairly vanilla 401(k) plan with deferrals, safe harbor, and profit sharing. They would like to reduce the contribution to the NHCE by adding an excluded class. The one HCE would also be excluded from everything except deferrals. A number of the eligible NHCE would be excluded from the plan. Assuming coverage testing passes, this feels like a cut-back, or a violation of BRF, but I know the ability to defer is not protected, nor is right to receive an employer contribution. 

Usually if initially setting up a plan we are proactive in class exclusions as part of the design process, so I don't see requests for exclusions after the fact and just feel like I am missing something. 

What say all of you smart people? Is there something I'm missing that would prohibit or make this type of amendment problematic?

I guess the process / assumption is as follows

distribution issued, 20% withholding.

so a 1099 exists. so the IRS 'expects' to see the distribution on the tax form, whether or not the person cashes the check or not.

interesting

distribution check not cashed.pdf

Business owner wants to use part of his profit sharing segregated account to make a mortgage loan to an unrelated individual. Proper documentation and an attachment or lien will be filed. Any problem with this type of loan?

Prior plan is an non-ERISA 403b effective from 2009 and terminated prior to 2015. They only had employee contributions, never any employer contributions.

The new ERISA 403b is effective 1/1/2015. The plan excludes vesting service prior to plan's effective date.

Can the new plan exclude vesting prior to 1/1/2015 even though they had another plan during that time?

Anyone who has worked with Applicable Large Employers who have failed to properly file their Forms 1095-C, etc. with the IRS has seen letters from the IRS signed by Shan Montoya, Operation Manager. 

My question is simple:  Does anyone know whether this person prefers to be addressed as "Mr. Montoya", "Ms. Montoya", or something else?  Thanks!

A 9/30 , fiscal year end plan switched to a calender year end after 9/30/14.  To make this change, a short plan year was created from 10/1/14  until 12/31/14. The plan benefit formula  is 2% for each year of service. Question: For the three month plan year is each employee credited with 2% for this additional "year of service"?. Thank you very much.

Anyone with recent experience on the turnaround time for plan termination Determination Letter requests?   I know it will vary, but am hoping to get an idea of others' experience in last few years.

Thanks!

I know you are not able to maintain a 401k and SEP IRA at the same time using SEP Form 5305.  However, if you terminated the 401k on 6/1/2019 (short-plan year) - could the employer then open and fund a SEP-IRA for 2019?   

Some additional facts particular to this question: there was only 1 employee  (in addition to the owner).  The employee left first half of the year and the owner did not want to continue the admin and expense of the safe-harbor 401k therefore provided notice, distributed assets and terminated the 401k 6/1.    It is now just the owner as the only employee. 

If the answer to the first question above is yes.   How would the SEP contribution limits be calculated for the owner being that he made deferrals to the 401k for the first half of the year and received SH matching contributions?    

Thank you in advance! 

Hello,

Our traditional DB pension starts at age 65.  Our vendor has created an option within the systems software to enter a date and allow a late calculation.  When is that permissible?  Does one age out of a late calculation perhaps at RBD date?   I'm going to raise this to the vendor and/or counsel, but I can't find anything about it in the pension answer book I'm using.  

My understanding is back payments to the original retirement eligibility date should be made, and that has been done historically on this plan for years.

Thank you

I have a self-employed client with a Defined Benefit Plan that has been contributing the minimum required amount for the past several years. In the past 3 years, those contributions have not been deducted, since there were no self-employment earnings in those years, (business actual experienced losses). It is expected that 2019 will also be a loss and that the business will no longer exist since the client has retired. I am aware that the contributions avoid the penalty tax under IRC § 4972 due to the special rule under IRC § 4972(c)(4). However, I cannot find anything that addresses how these non-deducted contributions are treated when they are distributed. Distributions, (MRDs) have been made as required by IRC § 401(a)(9) and they were fully taxed on the presumption that the contributions would eventually be deducted .Since there is no expectation of future self-employment earnings it would seem that there is a tax basis recovery of cost (investment in the contract) that should be considered on future distributions. The plan will likely terminate, to eliminate future non-deducted contributions.  Upon termination and after payment of the MRDs the plan would distribute lump sums, which would be directly transferred to IRAs. If the accumulated non-deducted contributions were treated like employee after-tax voluntary contributions then they would be excluded from the rollover and refunded to the participant, which would be the best possible outcome. Assuming  that these are nondeductible contributions for all purposes except IRC § 4972, then it seems that they are not eligible for rollover treatment. One fact that I have left out is that the client’s wife is the only other plan participant receiving a minimum benefit that was fully funded before the plan was improved to generate contributions for the self-employed participant. Has anyone had a similar situation; and how was the tax reporting done on the final lump sum distribution?

A participant took a loan from the plan and the payment was supposed to be withheld from their payroll.  The payment was not.  Besides getting the deduction going so that the loan is paid back, what is the remedy for the lost time... missing payments?  

Mom is 94 (reasonable health) but still needs my time more than what this job would ever permit.

Plus now I will be get to Mass daily, without worrying about the time constraints and work load this job requires, a big plus for me. And time to bake more cookies and stuff to giveaway. My favorite being the springerle.

Have yet to find anyone to turn down one of those.

My deepest appreciation for those to have helped me learn along the way, my apologies to those I may have inadvertently offended by any comments I may have made. In the cartoon Futurama, the character Fry made the comment "You remember Star Trek, 79 episodes, maybe 30 good ones". I figure that might be about how many really good and worthwhile comments I posted.

Dave Baker is going to be glad because he won't have to listed to complaints about the bad jokes, humorless songs and awful puns I occasionally posted.

My favorite takeaways after all these years:

I know a few have said I'm a bit crazy for giving away stuff for free, but has been a big highlight for me. Hopefully the few Relius reports I have posted have proved useful and a time saver to some, along with the excel file for projecting the new limits. Someone else can worry about updating that every year. Ha. Over the years it has been kind of neat to see postings on the internet about projected limits. And I had the nicest comment years ago from FT William about the SSA report to pull the data from Relius into their system.

The best advice I can provide, something I have always tried to keep in mind with my dealing with others:

God has a benefit plan that is out of this world, so store up for yourselves treasures in heaven, not the things here on earth.

A pension plan covers Bill and Jill. Bill owns the business, Jill is a secretary.  The plan was set up in 2010 using a unit benefit accrual of 10% x High3 x Service ( including all past service). The plan is amended  as follows in 2017: the new formula is 20% x High3 x Service ( including all past service). We can't explain why this change was made ( takeover case this year), but question whether  the 133% rule was violated.

 In fact the amendment has no practical affect since the benefits are already at the 415 lints based on original formula! But my question is whether a retroactive change in the accrual rate for all current employees for all years could affect the safe harbor.  I don't see any violation since the change applies to all years of service. Checking the available vals there are no terminated employees since plan started.

Any thoughts anyone?

How long after I repay my 401k loan in full do I have to wait to apply for a new loan