Here's my situation:

• Company 1 - Husband & Wife owns 100%
• Company 2 - Husband owns 50%, Another Individual owns 50%

So we don't have a controlled group.  The Husband maxed out his 401(k) in Company 2 and they pass all testing, but can he get Profit Sharing from both plans and what would the maximum be for each?   

Thanks in advance!  

I recently wrote this memo regarding reporting a fidelity bond increase that took place in 2019 as of 12/31/2018.  I'm less concerned with whether it is what you would do, and more concerned with whether or not it fits within the gray zone of opinion.  Before I started writing the memo I was unsure, but as I completed it, I became convinced that not only was it ok, it was likely a preferred approach as a matter of providing valuable information to the reader.  Anyway let me know what you think,

The 5500 asks "during the plan year" did the Plan have a fidelity bond. We answered yes to that question because during the plan year there is a bond. The instructions are not specific regarding what bond amount must be reported (i.e. as of which date). For example, they could have said "enter the bond amount as of the beginning of the year” or “… as of the end of the year", etc. but they make no reference.  In fact they provide no guidance on how to report a bond that uses the ERISA Inflation protection (if anything required explanation as to applicable dates it would be this).  Based on this lack of guidance we are in a position where reasonable alternatives must be considered.  One other reasonable approach would be to allow the Employer to report the bond in effect as of the date of the filing of the 5500.  If a reader of a 5500 has more recent information regarding the value of the fidelity bond he or she will better be able to determine the level of protection the Plan has acquired.

How do you correct the following error?

401k Plan permits special elections for "irregular pay" and absent making an affirmative election, nothing should be withheld. 

Dec 2017 a small amount of deferrals were withheld from "Christmas" bonuses for some but not all employees. These deferrals however were never remitted over to the Plan as the employer never realized they were in fact withheld. This was just found with year end reconciliations and 5500 prep (off calendar fiscal/plan year).

How best is this corrected? If remitted over to the plan they violate plan operation because they were not elected, should not have been withheld from payroll. Since withheld on a pretax basis, no income taxes were withheld on these amounts nor were the amounts reported as taxable income however social security taxes were withheld and amounts reported. Given all of this, is it best to remit them over to the plan along with corrective earnings and then do an amendment for those specifically affected for the specific paydate? Adjust via payroll somehow?

Thank you!

Group Insurance broker was bought by another firm mid-year. So two different brokerages received commissions, even though the Employer did not formally change brokers.

On insurance carriers' Schedule A provided information letters, they either indicate one or the other for the whole year (ie if their system is not updated, they list the prior firm name, if updated the new name) with the grand total for the whole year.

To what extent is it necessary to break out what amounts were paid to which firm, even though it's the same broker group?

I'm in the process of enrolling in a 401k with trowprice. I'm a bit confused in this enrollment stage (screenshot below). There's the Roth 401k and the Pretax selection. My assumption is that the Pretax is the traditional 401k account? If so, why do they give you the choice of opening both traditional and Roth 401K accounts? 

I administer an ESOP plan that only holds Employer Shares.  When a participant terminates the participant sells his shares to the plan in exchange for cash.  The "cash" paid is a cash contribution to the plan and in turn paid out to the terminated participant.  The shares "sold" to the plan are allocated to the remaining participants eligible to receive a contribution to the plan for the year.

However, because of diversification the value of the shares sold this year exceeds the 415 limit for contribution allocation. 

What can be done? Does the value of the shares in excess of the 415 limit belong to the Employer Sponsor outside the plan?

State of Oregon, parties are now dealing with the reality that they did not withdraw enough from 401K plan to pay off all bills and also pay IRS.  Husband now wants to renegotiate the pension settlement and wife just wants the bills paid off. Can they renegotiate the 401k settlement and file an amended or new QDRO? Is it allowed to go back ? They had done a 50/50 split before but failed to account for the tax consequences of not rolling over into another retirement plan. Plus the bills turned out to be more that they thought after paying lawyers :(

Employer was 20 days late with employee deferrals, matching, and non-elective QACA contributions. Prior to this error they have always submitted the three money types together to participant accounts every pay period.

For the missed contributions do they need to use the VFCP lost earnings calculator for all three money types or just for the employee deferrals?   

Anyone see any concerns with this structure:

New hires eligible to participate voluntarily after 90 days of employment.  Auto-enrollment kicks in after 12 months of employment for those who as of that date have not voluntarily enrolled.  

We have a combo cash balance/401k safe harbor nonelective profit sharing plan.   The DC plan has the failsafe language.  Eligibility both plans,  age 21/1, 000 hrs.   One HCE,  5 NHCE.   One younger NHCE terminated in 2017 so the contributions needed to pass substantially increase contribution as well as benefits.  All that is needed pass 401(a4)  is one more younger NHCE.   Does it matter which one,  assuming there are two? BTW,  (a) (26)  as well as (b) (10) are both passed. 

New p/s plan adopted in November 2018 and the 401k was going to start 1/1/2019. They decided not to make a profit share contribution for 2018.  So no assets for 2018 at all. 

Do I still file a 5500 with 0.00 for 2018 ?

I'm preparing GUST, EGTRRA and PPA restatements for an employer who is under IRS audit.  The employer has been applying a 1300 hours requirement for a participant to receive the annual profit sharing contribution.  Obviously, that is not an option in the non-standardized document I am using.  The employer has asked me for a citation as to when 1,000 became the maximum number of hours permitted. 

Is it an IRS rule? Part of ERISA? I haven't been able to find something in writing to give to the employer.  I don't think it will be sufficient to say the document doesn't permit it.  

Thank you.

Two dentists (husband and wife) have separate corporations.     Their corporations are both participating in  the same 401k plan, which has a safe harbor matching provision.  The husband and wife both make the maximum 401k contributions to the plan from their separate payrolls.    The wife's corporation contributes the safe harbor matching contribution to the plan for her, as well as the safe harbor contribution for the husband.   Is this OK, and does the wife's corporation get a tax deduction for both safe harbor contributions.

In general, in a plan with multiple participating employers, can one entity contribute for another entity's participants.

After submitting under the 5500EZ Penalty Relief Program, along with check, Plan Sponsor has found their missed 5500 which apparently was filed after all....

Any success getting the application taken back? Can't seem to find a number to call.

Below the scenario:

Plan was originally effective 1997. Taking over the administration of the plan 2019. 

No copies of the original plan document, the GUST and the EGTRRA restatement. Some amendments are in place, most interim amendments.

So would we have to create all these documents and submit to VCP?

Not sure why I am not in full agreement with approved plan of action.

Any guidance would be really appreciated. 

We have a plan transitioning to us, can we eliminate partial withdrawals for terminated participants?  We prefer full distributions only for them.  Is it a cutback?

Ok, say we can.  Plan signed sealed and delivered.  Restated for no partials.

Now, there is pushback.  The plan wants it back in.  Can we do the partial withdrawal now, then amend it retroactively to allow it?  Similar to when a hardship is granted when the plan initially allowed it.

Group:

In 2017 taxpayer/client sets up a leveraged esop where loan payments were to be made by Oct. 15 of each successive year.  Client has recently began an audit by TEGE dept.. No IDR response nor any site visits have taken place.  Client failed to make first year loan payment due Oct 2018.

Do I wait to cure late loan payment before auditor even questions why payment was not made?  After discussing with the TPA I'm leaning towards curing late loan payment + interest prior and make this part of our response in an effort to get in front of potential issue.

What has been your collective experience in auditors view on late ESOP loan payments and curing?  For what it's worth, there are a number of communications from advisors informing client to set up separate ESOP account but no account was even set up.

Thoughts and comments appreciated.

Warmest,

Joe Dadich, CPA, Esq.

When is the cut off for an employee to normally enroll in 401k plan?  For example, they meet eligibility on 7/1 but don't hand enrollment form until 7/15.  Is this ok?

Thanks.

Employer maintains defined benefit and 401K/SH.

Profit Sharing is discretionary.

How do you handle the top heavy combination?  Must a 5% contribution be made to the PSP, or 2%?

Attached is a screen shot of the details on how Costco matches employee contributions on their 401(k). I'm not too sure if I understand it. 

My Assumption: Costco will match 50% of your contributions. So if you contribute $42/month, then their match would be $21/month?

Is my assumption correct?