Is it possible to carry forward part of your contribution of your aggregated qualified plan if you don't max it out? Thanks

I'm currently going thru a divorce.  No excuses but trusted a few people along the way to guide me and now I'm very confused.  Signed Stip of Settled in regard to my ex's Defined Benefit Plan says Husband will be required to take a 100% survivor option with a pop up.  My ex's plan has the Shared Method and Separate Interest Method.  We hired a third party to prepare the QDRO.  I was told based on that language i had to go with the Shared Method.  There was no mention of preretirement survivor benefits mentioned.

We went back to court a couple of weeks ago and amended the Stip of settlement to add Plaintiff will agree that Defendant is a surviving spouse for the purposes of Qualified PreRetirement Survivor Annuity QPSA.  Plaintiff is directed to Elect the QJSA if there is post retirement death.

Defendant can elect to receive her benefits at the age of retirement.

I'm the Defendant.  I was married for 28 years to a Narcissist.  If I am forced to go with the Shared Method, he will never retire.  Can anyone offer me any guidance as I'm feeling very defeated.

We have a client who is sole owner of a Sub-S LLC.  She has no employees at this point and has K and DB plans.  She informed us she is going to hire a personal assistant who will work for the business but also do domestic work in home - likely split about 50/50 and will work over 1000 hours between business and domestic.  The problem is the client has relatively low income but makes singificant K/DB contributions.  She does not want to cover the employee.  The employee is only 4 years younger which is not helpful for the DB plan.  Fortunately the employee will not be eligible until 1/1/2021 but we have been asked to advise the client as to coverage.   Is a sole-owner business required to be aggregated with that owner's domestic employee?  Likely the IRS would say yes.

Any comments?

Hello all, 

I have a quick and hopefully easy questions for you. 

Current 409A plan does not allow participant elections of time or form of payment.  The plan specifies that payment will be made at the earlier of:

Separation from service, Disability, Death, Change in control

The employer now wants to add a Retirement Age of 65 (currently no Retirement Age is specified in the plan) and add Retirement Age as a payment event so that the new time of payment will be the earlier of:

separation from service, disability, death, change in control, Retirement Age

It is my understanding that this could be considered an acceleration of payments and is therefore not permitted for existing amounts already deferred.

Can the plan be amended to add Retirement Age for future deferrals of compensation without violating 409A?

Thank you in advance for your responses! 

Mike 

Hi to All,

In calculating the potential maximum contribution for the partners in a LLC, which number on a K-1 for Form 1065 is used as the equivalent of a regular employee's W-2 wages for purposes of calculating a contribution?

We are working on a plan where a prior administrator in past years has used Item 14A, "Self-employment earnings (loss)" as the magic number for the year upon which to make calculations.  We'd like to know if this is the correct approach.  Maybe I should clarify that Item 14 does not automatically come with the letter A attached.  Whoever prepared the form has put that in there, which according to the list of codes, means that the number is ""Net earnings (loss) from self-employment".

Thanks as always for your comments.

A closed MEP is forming and has asked about the 20% Top Paid Group Election. Does anyone have any insight as to the mechanics of how that would work? The plan document is sparse on this topic. 

Some well paid folks may occasionally switch between entities. Does their compensation from all participating employers count when ranking by compensation? I would think not. The document does say Total Compensation is used, and Total Compensation is that of the Employer. In this case each Employer is separate (as opposed to a related CG or ASG where there are multiple entities treated as a single employer). So only compensation from the entity doing the analysis would count?

I believe each entity would do it's own 20% analysis, since each entity's annual testing is mostly done separately, but I don't deal with MEPs often. 

The top paid group election is a choice the businesses plan on making as a group, as the current game plan is to have all entities ( 5 or 6 small employers) have identical provisions. 

My employer had a 401k plan set up in his office and he is small business owner.  He never offered the plan to anyone and actually lied and said at times he didn't have one.  He did in fact have one and he is the only one who participated in the plan. He is incorporated so he as an employee was the only was that invested in the plan.  I've told him I know and tried to let him make it right and he fails to admit he has it and said it was not set up properly so its not a valid complaint.  Its a lie I talked to the person who was his contact with the 401k plan and she explained to me what a safe harbor plan is. What do I do ?  How can i report him and make him pay me?

A new 401(k) plan with a January 1, 2020 effective date. The plan requires age 21 and a year of service (1000 hrs in 12  mo) for participation, with semi-annual (Jan & Jul) entry dates. As we establish which employees will enter the plan on the effective date, we have noticed there are several rehires during 2019, who had previously worked for the plan sponsor. So, how do we determine initial eligibility for people such as JOE and SUE, below?

JOE previously worked (fulltime) for the plan sponsor from January 1, 2015 until December 31, 2018. JOE was rehired (fulltime) July 1, 2019 and worked 1,000 hours during 2019.

SUE previously worked (fulltime) for the plan sponsor from January 1, 2015 until April 15, 2019. SUE was rehired October 15, 2019 and worked 1,000 hours (combined) during 2019.

And what other factors related to "eligibility and past service" should we consider, if any? (By the way, determining years of service for vesting appears much simpler. Or, at least, it does with the plan document in use for this plan.)

Dangers of individually directed plans with participants being able to select where assets invested:

Participant moves money from brokerage to credit union IRA account. (No, she shouldn't have had the power to make the withdrawal or establish a new account without the permission/guidance of the Trustee).  Participant starts withdrawing money from the Credit Union Account and essentially empties the account to the tune of $30K.

Generally, when this happens, the employer will terminate the employee and the withdrawal would be treated as a distribution.  No such luck.  The employer does not want to terminate the employee, leaving the conundrum of how to correct the plan.

Since the funds were safe-harbor and deferral and the participant was below age 59 1/2, in-service distribution doesn't help.   Rev. Proc. 2019-19 6.06 (4)(b) seems to indicate, in this case, that after reasonable attempts to collect are made, there is no requirement for someone to repay the plan if the distribution was made to a participant or beneficiary.

Any thoughts on how you would handle?  Advice to sponsor?

Good morning

Would like to check/confirm the following:

Client wants to start a DB plan for 2019. Informs me that put away 20k in a SEP already. This is already in excess of 6% projected 2019 salary (non-PBGC - one lifer)

Under deductions rules, 31% application, max 2019 deduction is 50k (based on current comp - will not increase). SEP was 20k and DB deduction cannot exceed 30k. if opnly SEP, max deduction is approx. 40k.

Q1: Cannot take back the SEP, correct? If not, how can it be done?

Q2: If a DB plan required 100k of contribution and only 30k is deductible for 2019 (as per above), assuming that there will be room for 2020, can the remaining 70k deduction be applied towards 2020, in addition to the 2020 100k DB deduction i.e. 2020 total deduction can be 170k? Or, DB plan design for 2019 should have no more than 30k of required contribution? Client wants 100k each year and start in 2019.

Thank you for your comments.

Can a under Age 59  1/2 employee withdraw funds from a Rollover Account that used to be a Simple IRA? 

Meaning company had Simple IRA Plan.  They converted it to a 401k Plan and Simple funds were rolled over.  Now an employee who is under Age 59 1/2 wants to withdraw his Simple IRA Rollover Funds from the Plan.  Thank you.

Specifically looking for cases/authorities that would demonstrate that a health plan participants decision to be a surrogate for profit would not be covered under a health plan that prohibits coverage of occupational illness incurred from work for profit, including self employment.

A "Supplemental Unemployment Benefit Plan" is organized under 501(c)(9) to provide life, sickness, accident and similar benefits. It is in the construction trades and vast majority of claims paid are due to periods of temporary unemployment. It also pays benefits in cases of death, disability, etc.

Can this 501(c)(9) VEBA pay a stipend in connection with bereavement leave? This would seem to satisfy the regulations by protecting against a contingency that would interrupt a member's earning power, but I cannot find anything that answers the question one way or another. 

Thanks in advance. 

I'm a Relius document user and am seeking advice (since they don't seem to respond as quickly as they used to). They posted a notice on the site with regard to the safe harbor notices saying to select 166b on the checklist and then:

"Clients can run a provisional report within RD ASP using the logic string in paragraph 166b as their selections. This report will assist in determining what action, if any, is needed regarding 166b for 2020 annual notices".

Can anyone out there tell me how to run a provisional report in RD ASP???

If not, does anyone out there have suggestions on the safe harbor notice revisions due to the hardship distribution changes that have not been incorporated in the SPD (or even an SMM) at this point? Some folks hemmed and hawed at ASSPA Annual, but I didn't get anything concrete in the sessions I attended.

Thanks.

James

401(k) plan allows for entry / change to employee deferral contributions on Jan 1st and July 1st each year.  An employee was eligible to start deferring on 07/01/19 and was given notice of their eligibility to defer.  The employee did not inform the Plan Sponsor that they wanted to defer until the end of September 2019.  The Plan Sponsor starting withholding with the next payroll.  Would this be ok based on the SH brief exclusion rule or should the employee deferral contributions be refunded and the employee informed that they may start deferring on 01/01/20?

50% owner sells ownership in C-Corp, will be paid $500,000 per year for next 5 years as payment. Continues to work for C-Corp and draws a salary. Can this person open up an S-Corp to receive the $500,000 per year and have the S-Corp start a qualified plan just covering himself?

Good Afternoon  All -

Participant took a loan 2 years ago ( 5 year note) and has been making payments as required via payroll deduction.

Participant has told the employer she can not afford the payments and to stop the withholding - she will default on the loan.

1. The loan program requires payments be made via payroll deduction until the loan is paid in full

Can a participant  just stop their deferrals?  Seems to me,  if the employer allows this employee to stop, they have opened the "black hole" for others to do the same. Some how the IRS would have to view these as  sham loans - done as a way to get funds not otherwise available.

Doesn't stopping the loan payment cause the loan to violate 72(p)?

I have read some states mandate if the employee tells the employer to stop a withholding, the employer must stop. Even though this is contrary to ERISA.

Thank You for  Friday afternoon help!!

Plan terminated and final short-year 2017 5500-EZ was filed (single/owner PS plan).  All known assets were rolled over to an IRA in 2017.  It was discovered recently in 2019 that 2 plan investments- stocks worth a fairly substantial amount - still exist.  It was apparently discovered due to dividends being paid this year.  These 2 investments were held outside the main brokerage account but per the client, were/are titled in the plan's name.  Client wants to rollover these 2  investments now to an IRA.  Due to the passage of time between plan termination and now, I'm thinking it would be a failed /excess IRA rollover.  How do we fix this?  Any ideas?

Under a multiemployer health and welfare plan, an employer and a local union enter into a collective bargaining agreement which includes a provision that permits the employer to request detailed claims information (which has been santized of HIPAA protected health information) from the fund. The fund is not a signatory to the collective bargaining agreement but later an individual who is both a local union officer and a union trustee for the fund signs in both capacities assenting to the preceding terms, including the portion of the CBA allowing the employer to request detailed claims information. Does the signature  on a letter by an individual who is both a local union officer and a union trustee for the fund in both capacities bind the fund to comply with the employer's request for detailed claims information?

I recently had another Investment professional mention to me they are using Index funds because of DOL guidance that any deviation from Index funds should be documented in terms of reasons why you are not using Index funds. Has anyone seen any guidance like this?  I cannot find any guidance except for ESG guidance.  Is there any specific investment guidance from the DOL regarding which funds should be used?

TIA