Husband and Wife each have their own 401(k). They are a controlled group do to minor child . In completing their Ezs, the participant count should be 2 since the other spouse is eligible to defer but I do not combine the assets since they are separate pools. Correct?

An active employee participating in a 403(b)(9) church plan wants to defer his unused vacation time to the Plan.

I know there is a provision (Rev. Rul. 2009-31) that allows for active employees to have their unused PTO contributed to a 401(k), but I did not find such a provision for 403(b)s. The only thing I could find in respect to unused PTO being contributed to a 403(b) is via a post-severance contribution (Pub. 4482).

Does anyone know if a 403(b) plan could allow for an active employee to contribute (either via deferral or arrangement with employer for a non-elective contribution) unused vacation and sick pay to the 403(b) Plan?

We had to reduce an owner's contribution because of the 30-day crediting rule.  The owner is self employed and wants the maximum contribution but will be limited to $41,000 ,including catch up. A refund of $10,000 in elective deferrals was necessary and following EPCRS Rev Proc 2008-50. (per plan doc).  ERISA book says these refunds of elective deferral are disregarded for 402(g) / ADP Test.  The plan is a Safe Harbor 3%. 

The total contribution of $41K was used for the cross test due to the limit.  Question - should elective deferrals be $18,500 or $10,500 in the cross-test??  I'm inclined to the later but corrective distributions are generally included for ABT.  If the former is used, I'm basically "making up" for the that amount that has will be refunded...doesn't seem correct.  This will have an effect on minimum gateway since we're trying to get to the $41k.  

A discussion in the Litigation message board that may also be of interest to readers of this QDRO message board.

https://benefitslink.com/boards/index.php?/topic/64088-alternate-payee-dies-before-qdro-does-his-estate-have-a-valid-recovery-claim/

Hi,

I would greatly appreciate insight on this matter. Client had a company "A" (since 09) and a DB PLAN for company A since 2012. In March 2019 he sold "A" --however, corporation is still in existence and its only asset is aprox 10,000 in cash. In April 2019 he set up a new corp "B" (set up a corp and purchased the assets of a business). Company B has new employees and does not do the same service as '"A" corp did.

1.  Is he allowed to continue the DB Plan of 'A" for company "B'? (so that he has prior service and benifits from "A" and salary average from "A")?

2. If yes, is the owner the only employee eligible to participate in the plan for 2019 (as he has a year of service from the prior company and is the ONLY employee that will have 1,000 hours for 2019). Thank you very much for any insight on this matter,

Meeting with ex-W tomorrow.  She is plan participant, age 65, retired.  She and ex-H divorced 10 years ago, both pro se.  Judgment provided for division of her retirement account, but no QDRO was ever drafted.  Husband died recently.  Daughter of couple is designated as beneficiary.    Estate is seeking to recover portion of W's retirement account based upon divorce judgment.  Valid claim?

Hi,

We have a plan we recently became the auditor/5500 preparer for that is a multiemployer H&W plan.  One thing that was noticed in discussion with legal counsel and trustees was that the EIN for the Plan is different than that of the EIN of the Exempt Trust.  It looks like the EIN used is actually the same as what is also used for the Pension and Annuity Plans, but obviously uses a different plan # (in 500's). 

This 5500 has been filed for many years under this EIN, while the Trust files the 990 under its EIN.  The #'s agree between the 990 and 5500 (that is to say there is no other Trusts under this Plan # for 5500). 

The Trustees would like to have both the 5500 and 990 EIN match to the exempt Trust EIN (same as 990).  So, we were looking into the best way to handle changing the 5500 filing EIN.  There doesn't appear to be any way to easily just change an EIN for a plan and keep going on with that plan as if nothing else changed.  So, our first thought was we would likely have to file a final 5500 (probably at year-end would make sense) and zero out all net assets and transfer out.  Then on 5/31/19 have an initial 5500 filed under the Trust EIN showing the transfer in of all net assets.  Does this make sense to handle this way or is there a better way to handle this? 

As usual, the IRS was not very helpful and this is definitely a situation we've never encountered. 

I know with the final 5500 we'd need to include our audit.   Would we have to include an audit with the initial 5500 as well?  Or not until 2020 year-end?

Are there other items we need to consider in this whole process? 

One thing I wanted to verify with Plan Management/Legal counsel is that everything is under the Trust's EIN and not the Plan EIN we are closing out. 

Any feedback would be appreciated.

-Taffy

Calendar year 401(k) plan terminates 1/24/2019, final distribution 4/5/2019.

Am I correct that a 50+ year old participant has a 415 limit of $10,666.67?

Thanks very much.

Partnership consists of 5 doctors: One doctor is a 95.96% owner, and the other four doctors own 1.01% each. 3 Doctors are considered Highly Compensated by definition, and the other 2 are not.

For 2018, all 5 doctors made elective deferrals to a 401(k) Plan. 95.96% doctor owner wants to make the additional $36,500 employer discretionary contribution on his behalf, not realizing that his plan is a New Comparability plan and undoubtedly top-heavy as well (I am not the TPA on this, getting second hand information here). Their current TPA requires "a couple of weeks to perform the "pressure testing" (never heard it called that before)" to see what the employer contribution will be for the company.

Complicating matters, the accountant filed the Form 1065 without extension; no employer contributions have been made as of today. The question coming for all is if the 2018 Form 1065 is amended to reflect the employer contribution that is necessary, does that give the company the additional time to make the contribution and have it deductible for 2018.

Thanks for any replies.

If an employer wants to allow for after-tax employee contributions, then those contributions are tested in the ACP test.  If the plan operates as a safe harbor match, does that mean that ACP test passes the inclusive of the after-tax employee contributions?

Thanks

FACTS

• Plan is top heavy
• Plan entry has immediate entry for 401k, 1 yr and age 21 for profit sharing source
• Plan is safe harbor

Any participant who entered the plan immediately for 401k but did not yet meet the eligibility requirements for profit sharing and is not terminated is subject to receiving top heavy minimum.    Is the top heavy minimum given to these individuals as safe harbor or profit sharing?    Thanks

CPI-U released today

254.202, a huge spike from last month (Feb was only 252.776

At that rate the 415 limit will be 57,000

and comp limit of 285,000

the rates used to determine the limits (Jul -Aug) have never been less than the Mar value so  looking like the limits will increase even at this early date

Sponsor wants to allocate the forfeiture balance as a fee credit to participants with balances. The participants receive a forfeiture "credit" proportional to their account balance, and not necessarily with regard to the actual fees they were charged that year or over multiple years.

My questions are below. Any input is appreciated.

1) Does the fee credit have to represent actual fees incurred over time in order to be a valid reimbursement?

2) Is this a legitimate way to expend the forfeiture?

3) Should the forfeiture credit be an annual addition?

We submitted one last August.  As of today it is still not even assigned.   Anyone else seeing this?

A participant's RMD for 2018 from a 401(k) plan was calculated as $160,000.  He transfers $100,000 to a charity and takes a taxable distribution of $60,000.  We find out after-the-fact.  How do we fix this now? 

My initial thought is issue 1099-R for a taxable distribution of $160,000 to the participant but curious about other opinions.  Thanks.

Partner A owns 50% of Firm 1 and 100% of Firm 2.  Partner B owns 50% of Firm 1 and 100% of Firm 3.  Business is wealth management service and all 3 firms are S-Corps.  Firm 1 is support staff and expenses, while firms 2 and 3 are the respective partners.  Does this represent an Affiliated Service Group?  I note that the partners are both licensed.  Finally piece of the puzzle is that the one support staff working for Firm 1 is a leased employee, where the leasing firm provides a 401(k) plan with a 100% of 1st 4% Safe Harbor Match.  That Match is paid by Firm 1 (indirectly paid by Firms 1 & 2).  Is there a coverage issue if Firm 2 and Firm 3 have SEP's that only cover the respective partners?  If firm 2 replaced its SEP with 401(k) covering only Partner A would that cause a problem?

Someone would like to set up a SEP for their business for 2018 (by 4/15/19.)  It is 2 partners only and one partner wants to max out SEP but other one wants to put in less.  Is there a waiver form or something that can be done to have different contribution amounts since they are both partners and no non owner employees?  Thank you.

Hi,

My employer has a policy that the 401K contribution can be started only after 90 days. I joined on 8/27/2018 and I wanted to maximize my 2018 contribution so I setup 100% deduction in November in preparation of my eligibility starting December 2018 paycheck.

The payroll could not process this election since it got confused with 100% and could not accurately calculate taxes etc. After multiple back and forth with plan and the payroll, the issue finally got resolved only in mid Jan 2019.

Based on this IRS article, it looks like I may be eligible for the fix by the employer and should receive 50% of my missed deferral amount. Is that accurate understanding?

Thanks, Dhaval

Just received financial statements for a partnership with 2 partners. Based on the income of the company and the split to the partners, the plan fails ADP testing (no match), and both partners will need to receive substantial refunds for their 2018 contributions.

Question is are the refunds subject to the Form 5330 tax for failing to make the refunds before March 15.

I looked through the messages here and couldn't find any previous guidance. Any replies would be appreciated, thanks.

If a sole proprietor in 2018 (1) terminated a solo 401(k) by written resolution, (2) rolled the funds to an IRA and (3) filed a final 5500-EZ reflecting a zero "end-of-year" balance, is it possible to resurrect the 401(k).

I have seen other discussions about reversing (1) and (2) above, with the consensus being (I think) that reversal is doable by a new resolution and moving the funds back to the 401(k) account.  But what about filing an amended 5500-EZ reflecting the renewed status of the 401(k)--after a "final" 5500-EZ has been filed?

Any thoughts appreciated.