Dual entry, SHNE with profit sharing. for initial year of participation, compensation based on w-2 from date of entry. In reading the EOB, compensation must be based on full years' W-2?

If the beneficiary form clearly states the name of the retirement plan and the name of the insurance policy, can the one form be used? A client of ours was trying to cut down on making employees fill out two different beneficiary forms when the employee wants the same beneficiary for both. 

LLP with 3 PAs (1 for each dr, LLP covered shared staff) broke up in February 2018.  One of the drs kept the LLP and his PA.  Some of the staff left, as did the other 2 Drs.  At this time we assume those two PAs are still in existence (they were on 12/31/18, PYE).  All are still participating ERs of the plan.

When would the plan be considered a multiple ER plan?  For 2018, the year the partnership broke up?  Or for 2019, the first full PY that they were not a controlled group of companies?

If the other 2 PAs (drs) cease to be participating ERS, when would that "kick out" the multiple ER "designation" - in the year it happened (like 2019 for example, if the plan is amended) or the year after the amendment?  See where I am going with these questions?

TIA!

Just wondering how some of the practical aspects will play out with recordkeeping platforms, reporting, etc. For example, the SCP loan default correction. This is great, but suppose a loan defaults in year one. Deemed distribution is reported. 2 years later,  as allowed under the Rev. Proc., you "correct" this so that there is no taxation. Are you allowed to amend your previously filed income tax returns? How far back can you go to amend a personal return? What documentation is required to do so, etc...?

Thinking about plan design. ER has one owner, 40's, minimizes pay.  Would like to start up new plan and willing to increase self pay to allow for contributions.  401k, safe harbor are fine. But this approach does not mesh well with xtested design since ratios are too high to pass. pay too low for integrated formula to function too. thinking about other design considerations.

Suppose you have a typical db/dc combo but with the db 21 and 1 and the 401(K)/profit sharing immediate entry across the board. The two plans are a required aggregation group that is top heavy..Do the general rules that not allow you to restructure to avoid the gateway apply even if the restructuring is only to carve out the otherwise excludables….?  

A participant has contributed $20,000 in pre-tax deferral for the life of the account and a loan was taken in the amount of $7,000. The total cash balance in the participant's account is $15,000. Can the participant apply for a hardship withdrawal for the full account value since technically the basis is $20k? If the full amount is available for hardship withdrawal, is the assumption that the earnings are included in the loan asset account and therefore the withdrawal was correctly limited to solely to the contributions made by the participant?

I'm working with an employer who has employees who do not work over the summer.  They will continue to be covered under the employer's group health insurance plan but must pay for their portion of the premiums which would otherwise come out of their paycheck.  We are concerned about what happens if the employee does not pay their portion of the premiums.  My understanding is that there is a 30 day grace period under the ACA and that if the policy is canceled for non-payment, the employee is not eligible to re-enroll until the next open enrollment period.  My questions are:

1) Is it correct that there is a 30 day grace period under the ACA?  

2) If so, do you know what statute or regulation requires it?

3) Can state laws require a longer grace period (I believe they can for individual plans but can't find any information on group plans)?

4) Is it correct that they cannot re-enroll until the next open enrollment?  Any cite for that?

Thank you so much for any help you can give me.

Am I reading correctly that you cannot amend a safe harbor mid year to change In Plan Roth Rollover provisions?  We want to amend to allow for this to all amounts whether a distributable event or not.  Our document currently states there must be a distributable event.

Thank you.

Does a Plan need to actually make amendment the Plan Document to eliminate the requirement that elective deferrals be put on hold for 6 months? 

Are people responding to this? I have a client who has received 3 reminders to complete this "voluntary" survey?

Please advise what you guys are doing?

A plan was established in 2016. The TPA provided an adoption agreement effective January 1, 2016. One trustee signed it December 19, 2016 and the rest signed it 1/1/17.  Contributions were not taken until 2017. What can the Plan do to remedy this? They are moving to another recordkeeper, and the shortcomings like this with their current provider are why.

With a SHNEC provision, I know that discretionary matches above 4% are subject to ACP testing. If they also want to fund PS, how much of a margin could they have and still pass?

An employer has a group of employees that are will become union members, the collective bargaining agreement begins mid-year. The calendar year 401(k) plan provides a safe harbor match. The union has negotiated to be eligible for deferrals in the plan and for some nonelective contributions, but no match.

Can the plan be amended mid-year to exit safe harbor just for the union employee group only, to reflect the bargaining that occurred, but still keep safe harbor status for 2019 for the rest of the plan, the non-union portion?

Participant originally requested a lump sum distribution.  Asked his Employer if he can change his mind.  The original paperwork had not been processed so TPA told the Employer to have  the participant to complete new distribution paperwork.  The original request was never cancelled by TPA and in Nov 2018 a distribution check is issued to a participant as a lump sum distribution.  Taxes withheld and participant cashes check.

The "new" distribution paperwork is received and in Dec 2018 another (duplicate) check is issued to the participant as a rollover and sent to rollover institution.  No taxes withheld and check is cashed.

Lots of issues on this one, but if we want to correct it as if the lump sum distribution did not occur, how can we fix it?  A corrected 1099-r has to be issued, but how do we get the taxes back from the Government?

Hi to All,

BACKGROUND:

I have a very difficult client who is already perturbed with me because we can't process her RMD for free, we can't give it to her in quarterly installments, and we can't endorse a rollover of all her assets into her IRA and THEN taking her RMD.  All of my research indicates that she must take the RMD first and then roll the remainder from the 401(k) to the IRA.

She is terminating her plan effective 05/31/2019; her date of birth is 08/26/1948; she turned 70.5 on 02/26/2019.

QUESTION:  Her RMD is a bit over $31,000.  She has called several times insisting that when it is processed, her broker will send $10,000  straight to the United Way, tax free, and the remainder which is of course taxable, will go to her.  Now that I go to actually research and try to accommodate her wishes, I am finding that this is not permissible.  According to my research, she could have done this out of an IRA, but not out of a 401(k).  Do any of you know any way that she can somehow avoid taxation on the portion she wants to donate to charity?  Can she recoup it somehow when her 2019 personal taxes get prepared next spring?

Thank you for any observations or advice.

We have a client who just started their 401(k) at the beginning of the year.  They have essentially been shut down for days due to ransomware.  They still do not have access to most of their computer functions including payroll.  All election forms are electronic.  And emails are down.

Payroll was manually completed last week (approx 500 employees) and the bare minimum was done to get paychecks out.  FICA, Federal and State withholding.  As their software handled the employees 401(k) in the past they did not have deferrals taken out of the last payroll.  And it appears that they will still be manually required to do payroll for a while (they are not paying the ransom but there are backup issues).  

FYI, safe harbor plan with standard match, determined on a payroll v payroll basis.  No true up.

I have not encountered anything like this in the past.  Generally you can make up missed deferrals if the participant has enough time to make up what was not deferred.  Trying to formulate options.

Any thoughts would be appreciated. 

I have a control group of 10 companies, 1 plan that is excluding 9 companies and all Highly Compensated Employees.  Am I correct that at least 70% of NHCE's need to be eligible to pass 410b?

If company the total of all of companies NHCE's is 100 and only 7 are allowed to participate doesn't this fail?

Unrelated person 1 owns 70 percent of company 1.  Dad owns 9 percent, and has three minor children.  It is my understanding that for controlled group purposes, you first test unrelated person 1 and dad with their ownership in a second company, then unrelated person with child 1, separately with child 2 and separately with child 3.  In other words, all individuals are not tested at the same time and you never have at the same time ownership of more than 100 percent when you do a test.  Derrin Watson does say this in an old 2001 Q and A, but I can't seem to find any authority. Can anyone find a cite to formal or informal IRS guidance that so states?

Is this also true with a grantor trust, where the grantor is always attributed the trust shares, and for example two beneficiaries have an actuarial interest in the trust shares?

For a 12/31/2019 valuation, can an election by the plan sponsor be made before the end of the plan year (12/31/2019) that states the plan sponsor will burn enough of the prefunding balance so that the 12/31/2019 AFTAP and FTAP will both be at a minimum of 100%?  Or does the election have to state a certain dollar amount that will be burned?

In the case of an end of year valuation, you won't know the end of year liabilities until the following year and then it will be too late to burn a portion of the prefunding balance for the prior year.  If the election must state a certain dollar amount that will be burned, how does everyone handle a situation like this where you want to maintain the AFTAP and FTAP at 100%?

Thanks in advance for the insight.