IRA owner dies at age 64, beneficiary is his older brother, age 69-70; brother dies at age 73 (presume he was taking RMDs), his beneficiary is his wife, age 67.  Does she treat the IRA the same as if it had originally belonged to her late husband or are there special rules because she is the second beneficiary of the same IRA?  What are her options?

Thanks!

Good morning, 

My wife has large percentage of her portfolio in her company/employer stock and we are trying to re-balance the portfolio. We are planning to sell a portion of company stock and transfer the cash to existing self-directed brokerage account within 401(k) and account is with Fidelity. 

The company’s share price is increasing, excellent management, and is a growth stock.  My question is, does 401(k) plans allow “Equity collars?” An equity collar consists of the simultaneous purchase of a "put option" and the writing of a "call option."

Most of the 401(k) administrators don’t know the nuts and bolts of finances. What is the best way to ask the administrator about “Equity Collars?” Could we transfer the shares to 401(k) self-directed brokerage account and use equity collar?

My wife doesn’t want to send a wrong signal to her employer by selling a large portion of company stock. Any suggestions and comments will be appreciated.  Thanks, Dabu.

if a business is an s-corp and the owner has 2% shareholder health insurance, is this part of their compensation that can be used for calculation purposes?  I don't think so since not subject to SS or Medicare?

Parties divorced and QDRO, prepared, qualified and signed by court. Sent to pension administrator. When distribution is made to Participant, nothing was sent to AP.

Who is wrong?

Company A and Company D are an Affiliated Service Group

Company B and Company D are an Affiliated Service Group

There is no common ownership between Company A and Company B

I understand Company D is included in the testing for Company A and also for Company B. Here is my question, does Company A and Company B need to be tested together? Does the ASG between D and these to entities require them to be tested together?

Is there an  issue if  eligibility/benefits under A and B are different?

If I read one more thing about ASGs I think I will scream. Having a root canal is better than figuring out ASG rules!!!

I am the CPA for a group of Doctor's who have a Cross Tested 401(k) & Profit Sharing Plan. In reviewing the Plan valuation report / Form 5500, I am not 100% sure that the TPA is doing this right, based on my limited understanding.

3 Doctors, all are HCE with income in excess of $275,000

6 NHCEs (Ages anywhere from 20-70, but most younger)

All eligible employees are participating, and the doctor's are contributing the $18,500 plus catch up.

Everyone gets a basic Safe Harbor match - 100% up to first 3% of wages, 50% of the next 2% - for a 4% Safe Harbor Match.

The HCE are getting a profit sharing contribution of $25,500 (9.27%) to get them to the max total contribution of $61,000.00

The NHCE simply get an across the board 3.09% (1/3 of 9.27%) profit sharing contribution.

Is this how the Gateway Allocation test is supposed to work?

My information seems to suggest that the Safe Harbor match goes in to the Gateway Allocation %....so if the HCE's are getting 4.00% + 9.27% = 13.27%, than the NHCE should only get a total of 4.42%.

I have a client who terminated their existing plan and transferred to a PEO.  A final 5500 Form was completed with a short plan year from 1/1/2018 to 6/11/2018 (I'm assuming this is the date all assets were transferred to the PEO plan with the plan number as 001). 

The client now wants to move out of the PEO and start a new plan sponsored by his company (same EIN as the prior plan) under plan number 002.  Since the last distribution date of the  terminated plan of the Plan Sponsor is less than 12 months, is there a successor plan issue, if the effective date of the new plan is 1/1/2019?

FYI - This is not a safe harbor plan.

If this is a successor plan issue, is the resolution to have a short plan from 7/1/2019 to 12/31/2019?

Thank you for any input.

Under the revised rules for amending a safe harbor plan mid year, the plan may not reduce the number of employees eligible to receive safe harbor contributions.

What if the mid year amendment were to exclude only the owners from receiving the safe harbor match?

Would that be possible, and if so, I'm assuming this would need to be a prospective amendment (not eff 1/1/2019)?  Owners have not deferred yet in 2019 anyway.

Thanks.

Ok so we administer a SH 401(k) plan for a local dental practice.  The dentist was the sole trustee of the plan and did all the payroll information and submission of funds weekly as his employees were paid, unfortunately he recently passed and now the office staff is trying to figure out how to submit the money that was withheld in February on behalf of the employees as it has not been done and now a bigger problem has arisen in that no deductions were taken in March for any employees.  How can this be resolved?  There is a current dentist that is in the process of trying to acquire the assets of the practice.  Whew a mess for sure.

I'm a little dense today....

I need the following paragraph interpreted for me.  It's safe harbor correction methods for employee elective deferral failures.... page 78. 

For the "No QNEC" needed.

(i ) Correct deferrals begin no later than the earlier of the first payment of compensation made on or after the last day of the three-month period that begins when the failure first occurred for the affected eligible employee or, if the Plan Sponsor was notified of the failure by the affected eligible employee, the first payment of compensation made on or after the end of the month after the month of notification;

Participant notified Employer that contributions weren't right 3/27/2019.  The deferral failure started with the first payroll of 2019, 1/11/2019.  There was an error by the Employer.

There is two pieces to the above paragraph.  The EARLIER.....?

First piece throws me off on really what it means.  Does this mean that if the Employer noticed the error, they have until first payment in April 2019 to get the correct deferrals started?

The second piece I follow, the Employer can get the right percentages coded, send the notice, make sure the appropriate match is made and move on.  The fix needs to be done in April 2019.

It appears that the EARLIER date of correction needs to be implemented by first pay of April 2019. 

Am I interpreting correctly?

Hi, can some one suggest how the IRS realizes our tax status?

I opened simple IRA from Fidelity with no corporation or no LLC. My spouse worked as independent contractor last year and filing taxes now. Can I take benefit from simple IRA. Spouse got rollover IRA though..

Thanks in advance

A plan terminates in 2018 and all assets are paid by 9/30/2018.  In March 2019, residual dividends hit a few accounts and are paid out to the participants.  I was planning to file a final Form 5500-SF for 2018 with an ending balance of $0 (accurate).  Do I need to file the final for 2019, instead?  In this case, both the beginning and ending balances will be $0 with a small amount of earnings and distributions.

If you think I would need to file the final for 2019, then I assume I would have needed to amend the file Form 5500-SF for 2018 if I had already filed it. 

I am frustrated with the investment platform because I can't imagine why dividends posted so late, although I would guess this issue is common when plans pay out final assets in December.  I did not quote the plan sponsor a fee for a 2019 filing because 2018 was intended to be the final.  I realize it is not a ton of work, but still.

My Company has a Master Trust that the IRS would call a Direct Filing Entity (DFE).  The Master Trust has the plan assets for several individual Defined Benefit Pension plans that we also file separate Form 5500s.  We also file a separate Form 5500 for the Master Trust itself as required by the IRS.  We use the Plan sponsor's (my employer) EIN for each of the Pension Plan Form 5500 filings, but we are not certain as to the proper way to report the EIN in box 2b for the Master Trust Form 5500.  The IRS has assigned us a separate Master Trust number that they would refer to as the TIN or maybe even the Trust EIN.  The Form 5500 instructions are not very clear with respect to whether the "Employer Identification Number (EIN) in box 2b should be either a)  The EIN number of the Plan sponsor for all the individual Pension Plans OR b) the Trust ID Number that the IRS assigned for this Master Trust.  Does anyone have any thoughts on this?  If so, if someone can actually point to an IRS source, other than the Form 5500 instructions, that clarify this? 

The SCP program suggests for a non safe harbor 401k plan that an acceptable correction for a missed deferral opportunity  is a QNEC equal to 50% of the ADP for that group. If the only two eligible NHCEs were left out in the first year of eligibility then my conclusion is that the ADP% for the group is 0 and the QNEC is 0. Hence, the ADP test is failed and the HCE deferrals must be returned or recharacterized.  Does this seem a reasonable interpretation?

Wife has a solo 401k that goes over 250k. In the same year the husband starts a solo 401k for his unrelated business. Husband and wife have a minor child, so they form a controlled group as I understand it. The EZ instructions say that all plans of the employer must file the form if the combined assets are over $250,000. My thought is that the husband must file as well. Wondering if others agree. 

Client sent a fax of a request to complete an online survey at www.irs-ppbsurvey.org

I don't like the looks of it, but I could be wrong. Has anybody seen this or completed it?

Suppose a bank or financial institution offers to provide preferred commercial lending rates to a retirement plan sponsor if that sponsor moves their 401(k) plan assets to the financial institution. 

Can anyone point me to any white papers or articles discussing this topic? 

Thanks!

Hi to All,

My most thought provoking client called a few days ago asking whether we keep records back into the 1990s and of course, we don't.  He had a phone call from a former employee who received one of those infamous letters from the Social Security Administration saying that he "might" be due a benefit from my client's retirement plan.  My client did happen to have proof of some sort in his office showing that this man was indeed paid out in 1998 and no further benefits are due.

However, my client wants to know what would have happened if he didn't have or couldn't find this information.  We have his plan's activity in our computer software back to 2005, and we have paper copies of everything for the last 7 years, but nothing as far back as the 90s.  

Whenever this has come up before in the various places I have worked, the position has been taken that if the plan does not have a balance for a certain participant today, then he must have been paid out in the past.  So far no participants that I dealt with have ever insisted that I "prove" that he or she was paid out.

How are other firms handling these inquiries?  Have any of you had a participant who wouldn't take "no" for an answer and insisted on proof that he or she had been paid out in the past? 

Thanks as always!

If an employer over contributed on the 3% safe harbor match for the 2018 plan year, they do have to have the excess taken out by April 15th?

A plan sponsor was running payroll for another non-profit and allowed an ineligible employee into their 403(b) plan. Rather than doing a (relatively) simple correction, they'd like to try and recast the plan as a multiple employer plan. I don't even know if the prototype sponsor would allow them to do this. I guess my real question is would they have to refile 5500s for the years where the ineligible employee made contributions? Any other exposure on making this move?

Thanks.