A client's 401(k) Plan is undergoing an IRS audit and the auditor requests both an Allocation Schedule and a report of 401k contributions for each pay period. 

Anyone know the difference, or what exactly they're looking for in an allocation schedule?

Let's say the plan requires 1 year of service with 1,000 to become eligible. The entry dates are 1/1 and 7/1 (semi-annual). Also, let's say if the participant did not complete the 1,000 hours by anniversary date, the plan changes the eligibility computation period to calendar year.

An employee is hired in 2018 (let's say on 1/10/2018). He is terminated in 2018 before completing 1,000 hours. He is then re-hired in 2019 (let's say on 2/10/2019 - so he hasn't completed 1,000 hours by anniversary date) and works 1,000 hours in 2019 calendar year. Would he become eligible on 12/31/2019 (and enter the plan on 1/1/2020) or 2/9/2019 (and enter the plan on 7/1/2020)?

Basically, would the plan switch to calendar year eligibility period because the employee did not complete eligibility by anniversary date? Or, would he be treated as a new employee as he did not complete the eligibility requirements by his initial anniversary date?

Thanks.

From a Sole prop., husband and wife only, DB plan, a direct rollover distribution from the DB plan unrelated rollover account was made to the Sole prop newly established 401(k) Plan as internal transfer in 2018.

The TPA who is also the recordkeeper  didn't think a 1099R was necessary because of the nature of the internal  transfer between two plans of the same employer, Sole prop.

Wasn't 1099R required when the money leaves one plan regardless of whether it was direct rollover within the same sole prop?

If so, how can we correct it now May, 2 1/2 months after  the due date?

If possible please include the section of the code that pin-point a situation like described.

Many thanks

AdKu

A 401k plan converted from one investment product to another product with the same recordkeeper.    A couple, but not all, funds in the plan's core lineup changed and the account number changed.   Discovered that the notice to the participants announcing the change was not delivered.   Is the fix to forward the notice now to communicate the change?   What other correction would / should be made?   Thank you

I googled on the topic, but did not find this situation addressed in the 401k fix-it guide and no articles or citings came up regarding the specific topic....

I have a court ordered QDRO, and am the alternate.  I hired an attorney to process and submit to the judge for approval. On the last page, the signing page it has my name as the petitioner and Pro Se. I know that Pro Se means by myself or no representation, is this standard procedure?

I appreciated you articles and was wondering if you can help me understand irs rules re ownership vs voting control. I have a question about controlled groups for 2 corporation 1 SCorp individual A owns 100% , individual A also owns 49% of a c-Corp but has a retained proxy voting rights for an additional 5% of the c-Corp (so he has voting proxy for 54%)  would both companies be a controlled group for 401k and DB plan purposes. 

We have a client who is a 5% owner through attribution and still working.   He turned 70-1/2 in 2015.   It's a 401k self directed account.   

For reasons I can't explain, probably because the attribution wasn't coded correctly, he didn't receive RMDs.

Based on actual account balances RMDs for 2015, 2016, 2017 and 2018 have now been made without regard to earning or taking into account an offset for expected RMD.   

The client is leaning toward filing VCP to request waiver of the excise tax.

Here are my questions: 

1.  How should I have calculated the RMD?  

2.  Should I have taken the expected RMD for the previous year into account when calculating the current RMD?

3.  Is there any good examples or explanations on how to prepare the VCP filing?  I think I can do it on 14568 and 14568-H but I am not sure.

Thanks for any light you can shed on this murky topic!

I have a plan participant that wants to roll his IRA into the 401(k)(allowed by the plan).  He is over 70 and has taken his MRD for a few years.  Can he stop taking his MRD now that the funds are in his 401(k) plan?  He is still working for the plan sponsor and making referrals.

An employee was excluded from a DB Plan for the past three years (backed by plan document). The plan met 410(b) and 401(a) (26) without having to include this employee. For the current year (and forward) the employee will be included. The benefit formula is based on service.  The employee was not excluded based on job classification or union status etc, rather he was excluded by name.

 If the document states that benefits will not accrue for years that an employee was part of an ineligible class, will the employee only accrue a benefit for the current year and not for the prior years of service (or now that the employee is a participant he will accrue benefits for the prior years as well)? Thank you for any insights on this.

During 2017 a Plan Sponsor bought another company.  The other company had a 401k Plan separate from his original plan.  During 2018, company 2 rolled all account balances into the original 401k Plan (& plans were amended to be merged) .  However, on 12/08/2018 he sold the 2nd company.  The participants' account balances are still in the plan.  The two companies operated separately (in different  states)during 2018.   I hope I am making sense - my question is - do I report this as a controlled group for 2018 or a multi-employe plan? If multi-employer, does anybody have a sample of the "listing" that is required to be attached to the 5500?  They were separate companies again by 12/31/2018....

Comments or experience with this type of situation??

TP is over the age of RMD and 100% owner of an S Corp. Currently funding the 401(K) with maximum tax deferred amounts per year.

Wondering if a participant like this (IE the age being my primary concern) fund after-tax and use in-service Roth conversions.

Currently they have $25K deferral plus 25% of salary.

 

I am trying to help a client file through VCP to bring their plan document up to date.  They missed both the 2010 and 2016 restatement deadlines.   I have a copy of the adoption agreement that was executed in April 2003.  I am trying to track down a copy of the Basic Plan Document that accompanies the Adoption Agreement.   The Adoption Agreement was sponsored by Universal Pensions, Inc. which I believe sold out to Bisys, who then later sold to Ascensus??  The adoption agreement is the Standardized Adoption Agreement.  The bottom of the document indicates # 8016 (8/2001)   Anyone out there that might have access to the Basic Plan Document that accompanies this Adoption Agreement?  

A client (an LLC) was entering into discussions to provide a SERP to a top executive. The SERP would provide nonelective deferred compensation (no election by executive or deferred compensation agreement) payable in fixed installments over 5 years (at termination of employment, disability, death, etc.) with death benefits paid in the same form and at the same time for the surviving spouse.  Sadly, the executive died before the SERP was executed. The client wants to complete and execute the SERP and provide the death benefits to the surviving spouse. I think this is possible (I have put in non-elective SERPs with effective dates retroactive to the first day of the executive's tax year), but have never come across this issue before. I am a bit concerned that Reg. Section 1.409A-1(b) defines a deferral of compensation plan as a plan where the service provider has a legally binding right during a taxable year to compensation that is payable to or on behalf of the service provider in a subsequent taxable year. Technically,  the service provider didn't have a legally binding right to the SERP before death, and is no longer a service provider when the SERP is executed.  Any thoughts and comments are welcome!!!

Currently the plan makes all match contribution each payroll period. However the match is based on annual comp/deferrals -  aka a True Up.

The employer wants to change the match to a payroll  period only.  No true up.  Can this change be implemented mid year?

Thank you.

Wouldn't it be useful to view all topics started by a particular member, or to which the member has contributed (i.e., added a reply message)? For example, if you find Texas attorney Luke Bailey's contributions to be particularly valuable to you, you can use the message boards search engine to generate a list such as this one (click).

You can get a similar list for any member -- here's one way. When you're reading a topic on the message boards, click on the member's display name (displayed next to each message). Then click on the resulting "See Their Activity" button.

Another way, if you know the member's display name: use the message boards search engine (which, if you're using a desktop monitor, will appear as a box toward the top left of each page on the message boards, with a magnifying glass icon in it, and the word Search...).

1. Click the word "Search..." in that box
2. Click the "More Options" radio button
3. Click Members
4. Enter the display name of the member that you see being used here on the message boards (sometimes it's a full name, sometimes it's a "handle" of one or more words)
5. Click the magnifying glass
6. You'll get a screen that includes a box with brief bio information about the matching member, with a "Find Content" button for you to click.
7. Fetch a fresh cup of coffee and begin browsing the accumulated wisdom graciously contributed by that member to the employee benefits community!

S Corp ESOP transferred shares for a number of years to profit sharing accounts within the ESOP to avoid a non-allocation year under 409(p).  The company revoked the S election early in 2019.  Can they transfer the profit sharing shares back to the ESOP? 

Assume appraised value would be used for the transfers.

Ran across a prospect that sponsors a Prem Only Plan.

Account says no 5500-SF needed.

Plan excludes employees who are part of Division C.  Employees of Divisions A & B are included.  Compensation for each division is tracked separately, though everything is on one W2.  Plans definition of comp is W2, no exclusions.

Several people do work for A or B as well as C.  Some do work for all three.

For profit sharing purposes, can/should we exclude the income from C?

Example:  He entered the plan in, say 2014, as an employee for Division A.  Jim makes $60,000 for 2018.  However, $20,000 was for work he did as an employee for Division C.

What is his compensation for PS purposes?  $60,000 or $40,000?

Plans must provide a notice of the availability of the Privacy Notice at least once every 3 years. Can this "notice of the Privacy Notice" be merely posted on the company's intranet/website?  Does it follow the same electronic disclosure requirements applicable to qualified plans?

Can someone please explain the benefit of adding someone who is clearly a fiduciary as a "Directed Trustee."  Our document allows an individual to be named as a directed trustee.  Shoudl we always be using it or is it a moot point for someone like a business owner or a non-owner CEO, etc. when they are clearly a fiduciary anyway?