We represent a church that is exempt from ERISA that filed a Form 5500SF for a funded health plan.  They should not have filed and now we are trying to figure out how to notify the DOL.  If we simply stop filing, the DOL will probably contact us thinking that we should continue filing.  We were thinking about filing an amended return and listing Code 4R on Line 8b but the funding never really changed.  Another option would be to file an amended return and mark it final but then you have to say there were no participants and no assets which really isn't the case either.  Bottom line is how do we get off this roller coaster?

Regarding Code Section 409(p) “prohibited allocations.” An S Corp ESOP provides that HCEs who are disqualified persons for 409(p) purposes (or reasonably likely to become disqualified persons) are not eligible for the annual ESOP allocations. This helps the Plan with 409(p) compliance. Can the Plan Sponsor give an HCE affected by this provision a taxable bonus, in an amount equal to what would have been the ESOP allocation, without any effect on the 409(p) test? The Plan Sponsor could not provide for the allocation under a different qualified plan (it would be treated as an allocation under the ESOP, affecting the 409(p) test), but if it is a taxable bonus—no tax-deferral element at all—thinking it might have no impact on the 409(p) test. Thoughts?

I have a client that owns 1) 100% of a Schedule C construction company 2) 50%/ 50% with another partner of a company that runs the management functions of the construction company and 3) 50%/ 50% with the SAME other partner of an unrelated independent living center.

The owner wants to set up a deferral-only 401k plan covering the 1) Sch C Construction company and the 2) management company (as an affiliated service group).

Does the addition of the management company as an affiliated service group extend the control group requirements to it as well? In other words, by including the management group, are we now required to include the 3) independent living center because it is a control group with the company that was brought in as an affiliated service group?

I'm running up against an issue that I've never had before.  The financial institution requires the Plan Trustee to sign off on any distribution.  We have a terminated participant who has requested a distribution of his account (which includes 401(k) deferrals) and it appears that the Trustee is refusing to authorize it.  I'm not sure if there's a reason behind it, bit what are the ramifications if the Trustee refuses to ultimately approve it?

Thanks in advance!

In a defined benefit plan, we located missing participants and validated current address.  They were non responsive to begin their benefit so we defaulted their election and began payment.  Two participants, who are 70.5, have not cashed their checks.  Do I stop payment and not reissue so that a 1099 is not generated or should we continue making payments knowing the checks aren't being cashed? 

Our client terminated their defined benefit plan.  There are excess assets that they want to roll into their 401k plan and allocate, ratably over the next seven years, as a profit sharing contribution.  I  don't see any language in my Datair document that covers this kind of "suspense" account, or whatever I should call it.  Does anyone else know of a document provider whose  plan has language that supports this qualified  replacement plan?

A corp. made numerous contributions to their DB Plan during the months of January thru September 2018. These contributions can either be used for the 2017 year-(of course must be within the min/max range) (as made by extended due date of 2017 return -sept. 15, 2018) or for the 2018 year. Question: Can you use contributions made in January, February, and June 2018 for the 2017 tax year and then use contributions that were made in March, April and May 2018 FOR THE 2018 tax year, or must you go in order (ie contributions made from Jan thru April 2018 for the 2017 tax year and then contr. made from May 2018 thru Sep 2018 for the 2018 tax year). Thank you.

Plan sponsor has not made their safe harbor non-elective contribution deposit for the 2017 Plan Year. It is my understanding that they have until 12/31/18 to make the deposit and keep the safe harbor status for 2017. Is that correct?  (I’m not sure if they deducted it on their 2017 tax return, but it would not have been deductible since it was not made by their 2017 tax filing deadline.)  

Question 1:  Is it deductible for 2018?

Question 2:  Do we have to apply lost earnings?

Would anyone happen to have a calendar of important plan due dates for a 6/30 fiscal plan year end?  It's easy to find material to give to a client on due dates for a calendar year end plan but I am not finding off year end information without manually preparing myself.  Looking for anything someone might have before I completely reinvent the wheel.   Thank you in advance.

An employer sponsored a 401k plan long ago - pre 2010.  They terminated the plan and everyone was distributed.  The employer then started a Simple IRA and has been using that ever since.  They have discontinued the Simple IRA and want to start a 401k again for 2019 (traditional 401k, non safe harbor).  The new plan would be treated a NOT Top-Heavy because all the distributions were more than 5 years ago.  The owner wants to rollover money from an IRA that contains the original distribution from the prior QUALIFIED plan (not the Simple IRA money - I don't think there is any question that should be excluded from the TH calc).  Would doing this make the plan TH immediately (assuming his account is more than 60% of the EOY account balances)?  It seems it would be a related rollover and by putting it back into a plan sponsored by the same employer, it would have to be counted in the TH calculation.  Does this sound correct?  Am I missing something important here?  

Hi there,

I have a small business LLC S-Corp. I have a one person defined benefit in place for the last 5 years. Funded till 2017. In 2018, I am unable to fund the required amount owing to significant personal losses and am considering closing the LLC. I was told by my retirement plan folks that there would be an excise penalty and would still have to fund 2018. That does not seem right. What is the penalty and the process of closure? Thank you in advance!

Forgive my ignorance here, as I don't deal with these issues often.

Can a small employer (fewer than 50 employees) reimburse a portion of an employee's out of pocket expense without running afoul of ACA and/or tax law?

Employer currently pays 80% of medical insurance premiums.  Employee has $1,500 deductible with $3,500 out of pocket max.  Employer has been covering the second half of that out of pocket max (dollars 1,751 through 3,500) in the form of a check to the employee. 

Any guidance is appreciated.

A 403(b) has been sponsored by an ineligible employer for many years. Had it been sponsored by an eligible employer, 5500's would have been required due to employer involvement. However, no audits were performed and no 5500's filed since the inception of the plan. 

We will proceed with the VCP procedure outlined in Rev Proc 2018-52. Under Section .03 it states:

(3) A plan that is corrected through VCP or Audit CAP is treated as subject to all of the requirements and provisions of §§ 401(a) for a Qualified Plan, 403(b) for a 403(b) Plan, 408(k) for a SEP, and 408(p) for a SIMPLE IRA Plan (including Code provisions relating to rollovers). Therefore, the Plan Sponsor must also correct all other failures in accordance with this revenue procedure. 

Does this mean delinquent 5500's should be filed even though the employer was ineligible to sponsor a 403(b)?

Thank you

This hasn;t happened, thank goodness, but the question being posed by a board member is, if a participant were to embezzle money, or was terminated for some other crime against the employer, is there a way to forfeit their balance?

My assumption is that nothing the participant can do will eliminate the liability to the participant.  Yes, I am aware of the fact that this is doable in a 457f plan which is still subject to a substantial risk of forfeiture.  I assume there is no possibility of this in a 457b.

Let me know what you think!

Husband and wife jointly own Company A.  Company A's employees are being moved to a PEO, and will be participating the PEO plan.  I'm assuming the existing Company A plan is being merged into the PEO plan.

Husband and wife jointly also jointly own Company B.  They will be receiving compensation from Company B.

Does anyone have any experience that they could share with the testing involved if Company B sponsors a plan that would cover just the husband and wife? 

I understand the combined testing that would be involved if Company A had its own plan and B had its own plan, but I'm not sure how it works when Company A is part of a PEO plan.

Does the PEO use the Company B contributions in its testing of Company A?  Seems more likely that the PEO wouldn't even ask about any controlled group members.

Thanks.

Hello,

Any advice for the following situation?

Our entity is a pension distribution group, we had a member with an IRS levy that we just recently learned had passed away (late reported death).  Long story short - we paid the IRS for 8 months of levy payments that shouldn't have happened!  About 10k was overpaid.

Any shot of getting this back from the IRS? 

Crying in my great Carlsburg Octoberfest Beer.....thanks Brian!

Good afternoon to all:

From a colleague in my office:

"Requesting advice regarding completion of Schedules A and C for large plans using a John Hancock style (insurance) product. We believe that Commissions to Insurance Agents and TPA Fees deducted from plan assets (Distribution and loan fees) are reported on Schedule A. Revenue Sharing (Forum Compensation) could be reported on the A or C and if reported on the A then it would be left off the C. Any thoughts on this? "

Thank you as always for any advice.

I owe child support arrears due to an oversight (by both parties) not discovered for years. My Ex has been incredibly aggressive in her attempt to collect the entire amount in a lump sum. I asked for relief from the court and I have an order stating the the arrears shall be paid off at a specific monthly rate. I have been paying that amount on time every month for a few years.

I recently discovered my Ex filed an ex parte application for a child support arrears QDRO and she is trying to get the money from my 401k. Apparently QDROs are hard and her first attempt was rejected (common occurrence it seems), well the legal team used by my employer was nice enough to provide her a template she could use to met the required format. I don't think the QDRO has been signed by the judge yet, but I expect it will be soon. 

Is anyone familiar with a process I could use to prevent the QDRO from being executed? I'm thinking something like a motion to recall the QDRO or maybe a restraining order to prevent it from going through.

Reasons I don't think the QDRO should be acted on: 1) A payment arrangement has already been ordered by the court and I have adhered to that order, 2) By the time the QDRO is approved and executed the amount I actually owe will be several thousand dollars less than what is requested by the QDRO, 3) The taxes and fees I will incur are unreasonable given I have been paying according the court order on time every month.

We are using Relius software.

Please help me how to pull from Relius (or direct me where/how to find it)the APR at age 65 if the actuarial assumptions are: Pre-retirement 7% interest; Post-retirement 5% interest, and the 1994 Group Annuity Mortality without setback.

Should an investment committee have a special process for adding a target-date fund to a 401k lineup, and possibly using it as the QDIA? A client is being told that it should take the extra step of having its investment committee interview the managers of the target-date funds under consideration. I haven't heard this before. Any thoughts appreciated. Thanks.