I have taken over a non-governmental contributory multiemployer DB plan in which employee contributions ceased many years ago but with respect to which approximately 200 separate accounts still exist.  The client has historically obtained a separate audit for these accounts.  Audit and investment fees associated with the separate accounts are paid out of the accounts and the trustees are concerned that these costs are getting too high.  The trustees would like to find a way to get rid of the separate accounts.  My questions are:

1.  Is a separate audit of the separate accounts legally required?

2. Am I correct that a contributory DB Plan is still a DB plan; accordingly, an in-service pre-normal retirement age distribution of a participant's separate account cannot be made available to such a participant because a DB Plan cannot distribute a participant's account before (1) the plan's termination, or (2) the participant's termination of employment or attainment of normal retirement age?

3. Assuming that the segregated accounts can't be paid to participants before their termination of employment or attainment of normal retirement age, can the DB Plan spin off the separate accounts into a new DC plan and then terminate the DC Plan and payout the accounts?

Thanks in advance for any help. 

It appears only current year compensation can be used in determining the contribution credit each year.

If that is the case, are we forbidden from general testing based on average compensation with a cash balance plan?

Thanks. 

A one-man company, inception date 12/1/2018, would like to start a 401k with an initial short plan year, 12/1/2018 to 12/31/2018. 

If the Limitation Year is defined as the calendar year, is it permitted to not prorate 415 and comp, even though the company has only been in existence for 1 month?

Thank you very much.

Sponsor deducted final deferrals from the wrong payroll file, and thus many participants who had increased their deferral elections were missed. The IRS EPCRS guidance states if corrected within 3 months no QNEC is due for the deferrals, a QNEC for the missed match if any must be made and there is a notice. However this is not their concern, they want to know how to correct for the missed deferral deduction opportunity? Is there a W2 or accounting method they could use to fix this like offset some of their pay from the 1st payroll in 2019 so they can make 2018 deferrals? I have not had this issue come up before so any thoughts would be appreciated.

ERISA Section 502(c)(1)(B) allows a court to impose a civil penalty upon a plan administrator if it fails to furnish documents to a participant or beneficiary with 30 days of receiving a written request for such documents absent reasons beyond its control. The dollar amount was bumped up to $110 by 1990 legislation. 2015 legislation imposed a requirement for indexing the dollar amounts for nearly all federal statutory penalty amounts. However, I have noticed that on the four occasions when the DOL has published penalty adjustments, Section 502(c)(1)(B) was omitted from its list. Does anyone know why this is happening?

Hello,

If an employee goes over the 402g limit for the year and the correction is made in the current year,  what would the 1099r look like.  

For example.  John contributes $19500 for 2018.  We correct this in December 2018 but because of loses the refund is only $900(1000(amount over) - 100(loses)

When he gets his 1099r in Jan 2019 will it be an issue if it says $900.   When doing his taxes he will enter $19500 for his 401k contribution and enter $900 for the 1099r.  Will the IRS still he went over $100?

Employer wants to implement a student loan repayment benefit, often erroneously referred to as a "match" but we know is an employer non-elective contribution.

Question is how much of the "program" needs to be addressed in the plan document vs. a much less formal payroll practice or policy.

It would seem that if the plan document already provides (or is amended to provide) that each participant is in a separate non-elective allocation group, and the eligibility and vesting provisions conform to the employer's intent that there would be no requirement to have anything further in the plan document.

When an employer determines in it's sole discretion how much non-elective contribution to allocate to each participant there's no requirement that the basis for the allocation be incorporated in the plan document. If an employer wants to reward certain employee behaviors by non-elective contributions ("you'll get $1,000 if you increase sales by 5%" or "you'll get $1,000 if you have no unexcused absences this year") those policies can be communicated informally and do not require plan amendments so it would seem that a student loan repayment benefit could likewise be crafted outside of the plan document.

Any disagreement?

CPA has come to us at the last minute (of course) with a self-employed consultant who wants to set up a plan.  CPA is telling me that he does not have a business, he is being paid directly and to set up the plan under his SSNO.  I told her we would not set up the plan with a SSNO.  Now CPA is asking me does he have to create an LLC just to sponsor a plan?  Any suggestions?  Thanks!!

As a participant in an ESOP, I have over 12% ownership in company stock in my account. I am 72 years old. Am I considered an owner for the purpose of RMD under the 5% RMD?

Taking over a plamn where NRA is just 55.  Are there any special rules to be aware of?  Is there any way to use an older age for testing?

I've read there are complications with using SSRA in place of NRA.  Any ideas? 

ALSO Does anyone have an extended chart of dispiary factots?  The one I am using (which is from the regs) only spans 60 to 70.  I think the regs say you can use any reasonable method to extend up or down.

Does anyone prepare Form 945s and complete the "paid preparer use only" section of the form? If you do, do you have a PTIN? We let our PTINs lapse because they are not required for Form 5500 preparers. But the Paid Preparer section asks for the PTIN.

Anyone have a decent forfeiture transactional report that they might be willing to share?

Client maintains standalone 401k with match.  Had he give appropriate Not ice of Safe Harbor by Nov 30th, would it have been possible to amend the plan eff 1/1/19 to a safe harbor match?  

There are many employees that are not contributing, causing both ADP and ACP to fail.

This is a standalone plan and employer has not used the PS potion of the plan and does not plan to.

What does he do with the other already in the plan, obviously count them as participants and not match, what about top heavy contribution?

Do we have until the end of the 410b6c grace period to align the HCE definition?

A 401(k) Plan permits rollovers for participants only. A recordkeeper permitted an employee to roll over funds before he met the Plan's eligibility requirements. They did not check with TPA. We found out about the rollover because the employee tried to obtain a loan from the Plan - which was denied.

When we requested that the Recordkeeper disgorge the funds, they never acted on the request. Because the Plan has a 3 month waiting period, the employee is now eligible. If the funds stay in the Plan (with Trustee direction), should we do an Amendment to permit this employee early participation for rollover purposes? If not, what are the ramifications. This is an audited Plan.

A plan has a fraud prevention procedure that delays issuing a participant loan request by a couple of days after the request is made. A participant's vested balance is $10,000 on the day they request a $5,000 loan. The market drops during those 2 days so their vested balance is $8,600 when the loan is issued.

Can the plan issue a loan for $5,000 or must they redo the amort schedules etc. and only issue a loan for $4,300?

Hello.

We have a client that just informed us that they would like to convert their FYE 11/30 safe harbor plan to a FYE 12/31 safe harbor plan, so we would basically have a 12 month SH plan that ran from 12/1/17 to 11/30/18, then a 1 month SH plan (12/1/18 to 12/31/18)  followed by a 12 month SH plan (1/1/19-12/31/19).  So I do believe that we meet the requirements to make this change and keep the SH status intact.  BUT...

My issue is the timing of the amendment, since the short plan year has already started.  The EOB indicates that the amendment should be signed BEFORE the short plan year began, which has not.  Has anyone else ran into this issue?  Or has there be some further guidance that the amendment can be signed after the short plan year begins, but before ends.   Also a concern, is that a new SH notice should have been provided by 12/1/18 for the 2019 PY.

FIY: the plan provides a safe harbor non-elective contribution of 3%.

A dental practice is owned by two dentists' individual corporations.  In April 2018, one of the dentists sells his part of the practice to another dentist, whose individual corporation now becomes the new partner.

The partnership has a 401(k) plan.

The new dentist's corporation also has a 401(k) plan.

If the new dentist's corporation does not adopt the partnership's plan, can the new dentist operate his existing plan separately under the coverage transition rules?  Or does the formation of the new partnership and ASG negate the coverage transition rules?

If the coverage transition rules do apply, does the coverage transition period end if the new dentist's corporation adopts the partnernship's plan (that is, before the end of the allowed transition period).

Thanks very much.

For you and your family and friends. Drive safely!!!

Can someone clarify if the partner/member contribution for the deferral + match cannot > 402g limit?