I have a client whose SEP Plan was recently audited by the IRS resulting in corrective contributions to employees.  As part of the closing agreement, the IRS wants the client to adopt a prototype SEP plan document and also provide notice to employees of their benefits.  Anyone know where I can find a sample notice letter?  Just want to make sure I don't leave anything (important) out.  Thank you!

Need to file 5500s back to 2002 for a small plan.  Have a few questions.

Will all the filings appear on EFAST2 for public viewing?

If so, how should the Schedule P be handled since it requires a signature and will be attached as a PDF?  Should it be treated as an SB an only have the fiduciary's initials?

Participant A is age 77, so he has been taking annual RMDs for 7 years. In his first RMD year, he took out his RMD in December. Every year since then, we have advised taking his RMD in December and not any earlier to satisfy the "generally consistent" annual annuity distribution that he would be receiving from an insurance company if his annual annuity came from such as source.

Now, he is really pressing us to allow him to take his RMD earlier in the year. Can we make some sort of one-time adjustment to allow this? He would like to switch to taking his annual RMD on March 15th every year.

Let's say the plan failed ADP testing and a participant has both Roth and Traditional sources. If the plan document does not state the order in which the corrective distributions should be done, how would you process the corrective distributions? Would you process it proportionately from each source or would you start with Traditional source first and then do Roth source if the amount exceeds Traditional source.

Thank you. 

So we have and existing 401(k) plan that wants to add a SHNEC, this can not be done mid year?  I assume it needs to be started January 1 for a calendar plan year.

Is there a 30-day notice requirement for simply adding a new fund to a 401(k) lineup, not mapping any assets to it? 

We submitted anonymous VCP in 2017 when the fee was 10k but under the new procedure the fee is only 3.5k.  Is there any provision to apply the new fee schedule?  The VCP process is ongoing.  Thanks!

Employer has partial withdrawal from Central States followed 2 years later by a complete withdrawal.

In calculating liability under the partial withdrawal, Administrator included 2007 & 2008 in calculation. On Complete withdrawal 2 years later, actuary is still including 2007 & 2008 contribution & UVB in calculation. Shouldn't the "first 2 years" drop off when calculating the "Complete Withdrawal" ?

thanks for any insight or citations

Plan loan policy calls for a "level amortization" and repays made through payroll deduction.

Is the plan required to allow a paticipant to pay extra odd amounts (through payroll) if they choose?

As an example, weekly repays are $88.52 and the participant wants to increase that by $20 and pay $108.52 weekly.

PA is tracking the loans and not the investment vendor, which means the PA would have to keep track of the "extra" repays and where they apply, presumably principal only.

thoughts?

Participant under age 591/2 and Roth 401k started in 2016.  Wants to take a $13,000 distribution from her Roth 401k account at this time.  Total contributions to the Roth = 21,896.36 and there is currently an overall  loss on the Roth account of $998.15 - i.e. her balance is only $20,898.21.  How does her 1099-R get set up to account for the loss on the Roth money?  I don't see how anything is taxable to her on the $13,000 distribution since she has taken a loss on the account.  Is that correct?

What say all of you about terminating plans and the current restatement cycle? 

Assume the documents have amendments to bring them other wise up to date, just not restatements. I have a couple of different scenarios. Are document restatement required in any/all of the following circumstances. There has been some debate among our actuaries and senior folks. 

A. Plans that are terminated and completely paid out as of today, but the plan termination date was AFTER the restatement cycle started. 

B. Plans that are terminated and NOT completely paid out, the plan termination date was AFTER the restatement cycle started. 

C. Plans that are terminated and completely paid out as of today, the plan termination date was BEFORE the restatement cycle started, but final payouts occurred AFTER the restatement cycle started. 

D. Plans that terminated AFTER the restatement cycle started, but distributions will be complete BEFORE the restatement deadline. 

When was the termination amendment? Before or after the restatement cycle started?

When are distributions complete? During the restatement cycle or after the restatement deadline?

They have an employee who (it seems) has discretion as to when to be paid on a W2 and when to be paid on a 1099-Misc.  As we know, 1099 income is not allowed for plan purposes.  Thing is, he has been ‘deferring’ from his 1099 income throughout most of 2018 and continuing into 2019.  (This may have happened in 2017, also)  I believe that the 1099 ‘deferrals’ should be considered a Mistake of Fact and the funds should get sent back to the company.

In the past, we have only been considering his income and true deferrals from his W2.  Using only that compensation, he is definitely a NHCE.  However, if we consider his roughly $150k in 1099-MISC income, he is way over the threshold.

So, I’m not sure what to do.  

(A)    Send the 1099 deferrals back and leave it as it is.  
(B)    (A) + consider the 1099 income in my testing and make him an HCE (2017 test will probably fail now).
(C)    Consider both the 1099 income AND deferrals in my test.

Your thoughts are appreciated.

We have a client where we review their ADP/ACP tests and prepare the Form 5500.  The client determined that the ADP test failed and they refunded the approximately $1,500 back to one of the HCE's.  The problem is that the client did not perform the tests properly and the Plan did not fail the ADP test.  Thus, there should have been no refund.  

We now have a situation where deferral money was distributed to a highly compensated participant who was not eligible to receive a distribution.  I am clueless as to how to fix this.

Any thoughts out there....

Can a plan termination be undone by a simple sponsor resolution? If it's a db plan could it also be unfrozen in the

same resolution?

(1) how does one convert a 412(e) plan to a non fully insured plan? Can it be accomplished simply by not making premium payments?  (2) if a fully insured plan is frozen for a year can it be resumed or does it lose the level premium requirement by doing so? (3) what are the options for getting the life insurance out of the plan?

Husband and Wife each have their own 401(k). They are a controlled group do to minor child . In completing their Ezs, the participant count should be 2 since the other spouse is eligible to defer but I do not combine the assets since they are separate pools. Correct?

An active employee participating in a 403(b)(9) church plan wants to defer his unused vacation time to the Plan.

I know there is a provision (Rev. Rul. 2009-31) that allows for active employees to have their unused PTO contributed to a 401(k), but I did not find such a provision for 403(b)s. The only thing I could find in respect to unused PTO being contributed to a 403(b) is via a post-severance contribution (Pub. 4482).

Does anyone know if a 403(b) plan could allow for an active employee to contribute (either via deferral or arrangement with employer for a non-elective contribution) unused vacation and sick pay to the 403(b) Plan?

We had to reduce an owner's contribution because of the 30-day crediting rule.  The owner is self employed and wants the maximum contribution but will be limited to $41,000 ,including catch up. A refund of $10,000 in elective deferrals was necessary and following EPCRS Rev Proc 2008-50. (per plan doc).  ERISA book says these refunds of elective deferral are disregarded for 402(g) / ADP Test.  The plan is a Safe Harbor 3%. 

The total contribution of $41K was used for the cross test due to the limit.  Question - should elective deferrals be $18,500 or $10,500 in the cross-test??  I'm inclined to the later but corrective distributions are generally included for ABT.  If the former is used, I'm basically "making up" for the that amount that has will be refunded...doesn't seem correct.  This will have an effect on minimum gateway since we're trying to get to the $41k.  

A discussion in the Litigation message board that may also be of interest to readers of this QDRO message board.

https://benefitslink.com/boards/index.php?/topic/64088-alternate-payee-dies-before-qdro-does-his-estate-have-a-valid-recovery-claim/

Hi,

I would greatly appreciate insight on this matter. Client had a company "A" (since 09) and a DB PLAN for company A since 2012. In March 2019 he sold "A" --however, corporation is still in existence and its only asset is aprox 10,000 in cash. In April 2019 he set up a new corp "B" (set up a corp and purchased the assets of a business). Company B has new employees and does not do the same service as '"A" corp did.

1.  Is he allowed to continue the DB Plan of 'A" for company "B'? (so that he has prior service and benifits from "A" and salary average from "A")?

2. If yes, is the owner the only employee eligible to participate in the plan for 2019 (as he has a year of service from the prior company and is the ONLY employee that will have 1,000 hours for 2019). Thank you very much for any insight on this matter,