This may be a silly question but I have someone adamant that a 401(k) plan "has" to have a Plan Year from 1/1-12/31.  I tried to find it in the regulations, but can't seem to find it.  

Any help?

Thanks again everyone!

At the end of the plan year, a sponsor must file a Form 5500-EZ for their plan when the assets of the plan are greater than $250,000.  For calculation purposes, I’d like to know what’s included in assets.

Assume… at the end of the plan year… a Individual 401(k) has a balance of $240,000 and an outstanding loan of $30,000.  For purposes of Form 5500-EZ, are the total assets $240,000… or are the total assets $270,000?  Thanks for your help.

I have a current small client (approx 15 employees), with a 401(k) Plan with elective deferrals and is 3% Safe Harbor Non-elective Maybe.  The client is deciding on whether to amend to Safe Harbor for the 2018 plan year, so that we can send the required 30 day notices ASAP.  

Question - the plan currently applies the SHNEC to ALL participants, but the client is considering Excluding all HCE's from the allocation in the future, which consists of about 4 employees besides himself.  Can he make this part of the 2018 SH amendment and notify participants now that they the HCE's will not receive a SHNEC for 2018? Or must he wait and amend the plan for 2019 to Exclude HCE's from the SHNEC?  

Thank you! 

At the end of the plan year, a sponsor must file a Form 5500-EZ for each of their one-participant plans when the total combined assets of all one-participant plans the sponsor maintains are greater than $250,000.  I’m pretty sure I know that the answer to the following question is “No,” but I’d like to ask it anyway just to be sure.  For purposes of calculating the total combined assets, is a SEP IRA included in the calculation?

Assume this Individual 401(k) is the only one-participant plan maintained by the sponsor.  If the total assets in the Individual 401(k) exceed $250,000 around the halfway mark (May) of the plan year (Jan-Dec), and then drop below $250,000 at the end of the plan year (Dec 31), does a 5500-EZ have to be filed?  Thanks for your help.

Has anyone dealt with correcting a situation in which a governmental employer impermissibly adopted a 401(k) plan, in spite of not being eligible for the grandfather?  It appears that this situation is not one contemplated by EPCRS, inasmuch as the plan as a whole is qualified, but the purported elective deferrals would not be a cash or deferred arrangement (and thus would be after-tax).

The client would like to follow the procedure for an employer that adopts a 403(b) plan, even though it is not eligible to do so—i.e., stop all contributions to the plan, pay the VCP fee, and make distributions only when otherwise permitted to do so.  Has anyone gone to the IRS to negotiate a VCP-like solution to such an issue—one that would protect the pretax status of the employees’ contributions?  What was the outcome?

Hi,

The current prime rate appears to be 5.25 (WSJ). What are plans using currently as the interest rate for plan loans?

Thank you.

Does anyone have a condensed version of the Summary of Accounts Detail that shows shares and sources, that may be a little prettier than what Relius has that you'd be willing to share?

I have started working on a 403b plan that has a compensation exclusion of "coach's compensation".  Provision does not specify that it applies only to ER contributions.  Some people are only coaches so they have plan compensation of $0 effectively excluding them from the salary deferral part of the plan (it seems to me.)

Does this situation create a problem with the universal availability requirement for the 403b benefit?

Thank you

We have always been a TPA firm where each plan administrator handles everything and is expected to be fairly knowledgeable about most aspects of retirement plan administration, plan design, etc.  At some point, we created a role for someone to handle all distributions and loans, which has now become two people due to sheer volume.  We have continued to grow and hire administrators, some with TPA experience and some trained from scratch, both types of hires having various degrees of success and problems. 

We are now considering a reorganization where 2-3 of the most senior administrators lead a team, which would include junior administrators (we would have a different name for the position).  Not sure if this would be a situation where the team leader handles all client communication and the jr. admins do the calculations, testing, valuations, Forms 5500, etc. OR if the jr. admins would handle a book of business separately with the team lead reviewing all work and also getting involved when there are larger issues, such as acquisitions, controlled group determinations, significant plan errors, etc.

This is stemming from a few administrators simply not being able to organize and prioritize, while others may be very good at the technical aspects of calculations and testing, but simply are not great communicators.

Do any of you lovely people have experience with both types of set-up, i.e. administrators each handle their own work or they "report" to a manager who is client facing, while they do the back-up annual administration work?  If any of you has experienced both models, I would love to hear your pros and cons of each and struggles making a switch.

Thanks!

 

I've gotten conflicting answers to this, so I wanted to get some clarity.  Does the IRS allow for in-service distributions of 401(k) contributions under age 59.5?  Specifically, the person is trying to roll the money into an IRA.

The current Plan Document does not allow it, but the employer is willing to amend it if allowed.

If someone direct me to exactly where in the code it says it, I'd appreciate it!  

We have a key employee (5% owner) whose wife passed in late 2014.  He took distribution of her account balance in 2015 and rolled it over within the same plan.  Would the distribution from her account to his be considered a "related" rollover for calculating top-heavy status as the $ remains in the plan?  If yes, would it drop off after 1 year?

If an Employer wants to pay a former employee's health premiums, first COBRA, and then after COBRA ends, whatever it costs for the employee to get health coverage, how are payments of those premiums treated for tax purposes? I know premiums paid for COBRA are nontaxable if the Company pays directly or pays to former employee upon proof of payment to insurance company, but if the Company continues to pay the former employee's premiums after COBRA ended, how is that treated?  Is that income, subject to a 1099 or something like that? 

From the form 5500 instructions the IRS writes this:

A “one-participant plan” is:

(1)     a pension benefit plan that covers only an individual or an individual and his or her spouse who wholly own a trade or business, whether incorporated or unincorporated;

(2)      or a pension benefit plan for a partnership that covers only the partners or the partners and the partners’ spouses. Thus, a “one-participant plan” can cover more than one participant.

 

On the other hand, merely covering only one participant does not make you eligible to file as a “one-participant plan” unless you are one of the types of plans described above. 

A CPA is saying that his client who has 1 employee who works 10 hours a week and does not meet the 1,000 hour requirement would still be eligible to file a form 5500EZ.  Based on the above that would not be the case.

Simple answer.. EZ eligible or not?

Hi,

New potential client wants to start a 401k plan. Client is a day care/ pre-school located within a church. The church looks upon the day care as a "ministry" of the church. They use the same EIN as the church but their fiscal year is different. Is there anything special that needs to be done for the set up? Shouldn't they have their EIN?

Thank you!

Hello, this is my first post and my question I would like to pose is this:

Currently in our area, we only have 2 firms that we are able to choose from to provide a 401k. One is a A) SEC-registered firm that is not as established, and the other is B), a non-SEC registered firm (it used to be but decided not to) and have over 100 million in assets.  

I feel very uncomfortable going with the non-SEC registered firm because the SEC website shows they are nonexempt. (They claim they are not required to be since they are trust company that falls under the definition of bank.)  However the other decision makers don't see it as a significant issue. What am I missing here? It seems clear cut at least on this stance but they are willing to take the liability.  

401k plan excludes DOP comp only.  Can/should comp payments to 409a plan be included as compensation for 401k plan?

I know there is a correction method for when an employer maintains a SIMPLE Plan during a year or years when it becomes ineligible to do so.

Has anyone ever encountered a situation when an employer was ineligible to adopt a SIMPLE Plan from the outset but did so anyway and now, 10 years later, realizes there is a problem?

Any suggestions?

 

 

I am looking for a book that has sample forms, letters, amendments ect in it.

I knew of one many years back but can't find the name.  Does anyone know of a good one?

On a side note does anyone have a sample spinoff amendment they would be willing to share?

We are a small TPA firm located in Eastern Suffolk County, NY looking to work with another small TPA firm.  We are open to merging with or purchasing another small TPA firm on Long Island.  We would also consider other options, if presented.

If anyone is interested in exploring growth opportunities with us, please email TPAexplorer@gmail.com.