Single-member LLC dentist sponsored a SIMPLE IRA for about 8 years.  He sold his practice mid-2018 and all employees now work for the new dentist's company.   What happens to the SIMPLE IRA accounts?  Should notices be provided to the employees or to the custodian of the SIMPLE IRA accounts? Could the new dentist assume sponsorship of the SIMPLE IRA or would he need to start a new plan if he wants one?

Thanks!

We have been hired to file "unfiled/past" 5500EZ forms but we don't know which returns have been filed since 1996. We would like to find a way to get copies of prior EZ returns so we know which ones haven't been filed. We have called the IRS and EBSA without much help. Any ideas?

Background: A Canadian citizen, living in Canada, has elected to start an annuity from his US based 403(b). He has requested that the monthly payment be sent to his bank account in the US, rather than be mailed to his home address in Canada.

Questions:

1) Can the 403(b) plan treat the payments as though they were sent to a US person because the bank is located in the US and consequently apply withholding as though he is a US person?

2) If the payments were being sent to a residential address in the US for the same individual, does that change how we apply withholding?

3) If the answer to one of the above is that we can apply withholding as though he is a US person (married w/3 allowances), do the distributions get reported on a 1099-R or a 1042-S?

Thanks for your help!

Does anyone happen to have an excel spreadsheet template that would calculate match true up on a bi-weekly payroll basis, instead of an annual basis?  Match is .50 for every dollar match up to 8% and payroll is bi-weekly.

Say an employer has a self-insured group health plan. The same plan coverage, waiting period, benefits, etc. are offered to all employees.

If HCIs paid, say, 10% of the cost of coverage and non-HCIs paid 50%, we would violate 105(h). 

If the premium payments by employees remained the same (10% and 50%), but the employer imputed taxable income to the HCIs equal to 40% of the premium, does this solve the 105(h) problem? I know the typical solution in post-termination or COBRA subsidization is to make the premium payment or subsidy taxable. Does this same solution carry over directly to the continuing employment scenario?

Alternatively, the HCIs' base salary could be increased, but the employer wants to avoid having to increase base salaries for optics and other reasons. 

Appreciate any input.

Hi, 

Company has DB and DC (MP) Plans. They planned on making a db and DC contribution for the year ended 12/31/17. Inadvertently they deposited the DC contribution into the DB account (db plus dc contribution all went into db account, and was below DB Max). Can this be self corrected by transfering the money into the dc account? If yes, what if the transfer is made today, October 18th, as this is after 9/15?. Thank you

We are reviewing a 403b plan that has a service based employer base contribution.  The plan year ending 6/30/18 fails NDT due to the HCEs basically maxing out on their 403b deferrals and the NHCEs not deferring very much.  So the NDT failure is with the average benefits test.  If it's possible, the least costly solution would be returning a portion of the HCE 403b deferrals.  Is that possible and more importantly, within the rules??  Thanks.

If an employer uses the arrears method for collecting an employee's obligations for H&W benefits while they are on unpaid LOA and the employer elects to forgive the balance in lieu of collecting the balance is there any way to do that and avoid having to impute income to the employee? If the employee owes a balance and instead of collecting the balance the employer would like to forgive the amount do we have to include the forgiven amount as imputed income on the employee's W-2? Thanks.

Hello.  We have a new client - Client A - that was a participating employer in a MEP who has decided to leave the MEP and establish their own plan.  We have assigned Plan 001 to the client's new plan as it is the first plan being sponsored by client A.  A colleague is questioning why we are using 001 and not 002 for the plan.  Is our reasoning correct on the plan number?

Good morning to all, 

We have a takeover case in which we want to be sure we correctly identify the Key employees.  We are not sure because we do not know anything about trusts.  I know the following is convoluted but I am not making this stuff up!

The company was started by two brothers, who we will call Bill and Sam. Bill is the president of the company,  and Sam has passed away.  The ownership of the shares of the company are as follows:

24.7% belongs to a Q-TIP trust for the wife of Sam who is not an employee.  We aren't worried about this.

41.1% belongs to Bill.  That's a no-brainer.  He's an owner and President of the company.  Key and HCE.

Bill's 3 kids are on the payroll.  One of them owns 0.8% of the stock outright.  Another 15.9% of the stock is in a trust for Bill's 3 kids, who are treated equally under the trust.  To our knowledge, the trust and the percentages are irrelevant here.  The fact that the kids are on the payroll and their father owns 41.1% of the stock is sufficient to make all of them Keys and HCEs.

Now comes the part we are not sure about.

Sam, remember, is deceased. Sam's 4 kids are on the payroll too.  One of Sam's kids owns 1.6% of the company outright.  Then, as in the case of Bill's kids, 15.9% of the stock of the company is in a trust for these 4 kids and they share equally in it.  So one son has his own 1.6% that he owns outright plus 3.98% that he indirectly owns through the trust for a total of 5.58% of the stock being for his benefit.  His 3 siblings just have the 3.98% each that they own indirectly through the trust.

Are Sam's kids Key and HCE or not?  We don't know what impact the trust has on making this determination.  Our suspicion is that maybe the son who has the total of 5.58% is a Key and maybe the siblings who only have 3.98% are not, because they have less than 5%?  We'd much rather hear what the experts have to say than just go on our suspicions.

None of these children, neither Bill's nor Sam's, has a sufficiently high salary to be considered an HCE just on that basis.  None is an officer of the company with a sufficiently high salary to be considered a Key just on that basis.  It's all about the stock.

Your advice will be greatly appreciated.

I'm looking at a presentation from an actuarial firm that suggests a 12/31/18 FYE taxpayer set up a CB plan with a 11/30/18 plan year end.  The contribution for the 11/30/18 plan year end can be deducted on the 2018 tax return as long as it's made by extended due date.  Nothing new there.  The suggestion is to fund the plan year beginning 12/1/18 before 12/31/18 so that amount could also be deducted...giving two years deduction in 2018.  Of course, all later years would be "normal"  Any thoughts/comments on that?

The actuarial firm also promotes what I think is a very aggressive 401(h) plan so I'm a bit leery of anything they show.

Thanks,

Just discovered an employee with two 401K loans had paid off first loan a year ago. We received no notice of payment and employee did not notice it on loan history website. Twenty-nine overpayments were applied to the employees second loan without authorization from employee or notice. This is the second time the company we hired to manage the 401K has done this with an employee in two years. Is that legal? Employee would have preferred to stop making TWO payments when first  loan ended and continued on amortization schedule for the remaining loan. 

Seems also to be a breach of fiduciary duty as well as illegal. 

Good afternoon to all,

We have virtually no experience with MEPs.  We have a client who owns two separate businesses and maintains a 401(k) plan for each business.  One has well under 100 employees and one is dangerously close to needing an independent audit.

There is a new investment advisor to the plans and she is wanting to create a MEP out of the two plans, claiming that there will be lower fees from the recordkeeper if they become a MEP.

My question is this:  Is this potential new MEP considered one plan with one 5500 to file, and will it now be thrust into the category where it needs an independent audit because it will have over 100 participants with the two companies combined?

Your advice is greatly appreciated.

Under current safe harbor hardship rules prior to 2019, there is the requirement that a participant take a loan if available under the plan before a hardship distribution can be approved. However, I believe there is a stipulation that if the loan will create an additional hardship the plan can waive the loan requirement. Does anyone have any details on this? How would a recordkeeper apply this exception other than relying on employee certification?

Thanks!

I have a plan I want to terminate 12-31-18 and I want to freeze accruals 11-15.  I am submitting to the IRS but the plan is not covered by the PBGC.

I have a 204h notice prepared and set to go out 10-31.

Is there a NOIT when the plan is not covered by the PBGC?  Or another notification to the participants that the plan is terminating?  That should be issued 60-90 days in advance?

I know I have to do a notice to interested parties 10 to 24 days prior to my IRS submission.

Can I submit my plan termination paperwork to the IRS before the plan termination date?  

Our ESOP plan document and the federal guidelines on payment to an alternate payee are the same.  We received a DRO which became a QDRO.

Payment to the alternate payee per federal law in this particular QDRO will be in 5 years.  We have in the past QDROs segregated alternate payee's funds to a third party and paid funds to the alternate payee per the QDRO federal rules.  We believe federal law allows for early payment if we choose..  We do not necessary want to set a precedent and allow alternate payee to access funds early.  We want to follow our past practice of following federal law on payment to an alternate payee.  In this case we believe the alternate payee could use the funds early.  If we decide to pay the alternate payee early which federal law allows, can we: (1). negotiate a 'discount' on the funds the alternate payee will receive;  (2).  does  this set precedent for a future QDROs

Thanks

We have a sponsor and additional adopting employer who are acquiring the assets and employees of numerous companies, who want to credit prior service.  Is it permissible to have some sort of catchall language that credits prior service with all companies that will be purchased instead of amending the plan each time and listing out all individual companies?

The ERISA books didn't seem to address the situation and the FT William document sections says list each company.  Just asking because I think I've seen Relius documents in the past have such a catchall provision.

Thanks in advance. 

Any comments on how many Plan Years you would carry a receivable Matching contribution (whether or not discretionary)?

What about a Money Purchase contribution?

Client has been advised to discuss the deduction issue with their CPA and about disqualification.

501(c) maintains an ERISA 403(b) Plan ( deferral and employer contribution). they are considering a move to a PEO.

1. The PEO sponsors a 401(k) Plan

2. The PEO recommends terminating/freezing  the 403(b) and adopting the 401(k)

Nothing prevents the employer from maintaining  their 403(b) correct? The employer is not required to adopt the PEO's plan, correct?

Thoughts??

Thanks