I have a 406(b)(2) transaction (payment of plan expenses out of the wrong plan).  Instructions for filing the VFCP indicate that you can be exempt from the excise tax if you fall under the PTE 2002-51, which we don't (2002-51 says exemption applies for payment of settlor expenses; our expenses are administrative non-settlor expenses).  We will file the 5500 Schedule G.  Do we need to file the 5330 and are we subject to excise tax under 4975? 4975 does not list a provision parallel to 406(b)(2) as a prohibited transaction subject to the excise tax.  

Is it possible to file the VFCP and report the transaction on the 5500 but not be subject to the excise tax and not have to file the 5330?  Note instructions for the 5330 under prohibited transactions do not list the transaction listed under 406(b)(2).

Any help appreciated.  Thanks.  

Client owns 100% of a construction business (company A) which currently has a 401(k) Plan.  The client just purchased a 50% interest in another construction business (company B).  The companies work together in both referring work and the completion of jobs but are not exclusive and provide services separately. 

The owner of company A would like to have company B join his plan.  I can't see this falling under an ASG or a controlled group.  Is there any issue with company B becoming an adopting employer of company A's Plan?

Thanks  for your input!

Non profit #1 sets up non profit #2 and runs payroll for them. #1 lets a #2-ee into #1's plan. I see provisions in EPCRs regarding how to fix letting employees in early, but this doesn't seem to fit that. She seems ineligible to me, though she's on the payroll...

Any thoughts? 

We are setting up an early retirement window in our pension (DB) plan -- retire within a specified time an you get two additional years credited service and two additional years age.

Our actuaries are wondering if it would make sense to add a statement in the early retirement window amendment that the early retirement window enhancements are subject to meeting non discrimination testing requirements. By doing this, they think it gets out of paying the benefits out of the plan if the discrimination test is failed or by giving non HCE’s additional benefits in the plan to allow discrimination testing to be met.

This seems unnecessary to me -- wouldn't both of those things be options if we fail nondiscrimination testing anyway?  Why do we need to include it in the amendment?

I have a CPA who is telling me he wants a "sophisticated" plan design option for a doctor who is an employee of a practice and also has his own business on the side with self-employment income.  The side business has a net loss, so I told him there is no income to take a deduction on for the SEP, therefore no way to fund a SEP.  The CPA thinks he can use some of the doctor's W2 income to fund a SEP contribution (?)  This is not permissible, right?  I am just questioning it because the person asking about this is a CPA so...

Plan excludes Taxable fringe benefits and bonus from Comp.  Problem is, I don't have them segregated from the client.  Client has a straight 5% profit sharing contribution. I can probably get away with rate group testing using the total comp, but can I try and pass the 414s testing, by dividing eligible comp by total comp (including taxable fringe?).

My denominator is a safe harbor 415 definition of  comp so I suppose so.  Agree?

Good evening

My wife is 55 and is resigning from the State of Maryland after 34 years of service.  She has excepted a job with a contractor for the State of Maryland that pays her much more and she will be doing what she love doing DLP Analyst investigator. How long can she leave her 457 Retirement plan with the State of Maryland instead of taking the distribution or transferring it to another qualified employer Plan. It is rumored that her contractor position will become a permanent State Gov position and she then will return back to Government service with same 457 Deferred Compensation Plan. Thanks in advance

Doctor w/own practice (no control group or ASG issue) uses PEO for all employees.

Doctor has own solo 401(k) Plan.

Doctor has not adopted the multiple employer plan for the employees from the PEO working for him so it appears they are not covered under any plan.

I'm thinking the ee's must be covered under Dr.'s plan, but not sure?

Is there a limit (with the exception of the 50,000 and or 1/2 the vested value)   that  should be followed regarding  the number of times a participant can refinance a loan?

For a 401k plan that begins  10/1/2017 and ends 9/30/2018 - are they limited to $54,000 or $55,000 in contributions (exclusive of the catch-up)?  Compensation - 270,000 or 275000?  I always get confused on this. 

Thanks 

Does anyone have any thoughts on the meaning of "offset arrangement" on the Form 5300?  We've got a defined benefit plan that offsets benefits by the benefits under another defined benefit plan.  (There are complicated reasons for this structure.)  I'm seeing lots of discussion that a "floor offset" plan involves only a DB plan that is offset by a DC plan, not by another DB plan.  But I can't find a specific definition of "offset arrangement," without the "floor" part.

We have a participant who terminated employment with an outstanding loan.  He is requesting a partial direct rollover of his account balance excluding the loan; wants to take the balance of his account as a taxable distribution.

Obviously he will receive a 1099R, code L for the loan offset with $0 withholding.

Somewhere I recall that the 20% withholding would be calculated on the total account balance excluding the loan - the total being the amount rolled over plus the amount not rolled over.

Does that sound right??

I've only seen two uniform points plans in my life. We've just been given a situation where such a plan failed nondiscrimination testing, cause the formula (which has apparently always worked well in the past) heavily weights contributions based on years of service. One of the owners retired unexpectedly one month into the year, and the plan waives the normal 1000/last day requirement for retirement on or after NRA. Since his comp was so low, (only one month comp) former owner gets something like 60+ % of pay, so the average for the HCE's is too high to pass testing. Although I don't have hard data, it appears that restructuring won't work, or at least not at a contribution level that is possible/palatable. (Query - does the prohibition against uniform points n one of the restructured plans apply if the plan is uniform points to start with, or does it apply only if you are attempting to restructure to a uniform points plan where it isn't ALREADY a uniform points plan?)

Ok, so you go to rate group testing, which also fails. An 11(g) amendment could be done, but here's my question: when you do such an amendment for this type of plan, I assume that any corrective amount/increase to the necessary number of NHCE's must still be allocated (or calculated) on the uniform points allocation formula in the plan? Or to ask it another way, can you simply assign random amounts to random participants like you can in an "everyone in their own group" profit sharing plan, or must you somehow amend the plan to increase the formula for a select group of NHCE's, so that they get (x) points for each unit of compensation, rather than "y" units that they get under the current formula? I suppose it ultimately has the same effect, as the formula would be adjusted for those selected individuals to achieve a passing percentage, so it is ultimately the same thing.

Ugh - if now going to the rate group test, is it going to have to pass gateway? Or is the fact that the basic formula is a uniform points allocation which isn't subject to gateway a saving provision?

Or, is there a better way to do all this?

I know the 11(g) amendments are pretty flexible, but I've never run into this particular situation.

Thanks!

Employers can match employees' contributions to their FSA's, up to the limit for that year.

Can employers place their own limits based on plan type? In other words, can an employer match up to $2,600 for a family plan, up to $1,500 for a 2-person plan, & up to $500 for a single plan?

Along the same lines, can the employer match be different if an employee selects a Cadillac vs. a HDHP plan?

Thank you.

It appears that Roth 403(b) contributions in included in the W2 Box 1 calculation of wages and also noted with code BB in box 12.  Can the employee Roth 403(b) contribution be used to satisfy the earned income test associated with making contributions to a outside traditional or Roth IRA. 

Said another way... Assuming no other earned income, if MFJ, can a $13K after tax employee contribution to a Roth 403(b) be used to meet the earned income test to allow additional 2x6.5k contributions to a couple's Roth IRAs? 

We have a business that is 100% owned by one person.  We have set up a restricted stock plan under which participants vest in their stock as the owner sells his ownership.  So, for example, if the owner sells 10%, a participant would vest in 10% of what he is granted.  If the owner later sells another 16%, a participant would vest in another 16% of what he is granted.  I don't think this is a problem because restricted stock is exempt from 409A, so we don't have to follow the payment trigger rules of 409A.

A participant generally has to be employed on the vesting date, but if he terminates employment not for cause or due to death or disability, he can vest if the owner sells any stock during the 12 months following termination.

We have an employee whose last day of work occurred mid-September.  He was participating in both our group health plan and our HRA. He remains covered by the health plan through the end of the month. The question is if he is also covered by our HRA during that time?

In our plan adoption agmt, we have one clause that states that "an Employee is eligible to participate in the Plan under the same terms and conditions as under the Company benefit plan" - and our group health plan is then specified as the "Company benefit plan". However, later in the agmt, we have another clause that specifies "Permit Eligible Employees to participate in the Plan after Termination" and the "No" box is checked.

So our TPA is saying that the ex-employee's access to his HRA ends on his last day of work (or technically, the next day). But that seems to conflict with the first clause and in addition, it seems, shall we say, asymmetrical to allow an ex-employee to continue to accrue expenses under the health plan, while denying him access to the HRA at the same time. 

I am not sure which clause should take precedence or whether it is up to us, as the plan administrators, to override our TPA's interpretation if we so wish. Or should we just check with an ERISA lawyer...

Thanks in advance!

Client missed minimum funding deadline of September 15, but said date falls on a weekend. Client got the funding in by the following Monday, is this an issue or is the deadline pushed back since Sep. 15th falls on a Saturday this year? I cant seem to find any persuasive information on the matter and prior discussions on benefits link regarding the issue offer differing opinions. Thanks for your help.  

The company filed a Form 5300 for a determination letter a few years ago and qualified for the user fee exemption.  Now they are terminating the plan and filing a Form 5310.  Does the user fee exemption still apply?  There have been no changes, e.g., the company is still the same size.

Employer has a HDHP and provides a self insured HRA administered by a TPA.

Employer has a business associate contract with TPA.

If employer required to send out a HIPAA Notice of Privacy Practices to HRA participants even though employer does not receive PHI related to HRA?