employees of medical group will form LLC with plan assets which will purchase property and lease it to medical group. LLC will be open to all employees/doctors/participants.  My initial thought is it is a PT because the owners of the medical practice are  benefiting from the use of plan assets to lease property to their practice. however i am trying to pin down the legal basis and whether there are partnership interest thresholds that they might be able to stay below to avoid the PT. any thoughts? 

Investment advisor is telling a client that he can do a direct transfer of his 401k RMD to charity as a qualified charitable distribution.  I thought it was only for IRA's.  I could not find anything allowing from 401k plans.  Did something change for 2018?  If so where can I find the regulations allowing it?

Does anyone on here have any clue where I can find an attorney who can practice in Tennessee who specializes in Fiduciary Responsibility breaches in Non- ERISA 457 Deferred Compensation Plans? I have seen people and attorneys all over the internet on many websites giving advice about this and how certain things are able to be fought in court. HOWEVER, I have been contacting attorney after attorney for the last 2-3 years (at least 50), even the one's giving that advice, and either can't get them to talk to me, they won't return my calls, or they take all of my case information and then I never hear back from them. I have been charged by the state bar association for lawyer referrals only to have those referrals tell me they don't handle those types of cases and don't know why I was referred to them. How can violations of fiduciary responsibility be illegal if no attorney will even take a case involving them? I have talked to attorneys who have referred me to their friends and their friends respond that they don't handle those types of cases. I have been referred to securities attorneys, employment attorneys, retirement plan attorneys, ERISA attorneys- and NONE of them will contact me back. If anyone has any idea of an actual attorney who handles these types of cases, I would really appreciate the contact information. I am tired of talking to attorneys and telling them my story, only to be ignored. Thank you in advance for any assistance. 

Is anyone else having difficulties, receiving Schedule C data (direct and/or indirect compensation) from American Funds? If so, how did you resolve?

Hello,

Have a solo 401k plan being set up.  Owner would like to take his contribution and invest in a land/property investment that his son is involved in.  I know this type of situation is a little tricky so any guidance would be greatly appreciated.  Thank you.

Plan has immediate eligiblity for 401k but a 1 year wait for the match.

As an example, Employee A was rehired after being gone for just a year and was eligible for the match prior to leaving. The client thought that they had re-satisfy the match eligibility so they did not provide them with the match as they should have.  They did provide them with the ability to make 401k contributions.

So clearly someone who made 401k contributions would need to receive the match because they were eligible.  But what about those who did not contribute?  The employees were told they needed to resatisfy the  1 year wait for the match, and it is therefore conceivable that they decided not to participate based on their understanding that they were not eligible for the match yet anyway.

Should we assume they had some contriubtions and provide them with a missed match correction? 

An accountant we deal with forwarded his client's P&L for 2017, there are 2 partners.

Would not each of the partners' contribution be based on net ordinary income plus guaranteed payments?

Client executed an in-plan conversion of employer PS account to a designated ROTH account on December 30, 2014. QDRO now authorizes 1/2 of that designated ROTH account to go to ex-spouse. Ex-spouse has never owned a ROTH IRA. Ex-spouse now elects a direct rollover from the plan to a newly-established ROTH IRA. Client and ex-spouse are both age 70, so the 10% penalty is not a concern. The only concern is whether all earnings (and the earnings are substantial since 2014) are tax-free or not.

Question #1: How does the 5-year holding period apply to ROTH IRA assets that originate from a transfer that would have been non-qualified if it had not been a direct rollover from the plan to the ROTH IRA?

Question #2: Suppose that the direct rollover does not occur until January 2, 2019. How does the 5-year holding period apply to ROTH IRA assets that originate from a transfer that would have been qualified if it had not been a direct rollover from the plan to the ROTH IRA?

I have a client who was the sponsor of a VS 401k plan.  They elected to to join a MEP available through their HR services company.  The original 401k plan was amended to suspend all contributions effective 4/30/2018 and the adoption of the MEP was effective 5/1/2018.  The MEP was setup to mirror the existing plan (basic 401k subject to ADP); to the employees it was essentially only a change in where their assets are being invested.  All participant accounts will be merged from the old investments to the new.  

With regards to compliance testing, we're getting push back from the  MEP administrator RE one set of compliance tests vs. two.  I don't see any reason why the plans would be tested separately since it is one employer who is the sponsor of both plans.  A separate filing for the original plan will be required until the assets are fully merged to the new but is there a logical reason (one that I am missing) as to why separate testing would be performed?  I have looked through regs RE mergers but most of them deal with asset/stock sales which this is not.

Hi, we are a small business with 4 people, all related to the owner. Since we do not have any employees considered “non highly compensated” under IRS rules, are we exempt from any sort of top heavy requirements? Thank you.

A defined benefit plan requires participant contributions.  An independent contractor signed an independent contractor agreement but later became an employee with no break in service.  He is claiming that he should have received eligibility service credit under Code Section 414(n) because he was really a leased employee (worked under direction of company and solely for the company using their equipment).  Also claiming that he was never provided with information about the plan and contribution requirement.  There are no plan records to verify these claims and we cannot confirm that SPD/application was provided.  Does he have a claim?  

I need some advice.. this is a sad and difficult situation. I was in the insurance and financial service industry for over 20 years. I moved &left an agency I ran after 20 yrs to take care of an ailing parent. Previously I was a reg rep for my co and actually handled our own simple for our office.. Esp since “i” shares were available because we actually did retirement planning at the time. This preface is why I feel so dumb! After my dads death I went back to work for a different agent, he advised at hire he provided a simple with a 3% match ,i also took the job on contingency he provide some type of group health. I was overwhelmed already in an environment that was seriously non compliant & sub par regarding just client accounts. If I ever brought up a compliance issue only wanting to help or resolve it was met with disdain as if I was trying to “ run the show” and reminded who’s name was on the door and that he was a CFP! After leaving for another position ( that was worse,lol ???‍♀️) I realized he had been deducting 3% for my Simple contribution every two weeks but I never did a risk tolerance tool, any paperwork,nor got correspondence ever. I texted him to inquire “ where my Simple was” his response was “i don’t know and why would I know where your investments are”? My response was simply “?”, I waited until the next day hoping he was in a mental crisis @ the time and send him another text explaining he had been deducting the 3% contribution .. again the shocking response was “ that’s news to me and I guess I owe you some $” I was mortified but still trying to not burn a bridge and replied “ oh well you saved me the 10% penalty because I need the $” then  just waited another few days because I was praying he’d do the right thing and at least offer to repay me my contributions plus the 3% match , i decided to just suck up the market loss ( which was huge?), he said he’d have to contact his cpa although I told him I had my last stub showing the 3% he deducted. Sadly a week later he sends me a text that says “ damn it “ I owe you $XXX which was EXACTLY MY Contribution! I have not responded at all since then ! I also found out his only former competent staff set up the plan 5 yrs ago! He has hired multiples of ppl since then and I have no doubt he has  neither done their paperwork to start their Accts nor has he been even sending in the contributions for former employees within prescribed times if at all! On one hand I want to help him still get out of this mess on the other I just want my $ plus match promised and not cause anymore animosity.  Telling him again the ramifications of his actions will only make me look like the “know it all” again and be met with an unpleasant outcome.  I don’t even want to disclose what happened with the health ins in this thread now. I knew I was in trouble when he told me “ Men have vulnerable egos & his  wife was a better man than he was”??‍♀️??‍♀️?help!  what is he potentially facing and how can I help him without hurting myself further ? Thanks, Serious Idiot ?

Hi to All,

If a 401(k) plan is on a platform like John Hancock, and JH produces the 404(a)(5) notice, how must it be distributed?  It's available on the participant's account page at JH.  Is it enough to tell the participants via an email or a written memo how they can access it themselves on their account page?  Or must the employer access it off the Plan Sponsor page, download it, and either distribute paper copies or email it to the participants?  Must this be done every quarter?

I am not picking on John Hancock - I could have used any platform provider - we just happen to have a number of plans with them.

Thanks for any information you can provide.  Yes I realize we should already know this and we are getting to the table late but better late than never!

Retirement plan documents now is mostly about IRS-preapproved documents, and seldom does an employer apply for a determination.

Beyond Form 5300 applications, what is it that enrollment as a retirement plan agent permits an ERPA to do (that one could not do without enrollment)?

Is it only about the Employee Plans Compliance Resolution System?

Does the right to represent a taxpayer in the IRS’s examination of a Form 5500 report matter?

Is there something else allowed for an ERPA (but precluded for others)?

Participant terminated 1/2/2018 and was 72 at the time of termination. Not a 5% owner.  Under the RMD rules he could postpone his first RMD until 4/1/2019.   If he did, he takes a second RMD in 2019 for 2018.

The participant rolled his account balance to an IRA on 5/1/2018. The IRA custodian is now telling the participant he had to take his first RMD before the funds were rolled. The 401(k) recordkeeper is saying he did not have to take the RMD before rolling the funds.

I do not agree with the recordkeeper.  I say the participant HAD to take the 2018  RMD before the funds were rolled.  The first RMD is technically for  2017, the second is for 2018. Even though he could postpone the payment until 4/1/2019, the rollover to the IRA triggered the RMD.

Need some help in understanding what and when the payment needed to be issued.  To complicate matters, the Rep from the Recordkeeper said when they spoke to the  IRS about this matter, ( called the 800 number) IRS rep  told her the funds did not have to be returned to the 401K trust and paid. The payment could be made from the IRA. Anyone else have issue with this response?  

A prevailing wage plan has loan repayments going back into the plan with pre-tax money from the payroll.  In addition, the loan repayments are being paid by the "untaxed/pre-taxed" fringe benefit dollars.

My understanding is that loan repayments are paid with after-tax dollars.  A participant is repaying part of the loan with money that has already been taxed. As you know, one of the benefits of contributing to a 403(b) or 401(k) is the fact that the money is invested pre-tax. When a participant takes out a loan,  he/she isn’t taxed on the proceeds, but the money used to repay the loan has already been taxed so the additional interest going into the account will effectively be taxed twice–at the time of contribution and again when eventually withdrawn from the account in retirement.

The rules would not change just because this is a prevailing wage plan?

We are a TPA firm who does some COBRA administration. Received a call from a distraught person because his COBRA was stopped due to non-payment. He sent a partial payment to cover May then sent nothing for June & July. He was then notified that coverage was stopped due to lack of payments. His argument was that he never received any payment coupons nor did he receive any "warnings" that coverage was going to end.

 He had signed off on all of the initial COBRA paperwork which stated the costs, payment of premiums, etc.

My question is whether he has any push back.

Thanks!

Appreciate some insight into this situation.

Calendar year 401(k) plan.  Company is sold in March, 2018.  Company terminates 401(k) plan effective 3/18/2018. 

A participant had already earned over the annual comp limit, deferred the max, and received the max match based on the annual limit, prior to plan term.

I believe due to the short plan year that we now have to prorate limits, including the comp limit?  If that is correct, the participant's match deposited exceeds the allowable amount using the prorated comp limit.

If that is all correct, is it acceptable to treat the overage as a mistake of fact, given that the match was calculated using an incorrect compensation amount, and return the overage to the employer?  Or must the overage be moved to the forfeiture account. 

Thanks very much.

Employer is asking if he can include Union Office Manager in his 401k/PS Plan.  Knee-jerk reaction is NOOO!  I think he has 20+ other Union plumbers.  Would like  any other opinion.

So, the 5% owner hits age 70.5 in January 2017, and we do his 2017 RMD in 2017.  No one blinks.

Now we find out that he sold his portion of the business "one second after the stroke of midnight" (who knew lawyers could be poets?) (I find it hard to believe that that's what they were doing while singing "Auld Lang Syne") into 2018 to avoid taxes in 2017, and he is arguing that he doesn't need a 2018 RMD.  I explain that, at least in this instance, once he is in RMD pay status, that's where he stays.  Grudgingly accepted.

Here's the question - his wife turns 70.5 in 2019.  Is she off the hook because the stock was sold before the calendar year in which she turns 70.5?  If she is still employed in 2019, do I go to the definition of HCE, which has a lookback year and because her husband owned more than 5% of stock for a second in 2018, she has to take a 2019 RMD?  Or do I go to the definition of "5% owner", which does not includes a lookback year?  Personally, I'm hoping she terminates and takes her entire balance before the end of 2018! 

Thanks.