The 401(k) plan has auto enrollment. Apparently a few years ago, three participants were not auto enrolled and it was discovered on audit. HR spoke with these employees and they all indicated they would have opted out from the start if they had been provided with an opt out form. If we have them sign a document indicating they would have opted out, will that save us from having to make corrective contributions on their behalf? Of course that would save us money and make our lives much easier, but it somehow doesn't seem quite right to me. While the employees are willing to execute such a document, I could see the IRS arguing that employees could be pressured into signing such types of documents to please their employers etc. 

Any input would be appreciated. 

One participant plan owns real estate that is rented out. An organization filed a complaint against the property manager and the 401k as the owner of a house. Are attorney fees a settler function or can the plan pay the attorney fees?

A deemed distribution of unpaid loan balance in 2015 after leaving employment was recorded on tax return as income. If loan is then paid back three years later including all interest etc.. Can an amended tax return then be filed to remove the 1099R distribution?

Putting aside all of the other complications and concerns with ROBS, let's assume the structure has already been finalized and implemented.  Now, the C corporation that is owned by the Plan goes to a lender to borrow money to finance its inventory, general operations, what have you.  The lender is happy to lend the money to the corporation as long as the principals - i.e., the individuals whose Plan accounts own the stock - will guarantee the loan.  Would providing that guarantee be a pt?  

2  plans with common ownership, have a different match.  For ADP and ACP, one is prior year and one is current year. 

Can we voluntarily combine the plans for just coverage?

Medical group sells practice July 31, 2018.  Former doctor employee terminated employment in 2016 and is 20% vested in PS source.  The terminated doctor has not incurred forfeiture since he has not been cashed out nor has he had 5 break in service years.  We believe full vesting must occur here.  But the client does not want to provide full vesting due to termination circumstances.  I'm right - right?

Thank you in advance for comments. Tom

An employer is considering becoming an adopting employer in a MEP. We advised this potential adopter to ask for a copy of the 408b2 notice. The sponsor of the MEP refuses and states they have no obligation to provide the 408b2 notice to adopting employers. Their reasoning is that the 408b2 regulations apply to the covered service providers and themselves as plan sponsor of the MEP (i.e the fiduciary referenced in 408b2). They state the adopting employer is not a plan fiduciary and therefore will not provide it. 

After reviewing 408b2 I think the MEP sponsor is right. However, how is an employer supposed to make a good decision for their employees if they don't know who is being paid what? All they have is the participant fee disclosure and cannot compare total cost between a MEP or sponsoring their own plan?

Curious of anyone's thoughts. Thank you

Employer has several USA Divisions and there are 3 401(k) Plans:

- Plan A by other TPA - Age 21 and 6 months, with monthly entry dates, Safe Harbor Match

- Two Plans by us as TPA - Plan B has entry on the date of hire and is a Safe Harbor Match. Plan C has a 2-month wait, with monthly entry dates and discretionary match.

Plan C is a smaller Plan and will not pass coverage on its own. However, this Plan was effective 01/01/2017 but they did not hire anyone until mid-November 2017 (i.e. no contributions as no one was eligible).

We cannot use the RPT for coverage - correct?

If not, I believe we can use the ABT - correct?

Other than a management function scenario, I believe there must be some cross-ownership for an affiliated service group to exist correct?

In other words, suppose you have an employee of an accounting firm (no ownership) start his own firm. Then 100% of his work is done for the accounting firm. He owns 100% of his corporation but has 0% and has never had any ownership in the accounting firm.

No affiliated service group?

Thanks.

Plan has 401(k), Safe Harbor Match, and Class Based Allocation for Profit Sharing.  1,000 hours and last day required to receive the Profit Sharing.

When I run rate group testing, two employees who terminated before the end of the year show up.  They both worked 1,000 hours, but they are not benefiting because they terminated their employment.

I am having a brain freeze.  If these employees are not benefiting and are receiving no employer contribution, why would they be included in the rate group testing?  Is it because they do not meet a statutory exclusion?

Thanks!

A U.S. 401(k) participant  is married to someone who resides in India.  Originally when she filled out the 401(k) beneficiary form she left the money to someone else.  Once she was told that she had to get spousal consent to leave him off, she filed a new beneficiary form with the same beneficiary designating herself as single.  What are the ramifications of this to the plan sponsor?

Company wants to deduct its 2017 PS and SH contribution on its 2018 taxes?

Scenario 1:  taxes filed 3/15.   Contrib made Aug 15.

Scenario 2:  taxes on extension.  Contrib made Aug 15.  Taxes to be filed 9/15.

Scenario 3:  taxes filed 9/1.  Contrib made 11/1.

e have a SARSEP that has always passed the testing in previous years. It did not pass. The 2 HCE's are over 50. Can the excess be re-characterized as catch up contributions as in a 401k plan?

A 401k plan closed a bank account and transferred the funds to their Defined Benefit bank account.  Six months later the funds plus interest earned were transferred back to a new 401k bank account.

Should this transaction be reported on Schedule G as a non-exempt transaction?  or can it be recorded as a "mistake" in the auditors report?

I have a client who receives income on a W-2 and on a K-1. For 2017, his W-2 is $140,000 and his K-1 income is -$26,000. Do I need to subtract the K-1 income from the W-2 before calculating the 25% of compensation limit for profit sharing, or can I ignore the K-1 negative income?

Thanks for any responses!

Following a corporate acquisition, the profit sharing plan of Target merges into the profit sharing 401(k) plan of Buyer.   Prior to plan merger, participants of Target profit sharing plan filed beneficiary designation forms.   Buyer's profit sharing 401(k) plan is silent as to the effectiveness of these beneficiary designations.   Are these beneficiary designations effective with respect to Buyer's plan and, if so, participants' entire interest in Buyer's plan (i.e., profit sharing account plus 401(k) accounts accruing post-plan merger), only profit sharing accounts in Buyer's plan (i.e., the profit sharing account from Target's plan plus the profit sharing account accruing post-merger), or only the profit sharing account transferred from Target's plan?

Because IRC section 414(l) provide that a merger of plans is the combining of plans into a single plan, it would appear that by operation of law the beneficiary designations made with respect to Target's plan remain in effect under Buyer's plan, which is post-merger the combination of two plans, until a new beneficiary designation is filed.

Thoughts?   

Dear Experts,

I need to understand a bit as i am not getting some direct answers from anywhere else. Hence seeking your guidance. Also i am not an expert in this subject so hopefully i am explaining this in laymans words so u have a complete understanding on what i am thinking. 

I have with my employer a 403b (tax sheltered) + Money purchase plan (i believe 401A) called as Plan B and a Salaried Retirement Plan / Defined benefits plan simply called as pension plan A. I am clear about the 403b and i understand it well. I wanted to know if the Money purchase plan (401A) and the Salaried Retirement Plan / Defined benefits plan ( Plan A)... are any type of an IRA. Like a SEP IRA, SIMPLE IRA, etc

The reason i am asking is that I plan to open an TIRA (Trad IRA) and i wanted to know if the above plans go in the pro rata rule on IRAs. The Plan administrator is not able to explain what type of plan the so called "Plan A" and the 401A actually are. Bottom line i simply want to confirm that these plans especially the salaried retirement plan are not any type of SEP IRA / SIMPLE IRA or any other IRA of any sorts to be doubly sure so that me opening an TIRA does not have any pro rata applicable from these plans. 

Best Regards and thanking in advance.

Trying to find out what steps are taken when withdrawing a retirement benefits. My EX knew he had not signed the final paperwork of our QDRO (QDRO was awarded in final divorce decree that was signed by judge and filed so I have been told by court it’s a legal binding order regardless of paperwork was not completed). We were in the process of trying to finalize it and submit to his employer when he was apparently in bankruptcy proceedings. Fast forward a couple months, I contacted the State Department that handles QDRO only to find out ALL funds withdrawn. I was asked 3 times to subpoena them to get a full accounting of what happened. Yet I cannot just draw up my own subpoena correct? I was given some info that ex might have forged my name in order to withdraw monies? Possibly ex had to state funds had not been allocated in any legal actions? Ex was fired for embezzlement and is on a 5 year deferred sentence. Cannot have any matters entered into court during this time. Ex states he will pay me but I do not ever believe that. My question, is there a possibility he did have to sign something or possibly forge my name? Not looking to get him in further trouble but want to recoup what I am due. I realize I’m going to have to hire attorney. Not wanting to go this route before trying to get some clarification. 

Assume you are drafting a DB plan.  The client says the only available benefit forms will be the single life annuity, 50% QJSA, 75% QOSA, and 50% QPSA.  The survivor benefits are fully subsidized, and all optional forms are actuarially equivalent. 

Assume further that the client asks the following.  He says he knows an employee is going to submit a QDRO that says the alternate payee is considered the participant's spouse solely for purposes of the QJSA, and not for any other purpose (including not for purpose of the QPSA).  He asked what will happen if the participant dies after submitting a distribution election form for the QJSA, but before payments actually begin.  He says in this regard he does not want the plan to offer one penny more or any option more than the law requires.

What is your response? Will the alternate payee receive the 50% survivor annuity under the QJSA or nothing because the participant died before the annuity starting date, i.e., pre-retirement, and the participant is not the spouse for purposes of the QPSA?  

After upgrading to version 2018.01 (and again still with 2018.1), statutory excludables are not being determined correctly when eligibility is run. 

The issue appears to be limited to employees hired in the first half of the prior plan year, and whose stat entry would be in the second half of the current plan year.  After the initial eligibility run, these ees are incorrectly included in the excludable group.  Running an ADP/ACP with the "Recompute statutory exclusions prior to test" checked correctly puts the ees into the non-excludable group.  (We are using stat entry dates for the determination.)

However, if you have to run eligibility again the same ees are back in the excludable group. 

At first we thought this was limited to our 2018 mid year tests, but in going back to clients for whom we prepared a 2017 ADP test earlier this year, and now are going back to recalculate a profit sharing contribution, for example, we are having the same issue.

Support has determined that this is an issue that is being worked on, and hopefully a fix will be coming shortly, but I was wondering if anyone else was having this issue, and if so, how you are dealing with it in the interim.

Thanks.