Employer has SIMPLE IRA with the 3% match. The 3 owners have maxed out their contributions in July. The match is made each pay period. The question is should the 3 owners continue getting the 3% match even though their contributions have maxed out? I realize that the match is made on the whole year's compensation but what if their own contributions ended up being less than 3% when their total year's compensation is used.

Should the employer wait to true-up at year-end? Or is it like a 401k plan where if the match is made each payroll period, it stops when the contribution stops and no true up is needed.

Client's plan uses W-2 definition of compensation and permits separate deferral election on bonuses.  Match is 100% of deferrals up to 3% of compensation and is payroll based; no year end true up.

If someone elects 10% deferral from regular paycheck but 0% deferral from separate bonus check is any match calculated with respect to the bonus amount?

Example: $10,000 salary check with 12% deferral and $1,000 bonus check with 0% deferral.  Deferral is $1,200.  Is match based on compensation of $10,000 ($300) or $11,000 ($330)?  Is the answer different depending on whether bonus check is paid on same day as salary check or on a different day? 

Thanks in advance.

I am divorced and our QMCSO requires my ex/children's father to provide health insurance.  He does, through his wife-she carries our children (her stepchildren) on her employer's health plan.  Her employer's health plan is self-insured/self-funded.

My ex is a federal employee.  Public Law 106-394 requires him to either enroll the children under his FEHB coverage or provide documentation that he has other health coverage for the children, which he does through his wife (the children's stepmother). The children are not enrolled in FEHB or any other plan-the stepmother's plan is their only health insurance coverage.

I would like to be listed as an alternate payee for benefits for my kids on her employer policy.  Does ERISA give me that right? I think it does but stepmother's employer says it doesn't because the kids are not her dependents and QMCSO doesn't require her to carry the children on the plan.

Thanks for your help with this.

I have a plan that had a missed deferral opportunity for a rehire and made the correction and lost earnings. On the Sch H of the 5500, it does not seem as I should put it as a late deposit b/c it was not withheld and then not submitted. But just wondering how others are reporting. Thanks in advance.

The division of child support wants essentially the participant's entire account for back child support, and there is not enough left in his account to gross up to account for the 10% voluntary withholding that applies under 3405(b). Under 3405(b), 10% is the default (because this is not rollover eligible) but the participant is permitted by that statute to elect anywhere from 0% to 100% withholding. This does not do much to help the division of child support get the exact amount that they want. 

It seems that this only works if a QDRO may also order the participant to elect no withholding on this distribution so that the plan may pay the full amount "net" of (0%) withholding. 

But I cannot find any guidance or even examples of this being ordered. I figure it must be possible or else child support QDROs have a sort of intractable issue. Has anyone ever encountered this or seen any guidance on whether a QDRO can order a taxpayer to elect not to withhold taxes?

We have three senior executives that are part-time and don't work enough hours to be eligible for the GHP. Two are actually on Medicare. We would like to somehow help pay for the health insurance or medigap coverage they have obtained elsewhere. We realize that direct reimbursement creates an employer payment plan that runs afoul of the ACA. Any ideas? It is my understanding we could increase their taxable wages to help them pay for these individual insurance policies and/or medigap coverage, but that we can't require that the funds be used for that purpose. However, we would want to determine the amount of the increase by doing some research on how much this alternative insurance is costing and base the compensation adjustment on our findings. Would that pass muster?

A 457(b) governmental plan operates under an AXA plan document.  There is an unusual provision in the AXA base plan document.  

“Mandatory Employee Contributions. Notwithstanding section 4.09(a) above, if the Employer has elected Mandatory Employee Contributions in the Adoption Agreement, such contributions shall automatically be deducted from the Employee’s Compensation at the rate or dollar amount indicated in the Adoption Agreement and shall be treated as an after-tax Employee Contribution. If so indicated such Mandatory Contribution shall be to the Plan and be treated as a contribution that satisfies section 3121(b)(7)(F) of the Code. It is the Employer’s responsibility to determine whether this Plan will meet the requirements to be a social security replacement plan.”

 I have no problem with the Mandatory Employee Contributions, but 457(b) plans cannot accept after-tax contributions, with the exception of Roth contributions.  This plan does permit Roth contributions, but the aforementioned provision is very explicit in its reference to after-tax, not Roth contributions.

 What do you think?

An employer currently charges its employees 25% of the health premiums, and pays the other 75%.  Going forward, the employer wants to charge any new incoming employees 50% for health premiums, but have the existing employees continue paying the 25%.  That would result in the existing employees getting 75% of premiums as employer contribution, while new employees would only be getting 50%.  

Is this permissible?  Or is it discrimination?

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 ?