A 50-year-old participant had comp of $24,000 for the 2017 plan year, and he deferred all $24,000 of it.  Since catch-up contributions can be disregarded for the 415 dollar limit, can the participant be allocated up to another $6,000 in employer contributions, bringing his annual addition to over 100% of comp?

We have a controlled group of husband and wife with separate business, but with a minor child.

Husband has a PS plan.  Wife adopts it.

His income is $225,000.  Her income is $25,000.  They file jointly (if that matters)

What is the deduction limit?  Is it the overall plan limit of $62,500 (225k + 25k / 4)? Or is it limited to each company separately?

In other words, can she get a PS contribution of $15,000 and can he get the balance of $47,500?

Or does it have to be $55,000 (max 415) for him and $6,250 for her?

Informal survey - do you permit participants to submit QDROs in electronic format (with raised seal visible) or do you require hard copy originals and why?  Thanks!

Sole proprietor has a Safe Harbor 401k plan  and has himself and the two other employees participating.

Employer forms a C Corp and starts a new Safe Harbor 401k plan, terminating the Sole Proprietorship and Sole Prop 401k plan and transferring all employees and balances to the Corp 401k plan.

Employees are doing the same jobs as before. "Same Desk"

Is my understanding correct that service with Sole Prop plan transfers to the Corp plan?

We have an participant who worked for Company A (of a control group) and her job was transferred to Company B (of a control group).  Company A sponsors a DC Plan with section 401(k) and Company B sponsors a DC Plan with employer source (only) funds.  Said participant is seeking to take a withdrawal of her balance from Company A 401(k) Plan and the question arose about her having a distributable event. 

If review of the IRS guidance, https://www.irs.gov/pub/irs-drop/n-02-4.pdf, Section III seems to suggest that if both companies have section 401(k) then no distributable event is present.  However, company B only has employer source funds and no 401(k).  Am I interpreting incorrectly here?

Say you have an exempt option or SAR. One of the requirements is that the stock right contains no feature for the deferral of compensation, which is defined as anything other than the right to receive payment upon exercise and would allow compensation to be "deferred beyond the date of exercise." 

The preamble says "if an arrangement provides for a potential to defer the payment of cash or property upon the exercise or exchange of a stock right beyond the year the right is exercised or beyond the original term of the stock right, the arrangement provides for a deferral feature and must comply with the requirements of section 409A from the time the legally binding right granted by the award arises." 

So if you exercise the option/SAR now, you can get paid any time during 2018. 

My question: What if someone exercises an option/SAR when it's administratively impossible to pay them in the same year, e.g., they send their exercise notice at 4:59 p.m. on December 31, 2018. Payment will have to be made in 2019. What's the cutoff? As soon as possible? If it's paid by March 15, 2019, is the payment "deferred" or can you use a short-term deferral like concept to say it's not? 

If the employee exercises on December 31, 2018, but payment is not made until, say, January 5,  2019, do you report it as 2018 income?

Appreciate any insights. 

A plan has a safe harbor match allocated on an annual basis.  The client has realized that there were 4 employees eligible on January 1, 2018 who have not been given the opportunity to defer.  I will advise them on the correction under EPCRS, which is a 25% QNEC based upon 3% missed deferral and a missed SH Match plus earnings.  They will notify employees as required.

Question -  Is the compensation based upon compensation from 1/1/2018 through the date the employee is given the opportunity to participate?  I would think yes, but when I calculate the annual safe harbor match for ALL employees at year-end, this portion of compensation will be included in the calculations.  It would seem as though the affected employees will get matched on this compensation twice.  Is that how it is meant to work?

Thanks!

We administer a “ hard frozen” plan. Many of the participants terminated recently, and they can not be found. Since these are NHCEs, and are past the plan’s NRA, they are entitled to actuarial  increases in accrued benefits.  In the case of a frozen plan, where participants not only can not be located, but are past NRA, how would the RMD be calculated and who is entitled to receive, assuming the beneficiaries can not be located, as well?

Can a non spouse be named as a beneficiary as a part of a joint and survivor annuity (if the participant is still actively working, if the participant separated from services, if the plan is under termination, etc.....)?

Any related information will be highly appreciated.

my father had passed away and I"am the Beneficiary of a Profit Sharing plan. And the companies name was Lever Brothers Company. He Retired in 1985. But passed in 2017. And the company has changed hands and name How in the world do I locate this Profit Sharing plan because I have exhausted myself. 

This is a situation most envy. I cannot find authority limiting the benefits to each of these. 

Scenario: Individual over 50 yrs old was a participant in a 401(k) plan for part of the year and put $22,500 into Employer 1's 401(k) plan. Individual then changes jobs and now qualifies to contribute to a 457 plan with Employer 2. Individual plans on maxing out contribution to Employer 2's 457 plan with $24,500 for 2018. Individual has a side job of rehabbing houses via a single member LLC (with no employees) and earned $300,000 there. Individual want to max out and contribute $55,000.  

It appears that Individual can contribute the $22,500 to the 401(k), the $24,500 to the 457, and the full $55,000 to the SEP for a total deferral to the three plans of $102,000. I have never heard of circumstances similar to this and want to see if anyone has more insight into a provision limiting the deferrals for the three plans that I am missing. I have done extensive research and cannot find anything. This appears to be permissible. Thanks.

I thought it was common knowledge that 2% shareholders cannot enroll in a 125 plan?  I read that if a 2% shareholder is enrolled, it can cause issues for the plan.  Does anyone have any practical experience how this is handled?  How would this have happened?

Have a welfare benefit plan funded from general assets of sponsor over 100 employees

Taking the position no audit required - so as far as I can tell all I file are the 3 pages of the 5500 -

no schedule H or schedule C?

thanks

If any employee has meet the eligible requirement(21/ 1 year/semi) and is now considered eligible, to date they have not contributed.  This employee is now no longer working full time and is  becoming a part time employee.  Can we now exclude them.  The documents says we can exclude"part-time, temporary or seasonal employees, i.e., employees whose regularly scheduled service is less than 1,000 Hours of Service during each 12-month eligibility computation period"   I'm leaning towards once they are in you can not exclude someone

Thanks

A husband and wife each operate their own consulting business. There are no other employees in either company. The husband has maintained a solo 401(k) for some time and the wife would now like to join. Do controlled group rules enable her to participate in the solo plan or would she need to be an employee of the husband's business?

A profit sharing plan issues loans in 2017 to two participants, both of which exceeded the maximum amount.  We just found out when we received the year-end data.  The plan has an in-service distribution provision at age 60.  For one participant, who is younger than age 60, the loan taken was for $50,000 but the maximum amount was $15,000.  The other participant, who is older than age 60, took a $13,000 loan but the maximum amount was $10,000.  The client does not want to file a VCP application.

For the younger participant, we advised that the 2017 Form 1099R be issued now for $35,000.  This is a deemed distribution.  The participant will continue to make the scheduled installment repayments until he repays the $15,000 plus interest.  At that point, if he defaults on the remaining $35,000 there will be no tax consequences since it's being reported now.  Obviously, there can't be any withholding now since it's after the fact but according to the EOB if the deemed distribution occurs at the time the loan is actually made, the plan is required to withhold against the loan proceeds.  Any real problem here?

For the older participant, we think there are two options.  The $3,000 excess can be treated as a deemed distribution, and we would follow the same procedure as above.  Alternatively, the excess can be treated as an actual in-service distribution.  In that case, the plan would modify the loan agreement and only carry a loan receivable of $10,000.  But again there would be the issue of missed withholding.  Any opinion on whether one of these options is preferable to the other?

Thanks.

What's the latest on the potential requirement for small medical plans to be required to file 5500 starting with plan year 2019?

Small client has closed his practice and was never enrolled in EFTPS.  2 participants have elected Lump Sum (total taxes round $2,000).  Normally taxes have been paid with the 945 form.  The accountant is questioning why we have to wait until January 2019 to submit the  check and 945 voucher.  Can the 945 be filed early??

Participant in a 401(k) Plan takes a participant loan and then goes on military leave.  The participant subsequently has a termination of employment from the employer who sponsors the 401(k) plan from which the participant loan was taken.  Per 414(u)(4), the plan may suspend the obligation to repay the loan during which the employee is performing service in the uniformed services.  Loan policy does not permit terminated participants to make ACH payments, allows participants to suspend payments during military leave, and upon termination loan is due payable unless part of eligible rollover distribution.

Question - What happens if this participant terminates employment while on military LOA with an outstanding loan?

A. Participant may still suspend the obligation to repay for the period of the military service.  Once military service ends, the participant would then fall under the normal rules for a terminated participant with an outstanding loan.  (FYI loan policy states upon termination loan is due payable unless part of an eligible rollover to another plan), OR

B. Participant is treated as a terminated employee and by the terms of the plan, the loan would be due payable unless part of an eligible rollover to another plan.

“(b) Military service. In accordance with section 414(u)(4), if a plan suspends the obligation to repay a loan made to an employee from the plan for any part of a period during which the employee is performing service in the uniformed services (as defined in 38 U.S.C. chapter 43), whether or not qualified military service, such suspension shall not be taken into account for purposes of section 72(p) or this section. Thus, if a plan suspends loan repayments for any part of a period during which the employee is performing military service described in the preceding sentence, such suspension shall not cause the loan to be deemed distributed even if the suspension exceeds one year and even if the term of the loan is extended. However, the loan will not satisfy the repayment term requirement of section 72(p)(2)(B) and the level amortization requirement of section 72(p)(2)(C) unless loan repayments resume upon the completion of such period of military service and the loan is repaid thereafter by amortization in substantially level installments over a period that ends not later than the latest permissible term of the loan.” 

For a stand alone vision plan... do they require COBRA notices to be sent?

Let's assume no other benefits are being offered.  Just vision insurance, that's it.