I am unclear on whether a pre-approved plan needs to be updated for qualification requirements prior to the plan sponsor terminating the plan.

A favorable Determination Letter was received for the pre-approved plan for the 2nd remedial cycle (addressing the 2010 Cumulative List of Changes).  Does it need to be updated for the 2017 Cumulative List prior to termination?

Client took a loan, which subsequently was deemed.  Five years later, he paid it back so he could take another loan.  The client is 59 ½ and tried to take an in-service distribution of the remaining account value.  He was denied the full distribution amount due to the deemed amount that was paid back not being eligible for in-service withdrawal.  Has anyone heard of this before?

Client has a plan with age 21 and 6 months of continuous service. They have a discretionary match which has been typically $2,000 per participant.

They will be hiring some employees on a part-time basis( 24 hours a week) and want to know if they can "pro-rate'' that $2,000 match for these part-time employees. That is, they feel someone who only works 24 hours a week should not receive the same match as those who work 40 hours a week.

I'm thinking that maybe they should just go to a certain percentage of pay instead. Any other suggestions?

We are offering Voluntary Life benefits in increments of 10,000.00 to employees, and their spouses. These benefits are 100% paid for by the employee with no tax benefit. If an employee wants to add their domestic partner, would the employee paid voluntary life premium have any tax implications?

-John

Does anyone have a control group worksheet/spreadsheet they would be willing to share that looks at more than 5 entities ownership at one time?  Thank you in advance.

A participant requested a hardship distribution to buy out his soon to be ex-spouse from their half of the principal residence.  There is no DRO involved here at this point.  The plan sponsor indicated they didn't see any problem with this request as a "purchase of principal residence" purpose for hardship.  The Plan Sponsor believes this is a purchase of his principal residence from the other owner.  I can't find anything anywhere to substantiate accepting or rejecting this request to use the funds to purchase a principal residence.

I realize a DRO request is the way to go here instead for a lot of reasons, but my question is can a participant request and obtain a "hardship" withdrawal to buy out a second owner of a principal residence?  He will be 100% owner at the end of the transaction.  What do you think?

I have seen more than a few Cash Balance Plans that require either 1,000 hours of service or employment on last day of the plan year to receive an accrual for that year.  I can't think of any plans I have seen that require both 1,000 hours and last day of the PY.  Is that permissible in a CB plan?  Can a CB plan just require last day of PY with no hours requirement?  I am not aware of any rule that says a plan can't do this, but for some reason doubt is creeping in.  

I would like to find out how others handle this issue.  Let's say that for whatever reason too much money has been deposited into the Deferral source at the end of the Plan year.  Perhaps it was a duplicate payroll submission or an error in the amount submitted.  Let's say that it was definitely not an intentional prefunding.  

Do you simply allow those amounts to stay in the participant's account and be used to reduce the next required 401k deposits?  (I didn't think that this was permitted).    Do you require the employer to allocate as a discretionary contribution? Do you move the funds to a suspense account to be used to reduce a future Employer contribution, but not an employee deferral?  Do you move to suspense and first use to offset any current year receivable of ER contributions?

Thank you

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?