Can anyone point me to a good write-up of what codes to use for Roth distributions.  There are dozens of combinations and permutations (maybe I exaggerate).  Qualified/nonqualified, rollover/non-rollover, Code 1,2,7 etc.  For example I cannot find even in the instructions how to report a non-rollover qualified distribution.  The instructions just don't say what to do.

What I need is a chart that goes through the scenarios and I can pick the codes.

Maybe I'm overthinking it and someone can set me straight 

i have some employees basically leaving and forming a new entity. we want to start a new plan and do a trustee to trustee transfer of their entire accounts to the new plan (as opposed to distributions/rollovers). would this be considered a spin-off and be allowed? we do not have an asset  sale. 

The 2016 Form 5500 including the Independent Account Audit Report was filed timely.

The Independent Auditor who prepared the Audit Report contacted me and the client, and informed us that the DOL required him to make a change on the Audit Report to comply with the standard for Fair Value. And he did made DOL requested change. Other than that the auditor informed us that he didn't change any number or any opinion on the audit report.

Is there any issue amending the 2016 Form 5500 in 2018 in connection with the change in the audit report?

My office use Relius Government forms.

Many thanks,

AdKu

On a plan with a 1 year wait, with entry on the date of completion of the 1 year, Relius determines the otherwise excludable employees based upon the statutory entry date approach. How do I code Relius to use the plan's entry dates for determining otherwise excludable employees?

I have found a few prior threads on this board, but the outcome is still a bit unclear. The EOB references an IRS response from the 2012 ASPPA conference, but the book does not take a strong stance:

A 401k plan is written with a safe harbor match formula of 100% of the first 4%. The plan allows for discretionary match. The plan sponsor wants to fund an additional 2% discretionary match so employees who defer 6% receive a 100% match. However,  I see this as two separate formulas:

1. safe harbor match is 100% of the first 4% deferred

2. discretionary match is 0% of first 4% deferred, 100% of next 2% deferred

Therefore, I believe they are subject to the ACP test because of IRC §401(m)(11)(B)(ii) where the rate of match cannot increase as deferrals increase. One of the large record keepers disagrees. They say this approach complies because the formulas are in a sense "aggregated" and the match is uniform and does not increase as the rate of deferrals increase.

Does this match formula indeed satisfy ACP?

Thank you

Owner and his wife max out on pre tax deferrals. They fund the basic safe harbor match.  He exceeds 401(a)(17) and she makes $48K.  They are considering amending the plan to add after tax deferrals.  He read a Wall Street Journal article and the thought of exceeding the max up to $73k per couple is enticing.  They do not put in a profit sharing contribution.  Does the after tax contribution negate the benefit? 

Can a QDRO BE changed 

I am currently an associate for an RIA in our Retirement Plan Division. I joined the division last year, and  have spent the year "learning by listening". All my energy outisde work on focused on finishing up the CFA.  I recently became a charterholder, and I have the AIF designation as well.

I am extremely confident of my understanding of markets and investments, where I am lacking is understanding ERISA rules, how to design plans to best benefit our clients, how rules affect certain things etc.

I was wondering if anyone here could provide some insight on where I should focus my energies.  I will be working as a 3(38) Investment Manager to plans - would it best to focus my energy on obtaining the QKA?  or would the CPFA better serve me.  Or maybe there is something else I should be focusing on.

I have some insights from my boss - I want to seek out other opinions though - thanks!

 I have a question on eligibility to offer a 125 plan. In this situation the employer pays 100% of the health & dental insurance premiums for the FT employees, and offers coverage for spouses & dependents but it’s at the employee’s expense. Part time employees have to pay 25% - 50% of their health and dental insurance premiums depending on how many hours they work. The employer also offers a pre-tax Flexible Spending account for paying eligible medical, dental, eye glasses, and day care expenses.  Insurance premiums are not eligible for this. The employer is a non-profit religious organization.

I’ve had one “benefits person” state the employer can’t have a Section 125 plan because the employer pays 100% of the (FT) employee’s health and dental premiums.  But I’ve had another “benefits person” state the employer IS eligible to have a Section 125 plan because some employees pay for spouse/dependent insurance premiums and most employees participate in the Flex plan.  

Does anyone have any insight they could share on this topic?

 Thank you in advance.

Is there a deposit deadline for employer contributions to a governmental 401(a) plan?  governmental 403(b) plan?

Thank you!

So in 2017 (more than a little more than 60 days ago, I checked) a participant elected to roll over a fairly substantial pre-tax 401(k) directly to a ROTH-IRA.

Despite making this election and agreeing they had read the Special Tax Notice that indicates if you elect to rollover to a ROTH IRA this will be tax able (but not subject to the 10% penalty) participant now claims they had no idea it would be taxable and wanted it to go to pre-tax IRA.

Is there any "re-charaterization" option available to the participant to convert the ROTH-IRA back to a traditional IRA for 2017 that I am unaware of?

I'm also 99.9% sure the transaction can't be unwound by returning the funds to the Plan and re-issuing as rollover to traditional IRA but on the 1 in a 1000 chance I'm missing something I thought I'd ask here.

Nothing appears wrong with any paperwork and the funds did get to her ROTH-IRA and were cashed.

We now have reduced QNECs required when a Participant is not given the opportunity to defer.

Does this apply when an election form is misplaced?

Back in 2008 a pension plan was terminated and some of the participants elected to rollover their balance to the 401(k) Plan.    Now in 2018, a participant wants to rollover their prior 401(k) plan to this plan and it is realized that the plan does not allow for rollovers.   

Is it as simple as amending  the plan now to allow for rollovers, or how do we fix those rollovers from 2008?  

A Tribal Governmental K-12 Public School wishes to establish a 401(k) plan.  I don't believe they can.

PPA 2006 expanded the definition of governmental plans to include a plan established or maintained by an Indian Tribal government for its employee’s performing “governmental functions”, but not to include those employees performing commercial activities (e.g., workers in a hotel, casino, or convenience store)  Essential governmental functions would be considered those functions customarily performed by state and local governments if: (1) There are numerous State and local governments with general taxing powers that have been conducting the activity and financing it with tax-exempt governmental bonds, (2) State and local governments with general taxing powers have been conducting the activity and financing it with tax-exempt governmental bonds for many years, and (3) the activity is not a commercial or industrial activity. 

Tribal governments can establish a money purchase plan or profit sharing plan for its “commercial” employees, not a 401(k), enabling it to comply with the applicable qualification rules under Code Section 401(a) for plans applicable to nongovernmental plans. 

An Indian Tribal Government is considered a “State” for 403(b) purposes, per Code Section 7871(a)(6)B), that they can offer a 403(b) program but only to employees of their educational institutions.

Is my assessment correct?

A 401(k) plan limits partiicpants to 1 plan loan at a time.  It was discovered last year that a participant took out 2 plan loans.  Is this an operational failure?  How is this corrected?  VCP?

Let's say a plan has 2 participants. Participant A is an HCE because of ownership - he owns 100% of the company and his salary is $50,000. Participant B is an NHCE and earns $100,000.

From what I understand, the company can make the same dollar Profit Sharing amount contribution to everybody. Let's say that contribution is $5,000 each. So that's 10% to HCE and 5% to NHCE. The software says that the General Test is failed! What would you do in this case. Is it fine to not include the General Test at all in the reports as the same dollar amount to everybody is a Safe Harbor definition?

Thanks.

Plan Sponsor with a safe harbor 401(k) plan (basic safe harbor match), just learned that for 2017 their payroll company did not apply deferral elections to bonuses paid during the year.  Plan Doc does not exclude bonuses for any plan purposes.

Match is allocated at year end.

In reading through the IRS 401k fix it guide, Example 2 under Mistake 3 (didn't use the Plan's definition of comp), would require a QNEC of 50% of the deferrals that would have been made from the bonuses had the elections been applied, plus earnings, plus applicable match.

However the example goes further to say that with respect to the missed deferrals, "other correction methods may be acceptable to fix that part of this mistake", and refers to Mistake #6 which describes corrections for situations in which "Eligible employees weren't given the opportunity to make an elective deferral election (exclusion of eligible employees)."

The Plan Sponsor just discovered the error (when putting together the year end census data).  They are going to ensure that elections are applied to 2018 bonuses.

I'm thinking based on the reference to Mistake #6, that the QNEC can be limited to 25% of the missed deferral, assuming the QNEC will be made in 2018.

Am I off base on that?

Thanks very much.

Has anyone thought about what the deadline is for setting up a new multiemployer defined benefit plan?

Example:  Plan is intended to be effective July 1, 2017, and to be a calendar year plan.  The employers all have fiscal years ending June 30.  The plan is not finalized until January 20, 2018.

The IRS 401(k) resource guide says, "The plan may not be made effective earlier than the first day of the employer’s tax year in which the plan was adopted. In other words, an employer may adopt the plan document on the last day of its tax year, with an effective date retroactive to the first day of that tax year, but not any earlier."  https://www.irs.gov/retirement-plans/plan-sponsor/401k-resource-guide-plan-sponsors-starting-up-your-plan If this applies to multiemployer defined benefit plans, it would mean that the plan could be retroactive to July 1, 2017, even if the plan itself has a calendar year.

It would seem odd to make the deadline for adoption of a multiemployer plan the employer's fiscal year.  What if the employers had different fiscal years?  A more reasonable approach would seem to be to have the deadline relate to the plan year--meaning that the plan could be adopted in January of 2018 retroactive to July 1, 2017 only if the plan adopted a plan year that ended between January 31 and June 30.  However, I'm just not finding any guidance at all on this issue.  Is anyone aware of any?

I have a 403b plan whose assets are invested with an Insurance Company. Have a participant who has been in the plan finally decide to start participating. He contributed $900 and the company matched $900. The issue that I just found out was that the money was not deposited with the Insurance Property.  Instead the participant opened up a Simple IRA, which the company deposited the contributions into.  This opens up a host of issues but wanted to get some ideas on how to best move forward.

I have a question that has bedeviled me. Here's the situation:

Both spouses work full-time for the same ALE.  Husband enrolls in family coverage and covers his spouse and children,

The instructions for Form 1095-C provide that in such as case "the enrollment information should be reflected only on Form 1095-C for the employee who enrolled in the coverage. (However, it would report the other employee family members as covered individuals)."

This makes total sense.  My question is whether a Form 1095-C needs to be completed and delivered separately for the spouse.  (The Instructions also state that one Form 1095-C needs to be completed for each full-time employee.)  If one does need to be completed, what codes should be used for the spouse?

There is probably no requirement that a form be completed for the spouse but I have not found any guidance specifically saying so, and, as I mentioned, it is bedeviling me.

Any assistance would be appreciated.