We recently discovered that a client who had a SIMPLE IRA previously sent the January 2017 contribution deposit in error to the SIMPLE plan instead of to the new 401(k) plan that was set up for 2017. However, the W-2's are correct and the funds were withheld as 401(k) deductions. Any ideas how to correct and remove contribution from SIMPLE IRA and transfer to the 401(k)? Don't think 1099-R is appropriate since tax reporting is correct on payroll side.

In 2017 a participant terminated and received a single sum distribution of company stock derived from employer contributions.  In 2018 the employer made a profit sharing contribution, a portion of which was allocated to the participant who had terminated in 2017.  As a result, the participant received a second distribution of company stock in 2018.  

Can either or both distributions be considered a lump sum that would exclude the NUA from the participant's income? 

If not, can we correct under EPCRS, have the participant repay the first distribution, and the make a distribution in 2018 that is considered a lump sum for this purpose?  For this second question, assume the plan document did not permit the first distribution in 2017.  

EBSA FAB 2009-02 seems to allow the exclusion of individual annuity contracts for anyone terminated before January 1, 2009. 

A 403(b) plan sponsor (educational institution) has had a required annual audit because of the number of participants, partly because they have been including individual annuity contracts for former employees who terminated in 2008 or earlier and who have not been entitled to receive any employer contributions since 2008.  In the Q&A for Bulletin 2010-01 it seems the initial inclusion of those pre-2009 terminees was optional at the time.  Can the plan sponsor reverse its decision and choose not to include those contracts in plan assets now and also not include those pre-2009 terminees in the participant count?  It might mean they would no longer require an audit because they would fall below the threshold.

Thanks.

We have a client who has operated their plan  as a safe harbor using/with a QACA match since 2011.  At some point- when the     document was restated in 2016, the attorney doing the restatement checked  Sh 3% - maybe election as the option.  The SH notice from 2011-2016 stated QACA but the 2017 one had 3%...  As I said, the client has always calculated and funded the basic QACA match....How in the world can this be fixed?  Scriviner's error or major deal with IRS filings?

I have a controlled group of companies - 2 separate plans.  The plans must be combined for coverage testing.  Unfortunately, they can't pass on their own due to the different sizes of the companies.  I know the plans cannot be combined if one is not a safe harbor plan and the other is.  Can the plans be combined for testing purposes if one of the plans provides for a safe harbor match and the other provides for a safe harbor non-elective contribution?  There are HCE's in each plan.  Thank you!

In 2018 we will be terminating a 403(b) plan which the plan sponsor has not yet restated for PPA.  The restatement deadline is 2020 so we are within the restatement period but nowhere near the deadline.  Do we have to restate this plan to terminate it?  (The assets will be paid out in 2018; that is not an issue in this case)

Thanks!

Is this the correct way to handle this situation?  Employee (officer of corporation) wants to make max 401(k) contribution, effective 12/31/2017 now & wants a corrected W2 for 2017 ASAP.  Also wants CPA to not yet file the tax return & update the return so that the 401k contribution amounts will be correct.

Is this a normal request for a person to on April 15 ask for a corrected W2 and for the tax return to be changed?  Thanks for any thoughts.

Should an RMD be paid to an Alternate Payee before distributing AP's segregated account from 401k plan?

Alternate Payee will turn 70 1/2 in 2018 so an RMD would be necessary and would be based on AP's balance as of 12/31/2017.  The court order was signed in Sept 2017 but it not provided to the Plan Administrator until mid January 2018. The participant's account was segregated in Feb. 2018.

The AP did not have a segregated account balance in the 401k as of 12/31/2017, so is a 2018 RMD necessary or not?  If a 2018 RMD is necessary, should the participant's account as of 12/31/2017 be prorated between participant and AP to calculate the 2018 RMD for the AP? or simply use the value of the AP's account when segregated in Feb. 2018?

The participant will also turn 70 1/2 in 2018, however is still employed and a non-owner.

Is it permitted to exclude any elective deferrals made from year end bonus pay from the SH match?  if so, how are those amounts tested for ADP/ACP?  Does that throw out the entire ACP safe harbor and test is run as it normally would be?  What then about those elective deferrals that have no SH match?  Are they tested separately?

I have a client who is wanting to purchase a second home. He wants to make the purchase using his pension and holding the real estate as an asset of the pension. Is that allowed? Or is there anything like this allowed?

He is the plan sponsor of his company's retirement plan. He has a traditional with profit sharing, plus he has a cash balance plan as well.

Thank you in advance!

A participant terminated during 2017 with 700 hours, he is 0% vested.  

  He is eligible for a profit sharing contribution for 2017.   Forfeitures are reallocated the same as the contribution.    

Document says forfeitures occur in the year they are paid their vested balance.    

Since this participant is entitled to a contribution and forfeiture reallocation for 2017, does he also forfeit his balance during 2017?    

I'm thinking his balance should be forfeited in 2018.    

One of the newest marketing techniques I am running into is where an "independent expert" come in and says to the firm's controller that by signing Form 5500 for the firm you are exposing yourself to a personal liability, including making yourself a fiduciary.  I note that the Plan document does include language that fully indemnifies any individual acting as an agent for it, the Plan Sponsor.  Anyone have any comments on this practice?

My sister received a hardship distribution to take care of her grandkids m, she is 60 yo. She has no funds left to repay, the plan administrator wants the overpayment repaid. She has no assets, car and rents, she lives in pa.she cant even handle a repayment plan. Please advise? should she just walk away? please advise.

thanks,

Dave222

Let's use the example of someone electing a 5% deferral rate on Wednesday April 11th.  This pay period is from Monday April 2nd through Friday April 13th.  Is it legal to do the 5% deferral on the pay check for this period that will be paid next week?

I lost my job about a year ago.  I could not take a hardship withdrawal because I was no longer with the company

I was unable to pay large recent medical bills or rent due to the job loss so I cashed out my 401k (around $20k) to take care of those things

The tax paperwork from my plan does not indicate a hardship withdrawal so I'm getting killed on taxes.    Is there a way to show on my taxes that it was a hardship or can my plan provide corrected docs?

Plan has 3% SH.  401k eligibility is 3 months, PS & SH is one year.

Employee starts to defer early by mistake but terminates before year end, so no TH.  Did not satisfy the 1 yr requirement for ER contributions.

We amend the plan to let the employee in.  What are we letting her into?  Just the 401k is ok?

Fear is we need to let into SH also.  I don't think so but wondering if I am wrong.

Thank you

If HCEs are not eligible for the SH contribution are they required to receive the notice.  Everything I can find just says "to those eligible to participate".  Is that "eligible to participate in the SH benefit"?

I am thinking of adding it to my default one person plan design so that when the sole prop calls me today and says I have an employee (who I never heard about before) entering 7/1, it doesn't hose up the entire plan for the year.  (Of course it doesn't help the guy who says, "employee who entered 4/1")

No consequences to Plan operation/Notice requirement until a Maybe Notice is required prior to entry of the new Employee.  Kind of a chicken soup thing.

Thanks

A participant in a 401k who is 76 years old died in 2018. The spouse was the primary beneficiary. She wants to rollover the funds into her own 401k plan and treat it as her own. As she is the spouse, I believe she can do that. However, the question is: does an RMD have to be done from the original 401k before the rollover?

Thank you.

I have a controlled group. 

Two of the companies had contributions that were withheld from a participants pay, but didn't make it on the payroll they sent us.  It's very small amounts.  We are giving interest and filing a 5330.   Since it's two different companies, I assume that two 5330's are needed.  Is that correct? 

For one point about the design of a retirement plan, a recent BenefitsLink discussion shows differing views about which set of provisions is likelier to meet a sponsor’s interest, and perhaps about how the point might be explained in a plan-design discussion (or instead presumed).

https://benefitslink.com/boards/index.php?/topic/62281-that-a-retirement-plan-required-no-spouses-consent-for-a-distribution-before-the-participants-death-meant-a-surviving-spouse-gets-no-portion-of-a-27-million-benefit/&page=2

That started me thinking about a practical point:

The time available for a plan-design discussion might be limited—whether by a client’s availability or attention span, a client’s choice to limit a practitioner’s time billed, or a practitioner’s choice to limit time to sustain profitability for a fixed fee or an assumed cost.

If time is limited so it’s not feasible to discuss all plan-design choices, how does a practitioner leading the discussion decide which topics should get little or no attention (and instead fall into some presumed norm)?