There seems to be a consensus, based on various Q&As on this forum, that an employer cannot maintain a 5305-SEP and a 401k in the same year.  I am not sure I agree with that.  Can someone please provide a source for this?  I see on the IRS website that an employer may not use a Form 5305--SEP if it maintains any other qualified plan -"maintained" means even if no contributions are made - but if an employer terminated the SEP as of 2/28/18 and then started up a 401(k) plan on 3/1/18, wouldn't that be acceptable?  In that instance, the employer is not "maintaining" both plans.  Yes, it would have had both plans in 2018, but they weren't maintained at the same time.  I can't find anything from the IRS that would prohibit this fact pattern.  Any thoughts?  Thanks!

We have a 401(k) plan sponsored by a Limited Partnership (Hotel) where one of the 5%+ owners is a working manager taking draws but no W-2 wages.  Would she be included in ADP testing?  Her daughter also works for the hotel but does receive W-2 wages (she owns 2.5%).  Definition of compensation per the plan doc is W-2 (no exclusions).

Two Buy Backs in one year..... yikes.  Never experience one, yet two in 3 months....

An employee deferred Roth to a 401k prior to us.  He also had pre tax monies.  Said employee terminated and rolled Roth dollars to a Roth IRA.  Rolled pretax dollars to IRA.  $15k in forfeitures at time of distributions.  Employee wants to restore his dollars to get the forfeitures back.

What are your thoughts on Roth buy-back?  Specifically, the Roth start year.

I see you can't Roll a Roth IRA to 401k.  But we aren't talking about a Rolling back....

The Roth start year starts over when Roth from 401k goes to Roth IRA.....  probably why you can't roll Roth IRA to 401k.....

And then there is the IRA provider (E-trade).

If the Roth can be brought back into the plan.  How would you handle the Roth start year situation?

Company A and Company B form a controlled group.  Company A sponsors a safe harbor match 401(k) Plan, which Company B has adopted as a participating employer.  There is one employee, who receives compensation from both entities, but all of the deferrals have been made through Company A.  For purposes of calculating the safe harbor match, I believe I should aggregate the compensation from both companies.  For deduction purposes, should the safe harbor match contribution for this person be divided prorata based on compensation, or should the entire deduction be taken by Company A, since the deferrals were made by the employee from his Company A compensation. 

I have a Top Heavy Safe Harbor/Cross Tested Plan.

Compensation for plan purposes is participation compensation.  Obviously, the Top Heavy Minimum must use the entire year's compensation.

Must the Gateway therefore be based on the entire year's compensation?

I have a one man Corp since 2003 and opened a 401k solo plan with fidelity. I am finding value of this portfolio crossed threshold of  250k. So I plan filing 5500EZ by March 15 i.e when I file company taxes.

How far back can IRS audit this? How will they know who much actually I deposited each year etc considering stock market changes and I lost money few years.  It should have been 250K in 13  years considering my deposit have been 20k each year. Is it normal for solo accounts?

We have a client who owns two companies and both have employees including himself.  One is a corporation; the other is a LLC.  He has W-2 wages of about $190,000 from the corporation and over a million from the LLC.   Both companies are adopting employers to the same retirement plan and all employees are covered for both entities.

Question:  In calculating the maximum benefit he can have for 2017, are we allowed to use both his W-2 wages plus enough K-1 income to get him up to the maximum we can take into account for the year of $270,000?  Our gut reaction is "yes" but one of us has some doubts.

We are grateful for any help!

Has anyone seen any successful document amendments for Plans to begin using forfeitures to fund SH contributions? 

I was hoping that FIS Relius would have released their good-faith amendments by now, but as I understand it they haven't.

https://www.relius.net/News/TechnicalUpdateDetails.aspx?T=P&1=1&ID=1103 

Thanks in advance! 

A company incorrectly made contributions to a defined contribution plan on behalf of an employee for over 20 years.  The employee received  monthly statement and was told a year prior to retirement she had excess of $120K in benefits in the account.  Error was discovered and funds forfeited, but the company settled with her on the side to pay her the amount of the benefit.  

Question:  what kind of W2 compensation is this reportable as? Is this wages that go in box 1? It was agreed that 2/3 of the settlement amount would be W2 and 1/3 reported on a 1099-MISC.

Thanks in advance. 

We currently administer a profit sharing plan, the employer may possibly be selling the business.  The purchaser will be buying the assets of the company and changing the name of the company, as well.

I know you can't have a plan w/o a sponsor, but is there a specific time limit (excluding the IRS12 month rule) within which to distribute, rollover, etc. after the company is no longer in business.

More employers are finally trying to comply with the ERISA plan document and SPD requirements for their welfare benefit plans.

I've encountered several law firms that are preparing a single document that they represent is BOTH the ERISA welfare plan document and Summary Plan Description (maybe the law firms are using the same 3rd party welfare document vendor?).

Seems to me this approach is fundamentally flawed, that ERISA requires they be 2 separate documents with different purposes. In the qualified plan arena I can't imagine trying to use the plan document as the SPD or vice versa.

Interested in what others think of this approach.

Hello, 

My employer retirement plan is based on two employees. The owner and an employee. However, testing resulted in the owner being top heavy at 64%. However, they are a Safe Harbor at 4% as well as the prior year. 

My question, is there any additional requirement on part of the owner on contributions? 

Thanks 

Can an employer retroactively increase their employer contribution formula? If so, what is the allowable time period to do so? Could the retroactive increase be applied as many as 24 months ago?

I have 3 employers and 3 plans - all are part of a controlled group. One plan is a safe harbor plan since 2011.  Each plan has always conducted coverage and ADP/ACP testing on its own -  they never considered the controlled group aspect until now.  Is there an issue on a controlled group basis if each plan has always passed on an individual basis? 

Thank you.

We have a Safe Harbor plan that has two participating employers due to controlled group rules.  The employer that is the Plan Sponsor will soon have 100% of the company stock bought by a separate individual.  The new owner will continue as a participating employer in the plan.  I understand that now that they are no longer a controlled group, they will need to be tested separately, which should be no issue since it is a Safe Harbor Plan. 

My question - what if the new employer decides he no longer wants to participate in the current Plan?  Can he just "spinoff" the current plan as long as he keeps all the provisions of the original plan intact?  Or, if at some point in the future, he decides he doesn't want to maintain the Safe Harbor plan, can he terminate the participation of his company in the plan and start a new plan?  I assume this would have to be done at the beginning of a plan year, since it was done after the sale of the stock?  Is there anything I'm missing?  

Participant is terminating next week and has an unpaid loan from the plan.   How long does she have to pay it off now before it is considered taxable to her?  I though it was 60 days after date of term, but did the new tax law change that?  Thanks!

Background:
1998 QDRO issued / approved,  401K plan administrator (or trustee?) created a separate account for my funds. I've not touched it.  2018 balance about 4 times what it was and I need cash. Best as I've been able to determine (lousy customer service) the plan does still recognize me as an AP and my exemption from 10% penalty still applies. Plan won't allow partial withdrawal, all or nothing only & of course will withhold 20% 
Questions:
1. Does the exemption from 10% penalty apply to all, including the earnings?  
2. When I file my tax return, how do I evidence to the IRS it is not subject to the penalty? (only income tax)
3. If instead I do a direct rollover into a new IRA (losing the QDRO status) and take 72(t) SEPP for a min. of 5 years, when I turn 59.5 in just 3 years, can I make additional penalty free withdrawals over & above the 72(t) distributions? 
4. Other thoughts - am I missing anything, is there a chance the QDRO/penalty exemption "expired",...?
 

Calendar year plan eligiblility 1 YOS, dual entry.

Hire new non-owner today who will earn $1M in 2018 comp. (not HCE for 2018 but will be HCE for 2019).

Can we safely amend plan to allow early entry for deferrals and employer contributions for 2018 without any discrimination issues since NHCE for 2018?

Would we need to again amend to exclude this employee during the first half of 2019 (period prior to “normal” 7/1/2019 entry) to avoid discrimination issues?

Is compensation that complies with Sec 409A eligible for 401k deferrals?

What happens when a collective bargaining agreement differs than the terms of the plan document? Possibly the CBA was amended to provide a different match and employer contribution and the plan document was not amended accordingly, which I think can happen often. Some pre-approved documents have a check box to defer to the CBA. However, if the plan does not have this provision, which takes precedence? The plan or the CBA?