Regs say 1,000 limit is ok but what about 5,000 limit. plan has few if any HCE's.  does this fail the rights benefits features test or the reasonably  equivalent basis test?

An executive retires with a nonqualified plan benefit, but has an ongoing part-time consulting agreement that will continue for at least one year, under which services will be provided at approximately 25% to 35% of the time put in during the several years leading to retirement. He is considered an independent contractor during the consulting period.

My understanding is that this is in the gray area between more than 20% and less than 50% where there is no presumption as to whether the executive separated or not.

My question is about language in the regulations (1.409A-1(h)(2)(ii)), which states that, in the case of an independent contractor, "No amount will be paid to the service provider before a date at least 12 months after the day on which the contract expires under which the service provider performs services for the service recipient (or, in the case of more than one contract, all such contracts expire);"

Assuming that the employer has treated executive as not separating from service, would that "12 months after expiration until you make payment" rule also apply in the situation where an employee transitions to an independent contractor?

The health advocacy type benefits seem to be in a grey area to include a Schedule A or not. This benefit conducts the following: helps locate providers, addresses errors on bills/claims, answers questions on coverage, and asissts with denials and appeals. Would you include a Schedule A? (Plan Documents and SPD not available for referencing).

Many thanks for your assistance!

How do you allocate the RMD after a participant's death among multiple beneficiaries, when no beneficiary is an individual (no designated beneficiary)?  Is it proportionate?  Is there guidance?  This is an individual account plan.  

Example:

Participant P dies in 2018.  His RMD for 2018 was $200,000.  He took out $100,000 in 2018 before he died, so $100,000 remains due.  He has three beneficiaries who each receive $20,000 each and then a 4th beneficiary who will receive the rest.  Assume that, based on the total account balance, $20,000 represents 5% of the account and the amount that represents the 4th beneficiary's interest is 85% of the account.  Assume the remaining RMD of $100,000 is not paid by the end of the year. 

Would the three owe $2,500 in excise taxes (50% of 5% multiplied by $100,000) and the 4th owe $42,500? 

If a participant in a 401k Plan has both a pre-tax deferral  account and a ROTH - when they take a cash distribution - are  two 1099Rs required to report the pretax distribution & the Roth?

(5) Payments for burial or funeral expenses for the employee's deceased parent, spouse, children or dependents (as defined in section 152, and, for taxable years beginning on or after January 1, 2005, without regard to section 152(d)(1)(B)); or

Participant's father passed away.  Participant lives in California, and father lives in Delaware.  Participant is coordinating the "particulars" of the funeral.  Would his air fare/hotel expenses count as funeral expenses?

What about his sister who is also coming to the funeral, who might be helping out while she is there?

- The problem with political jokes is they get elected. ~Henry Cate, VII

- We hang the petty thieves and appoint the great ones to public office. ~Aesop

- If we got one-tenth of what was promised to us in these State of the Union speeches, there wouldn't be any inducement to go to heaven. ~Will Rogers

- Those who are too smart to engage in politics are punished by being governed by those who are dumber. ~Plato

- Politicians are the same all over. They promise to build a bridge even where there is no river. ~Nikita Khrushchev

- When I was a boy I was told that anybody could become President; I'm beginning to believe it. ~Clarence Darrow

- Why pay money to have your family tree traced; go into politics and your opponents will do it for you. ~Author Unknown

- Politicians are people who, when they see light at the end of the tunnel, go out and buy some more tunnel. ~John Quinton

- Politics is the gentle art of getting votes from the poor and campaign funds from the rich, by promising to protect each from the other. ~Oscar Ameringer

- - I offer my opponents a bargain: if they will stop telling lies about us, I will stop telling the truth about them. ~Adlai Stevenson, campaign speech, 1952

- A politician is a fellow who will lay down your life for his country. ~ Tex Guinan

- Any American who is prepared to run for president should automatically, by definition, be disqualified from ever doing so. ~Gore Vidal

- I have come to the conclusion that politics is too serious a matter to be left to the politicians. ~Charles de Gaulle

- Instead of giving a politician the keys to the city, it might be better to change the locks.
~Doug Larson

- Don't vote; it only encourages them. ~Author Unknown

- There ought to be one day -- just one -- when there is open season on senators. ~Will Rogers

When applying the maximum employer contribution amount to HCEs (60,000 for 2017 with catch-up), are the deferral amounts deducted from that maximum to equal the actual amounts available for employer contributions?

Do the new disability claims procedures apply to flexible spending accounts? 

Plan is Safe Harbor match with a discretionary match and after tax option.  If the plan does not put in a discretionary match and employees decide to put in a 4% after tax contribution, does this need to be tested under ACP or can it be avoided?

Looking to change the current software providers for my dc and db administration/testing work-

any suggestions ?- cost effective

I've got a client who paid out their first bonus in a long time... and totally forgot that bonuses are subject to the same deferral election as 'regular' compensation, so he didn't do any withholding.  So the employees have compensation paid in 2017 (reported on the 2017 W-2) that didn't have deferrals taken from it where there was a valid deferral election in place.

What's the best fix?  If this was in the same plan/tax year, I'd consider letting him 'make it up' on the next payroll, but I'm concerned that going over the year will be a problem.  I was reading this nice article, and I was thinking that the option on the 3rd page of the chart applies, but no penalty other than earnings seems like a pretty light way to get out of this...

Thanks.

I have a plan that has an owner and 2 new participants who entered on 7/1.  I'm trying to run a max scenario. Allocation is on particpation comp. Plan is top heavy.

Owner comp "only" $110,000. ;)

NHCE1 28,000 (full) 14,000  (participation)

NHCE2 24,000 & 12,000

What compensation do I use as my 25% ceiling?  $162,000 or 136,000?

Is there any prohibition on asking for an employee's or their dependent's gender when enrolling them in group benefit plans similar to the prohibitions on asking for gender on job applications? I understand that you cannot deny benefits because of gender but are you allowed to even request that information or have your TPA request that information to administer benefits or is it prohibited? Any assistance it helpful. Thanks.

I have received a DRO for a participant who is only partially vested in a 401(k) plan.  The DRO instructs that  we value the vested and unvested portion of account as of a specific date in the past.  And then if/as the Participant vests in the future, the AP will receive a proportionate share of that vesting.  If the Participant doesn't vest, the AP doesn't receive any further funds. 

I am accustomed to qualifying the DRO and immediately segregating the assets, but I cannot give the AP unvested assets and then allow the AP to attain them as the Participant vests.  And I cannot imagine trying to keep track and move half of the newly vested portion over each year as the Participant vests further.  The risk of a recordkeeping error seems high.  This feels like a problematic situation.  The participant will not pay out from the vested portion and attorney indicates no other options.  

Would appreciate feedback as the only other DRO's I"ve dealt with were fully vested.

Does anyone know if a signature stamp is acceptable on the 1096?

I can't believe in all my years, I've never had anyone ask, but this year someone is asking me.

Thanks in advance!

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